Left-libertarianism

Questions for Left Libertarians

The idea of workplace democracy is popular among left libertarians, but I think it’s hard to square a commitment to workplace democracy with other commitments that libertarians are inclined to have. So here are a few sincere questions for left libertarians who support worker-owned firms:

Does workplace democracy really eliminate bosses?

The claim that democratically-run, worker-controlled firms would result in greater freedom for workers seems like a strange one for libertarians to make. After all, most libertarians would deny that granting all citizens a vote in a political democracy means that you are your own boss in a meaningful sense. In both economic and political democracies, your single vote is unlikely to be decisive, meaning that you are exercising little to no real control over the direction of the democracy. (A point also made here.) In an economic democracy perhaps you’ve traded one boss for a thousand bosses, but one thing doesn’t change: you aren’t the boss. (Maybe economic democracies will tend to be a lot smaller than political democracies. But they can’t get too small if they want to take advantage of economies of scale.)

What about rational ignorance?

Here again it seems like textbook public choice worries about political democracy apply to economic democracy. If the vote I cast in an economic democracy is probably going to be inconsequential, then I have little incentive to make it a good one. The rationality of voter ignorance is a standard explanation for the poor quality of political governance, so why would things be different with economic governance?

Are capitalist acts between consenting adults permitted?

Nozick famously wrote that socialism “would have to forbid capitalist acts between consenting adults.” A similar problem arises for economic democracy. Suppose a risk-averse worker wants to sell her shares to a second worker in exchange for a steady income. Is this transaction permitted? If so, then we have reason to think that hierarchies will arise spontaneously from an initial condition of worker equality. If the transaction is not permitted, then it’s unclear in what sense this position is libertarian, given that it forbids capitalist acts between consenting adults.

To be clear: I don’t intend these as rhetorical questions. I’m genuinely curious what left libertarians have to say about them.

Published on:
Author: Christopher Freiman
  • Jerome Bigge

    We do have an example of “workplace democracy” in Mondragon in Spain. Germany also has a policy where there will be equal numbers of workers to match stockholders on the board of directors in some of its industries. However those workers who “slack off” likely do find that their fellow workers are less “tolerant” of such things than regular “bosses” might be. No more “sticking it to the man” when it is your fellow workers who likely are aware that you are in a way costing them income or having to do the work that you should have been doing, but didn’t. And “brown nosing the boss” won’t do you any good when effectively “your boss” is the workers around you, not some hired manager.

    • Mick Price

      Ok that answered none of the questions asked. Please post something that’s actually relevant to the subject.

      • Jerome Bigge

        Relative to people having more “say” than they do presently?

        • Mick Price

          If anything you have LESS say in a cooperative according to your analysis. Is that what you were saying?

          • Jerome Bigge

            In a group of workers, you will at least get some attention from the rest. With many “bosses”, its more “my way or the highway”.

  • Adam Minsky

    Thank you for raising these important questions. I have mixed opinions about workplace democracy. I’m all for strong unions, contracts, due process, etc. (I realize these aren’t things near and dear to the hearts of all libertarians). But some aspects of the traditional Marxist/socialist definition of workplace democracy make me uncomfortable.
    For much of the left ,including Marx, workplace democracy was defined by two characteristics. The first was open election of workplace leaders as opposed to secret ballot. The dangers of peer pressure and group bullying are too obvious to require much comment.
    The second characteristic was immediately recall of elected workplace leaders. This would make it almost impossible fro leaders to make the kind of hard decisions that are sometimes necessary. It sounds like a recipe for chaos.
    As Penn Gillette once put it: Democracy without minority rights just means picking on the weird kid. And as someone who was always the weird kid, I’m skeptical of certain aspects of workplace democracy.

    • TheBrett

      I agree with both points, and tend to think that if you’re going to have workplace democracy (and we should), you need structured rules around when elections are held, when the elected can be recalled, and so forth. Most cooperatives I’ve read about that were larger than a handful of people had by-laws to govern the process.

      • Adam Minsky

        Thanks for your response. I should acquaint myself with just how cooperatives are governed.
        I certainly agree that you need structured rules to have effective workplace democracy. I am equally interested in how informal structures of majoritarian oppression are avoided. In plain English, how do cooperatives handle the misfit and the oddball? I’m reminded of the bumper sticker slogan: Never underestimate the stupidity and cruelty that people are capable of in large groups.
        That large group can be just as easily situated in a workplace as anywhere else.

        • TheBrett

          Not sure, honestly. I know Mondragon has a “no-layoff” policy, but presumably they have some type of dismissal for cause – I can’t find any description of it, though.

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  • ncovington89

    “In an economic democracy perhaps you’ve traded one boss for a thousand bosses, but one thing doesn’t change: you aren’t the boss.”

    That reminds me of the scene from “The Patriot” where Mel Gibson’s character asks (about Democracy) “Why should I trade one tyrant a thousand miles away for a thousand tyrants one mile away?” But empirically we know that democracy works better than a monarchy. Plenty of research shows that democracies are far less inclined to war, have famines, etc. than other forms of government do. It’s the least terrible system we know.

    “The rationality of voter ignorance is a standard explanation for the poor quality of political governance, so why would things be different with economic governance?”

    The system we presently tends to concentrate power (and wealth, which begets even more power) in a few hands, from which comes terrible problems of all kinds. Is that supposed to be preferable to the mistakes that will be made from time to time by a democratic majority?

    “Are capitalist acts between consenting adults permitted?”

    It depends. I wouldn’t wipe out all capitalist industries at once, I would give grants and/or subsidized loans to co-ops in order to gradually grow that sector of the economy, I would not wipe out all businesses at once. Capitalist businesses would still exist and would still get started anew but not eliminated. On your example of this:

    “Suppose a risk-averse worker wants to sell her shares to a second worker in exchange for a steady income. Is this transaction permitted?”
    I don’t think people would want to do this because there are ways to “spread your earnings out” within a co-op system by having deferred compensation. If the business started losing enormous amounts of money over a long period of time you STILL would not have the advantage of a “steady paycheck” because by that point, the business wouldn’t be profiting anyone, and would go under, as all business models must. Maybe I should give further thought to this question, but I’d say there would be no point in outlawing share-selling because I don’t think anyone would do such a thing.

    • TheBrett

      I wouldn’t wipe out all capitalist industries at once, I would give grants and/or subsidized loans to co-ops in order to gradually grow that sector of the economy, I would not wipe out all businesses at once.

      You’d probably need to change the rules on what firms that get c-corporation charters can do, to include more workplace democracy in their governance. Firms could still dodge that, but they’d have to do so with unlimited liability for the owners.

      • Mick Price

        But coops would be able to poison the rivers and say “Sorry, limited liability”? Yeah that’s fair.

    • Agammamon

      “I would give grants and/or subsidized loans to co-ops in order to gradually grow that sector of the economy,”

      I think you’re missing a huge problem here. Co-ops are *already* possible. If they need to be subsidized its because there aren’t enough people seeing their value to join/create/invest in them.

      If you subsidize them then you are subsidizing a form of business that’s been pretty well shown to be inferior to the standard form of capitalism – if it was better don’t you think more people would use that form of organization? People aren’t stupid (mostly, and in aggregate). So you’ll *always* have to subsidize these businesses because the instant you turn off the ‘free money’ spigot people will withdraw and seek more profitable places to park their money.

      If you change the rules by legislative fiat . . . what do we gain? If people won’t do this voluntarily, what is gained by coercing them to do so?

      • Konrad_Lorenz

        I think the idea is that the co-op would be subsidized because the value it creates — in the sense of what makes it desirable — is not value to the investor. It’s either to the worker or the customer or maybe to the environment/community/externalities.

        Investors only care about the value _to them_: they won’t invest more in a business just because that business produces better positive externalities. So you can’t purely fund the thing by investment, not because the business wouldn’t produce value, rather because the investors would demand to capture all the value themselves, defeating the whole point.

        Basically, bottom line, if something is desirable then it makes sense to subsidize it because then you will get more of it. The fact that you get less of it when you don’t subsidize it doesn’t refute that it’s desirable — that’s true about everything.

        • Mick Price

          But if it does create value to the worker or customer then workers and customers should be flocking to it, ready to take less/pay more than they do to standard corporations.

          I don’t see how you can argue that cooperatives necessarily create better externalities. There’s no reason why a workplace democracy can’t decide it’s worth pollution if it cuts cost. You might argue that having happier workers creates externalities, but so does having richer workers. If people are really happier working for a coop then the only way for-profits will get workers is if they pay them more.

          “Basically, bottom line, if something is desirable then it makes sense to subsidize it because then you will get more of it. ”
          More desirable to who? And if it’s so desirable to them why aren’t they paying for it?

          • Konrad_Lorenz

            I’m not arguing that it does; I’m just explaining how there is a rationale for subsidies under the assumption that it does.

            Whether or not you agree that co-ops are desirable, you should understand that your statement relies entirely on assuming they’re not (rather than being more general).

          • Mick Price

            Ok the original poster said nothing about positive externalities and nobody has even tried to prove that coops are likely to have more of them. Your argument that investors won’t create a for-profit firm for the externalities is invalid because neither will workers. Think about it, whoever creates the firm is an investor because you need to invest for the firm to be created. The difference between worker coops and traditional corporations is that the investors and the workers are the same people. But the problem of investors basing their investment the value they recieve rather than the value created in total still exists.

            Of course the cooperative might create value for the workers the would otherwise not have, but if it does that means that they can get workers for less. You don’t need to subsidize the investment because the workers are the investors and so invest if the value delivered to the investor and the worker together justify the investment. That’s because they get both types of benefits. So if they still need subsidy it’s not justified unless you can find a specific benefit.

          • Konrad_Lorenz

            “Of course the cooperative might create value for the workers the would
            otherwise not have, but if it does that means that they can get workers
            for less”

            This is just nonsense. You’ve taken econ101 and extrapolated it into utter gibberish because you are not aware of the simplifications you are making.

            Just because the workers aren’t willing to work for less, doesn’t mean they aren’t receiving any value. They simply might not have enough money for their preferences to affect the market price.

            If you had a billion dollars, you might be able to throw a few million towards getting yourself a new yacht.

            But you don’t have a billion dollars, therefore you won’t buy a new yacht. Does that mean that if somebody gave you a new yacht for free, it would not have any value to you? Think about it.

        • Agammamon

          If it creates more value than it consumes it *doesn’t need* to be subsidized. If it doesn’t, subsidization is just throwing good money after bad.

          Doesn’t matter – investor or customer. You either make something people want or you don’t. If you do they’ll pay you and you’ll get investment. If you don’t they won’t.

          You can say, for example, that solar cells are ‘desirable’ – but if you’re not willing to put your actual cash on the line . . . how desirable are they really? If investors are not willing to invest, and customers are not willing to buy, they’re saying that that product *is not desirable at that price point*.

          • Konrad_Lorenz

            “If it creates more value than it consumes it *doesn’t need* to be subsidized”

            You need to study more economics. Your premises imply that national defense does not need to be funded. That’s dumb. It proves too much.

            I don’t think I care to try to explain exactly where you’ve gone wrong, but do see my other reply in this thread that mentions yachts.

            In the case of worker co-ops, the subsidy would enable the satisfaction of preferences of people who otherwise wouldn’t have sufficient money.

          • Mick Price

            “You need to study more economics. Your premises imply that national defense does not need to be funded.”
            It doesn’t but that’s another matter. If you’re going to argue that somehow coops are an all-or-nothing deal that can’t exist because of free riders, make a case.

            “In the case of worker co-ops, the subsidy would enable the satisfaction of preferences of people who otherwise wouldn’t have sufficient money.”
            But they aren’t prepared to pay the costs to get those satisfactions. Which means that they would prefer other satisfactions that cost the same. Which means if we’re giving them stuff we should give them that stuff instead.

            from previous post
            “Just because the workers aren’t willing to work for less, doesn’t mean they aren’t receiving any value. ”
            Yes it does. If you aren’t prepared to pay anything in terms of reduced wages to work in a coop then you don’t value it at all. People who value things are prepared to give up other things for them, like money.

            “They simply might not have enough money for their preferences to affect the market price.”
            Except that they do, because the coops presumably pay non-starvation compensation. So they can work there if they want, provided they endure a lower standard of living. If they don’t have enough money for their prefences (in this area) to affect the market price that’s because they prefer things that cost the same as working at the coop to working at the coop. So let them have that.

          • Konrad_Lorenz

            “But they aren’t prepared to pay the costs to get those satisfactions.
            Which means that they would prefer other satisfactions that cost the
            same.”

            How do you not understand that this is nonsense? A person could literally be willing to kill or die for something, which nevertheless, they “aren’t prepared to pay the costs to get.” Preferences are not revealed by people “choosing” not to buy things that they don’t have the choice to buy in the first place.

            If you give someone 100 million dollars and they don’t buy something for $2M, you know something about their preferences. But if you take the average person whose net worth is less than $100k you don’t have that information about them, one way or another. You factually don’t know whether they _would_ buy the thing, if they had the money. The fact that they don’t buy it now reveals nothing.

            > > “Just because the workers aren’t willing to work for less, doesn’t mean they aren’t receiving any value. ”

            > Yes
            it does. If you aren’t prepared to pay anything in terms of reduced
            wages to work in a coop then you don’t value it at all.

            Again, you’re speaking nonsense. You’re implying that if you give a person $2 million dollars, and they then buy things that they wouldn’t have bought before you gave them that money, that therefore those things have no value. Otherwise they would have bought them before!

            Your ideas here are not internally consistent — your model of human preferences and rationality does not work. In reality, people make different buying choices depending on how much money they have available — your mental model cannot cope with this fact. You seem to be assuming that necessarily all preferences are already revealed, when the reality is that preferences can be revealed which were previously not revealed, by a change in income (or a change in price).

            Concretely, if someone is working in a job and making $15k/yr, and they _don’t_ choose to take a job making $0k/yr, that doesn’t show that they wouldn’t gain any value from taking that $0k/yr job if it suddenly paid the $15k/yr instead. In fact, it doesn’t even show that the person would not be willing to kill someone else (or chop off their own arm, or whatever else you imagine) in order to have that job. It just shows that they don’t have the choice available to make $0k/yr.

            (And of course, even something like $5k/yr is basically the same as $0k/yr — unsustainable, not an available choice.)

          • Mick Price

            “How do you not understand that this is nonsense? A person could literally be willing to kill or die for something, which nevertheless, they “aren’t prepared to pay the costs to get.” ”
            Well then it’s a good thing we don’t allow people to kill to get things isn’t it, otherwise they would. If you’re not prepared to sufficiently reward the people who produce something (and that’s not just the workers) to get it then no you don’t prefer it to other things that cost the same amount of resources.

            “Preferences are not revealed by people “choosing” not to buy things that they don’t have the choice to buy in the first place.”
            Except they are. Even if something was beyond the total resources of a person he could still gamble to get the resources to buy it. The fact that he doesn’t shows it’s not what he prefers out of all the things his resources could buy.

            “But if you take the average person whose net worth is less than $100k you don’t have that information about them, one way or another. You factually don’t know whether they _would_ buy the thing, if they had the money. The fact that they don’t buy it now reveals nothing.”
            I do know that they prefer other things with lower costs to that thing. That’s all I need to know.

            ” Yes

            it does. If you aren’t prepared to pay anything in terms of reduced

            wages to work in a coop then you don’t value it at all.

            Again, you’re speaking nonsense. You’re implying that if you give a person $2 million dollars, and they then buy things that they wouldn’t have bought before you gave them that money, that therefore those things have no value. Otherwise they would have bought them before!’ ”
            No that’s not what I’m implying at all. I’m not implying anything I’m stating outright that if someone isn’ prepared to take a pay cut to work at a cooperative then they don’t value working at a cooperative above a wage position. It’s that simple. You’re trying to bring in extreme cases of something costing more than people have in total to distract from the actual case. If it were the case that cooperatives were so much less productive that workers couldn’t live if they weren’t supported, what would that say? It would say that modern life is impossible without wage labor. I don’t believe that and neither do you.

            ” In reality, people make different buying choices depending on how much money they have available — your mental model cannot cope with this fact. ‘
            No it copes with it fine. I’m perfectly aware that choices might change dependent on income, but that’s because people can satisfy more preferences. You have a problem with it though.

            “You seem to be assuming that necessarily all preferences are already revealed, when the reality is that preferences can be revealed which were previously not revealed, by a change in income (or a change in price).’
            But unless those changes happen who cares what the preferences are? I might prefer to buy a Rolls Royce instead of Toyota if I won a billion dollars but since that hasn’t happened who cares? What matters is the choices that people ACTUALLY FACE.

            “Concretely, if someone is working in a job and making $15k/yr, and they _don’t_ choose to take a job making $0k/yr, that doesn’t show that they wouldn’t gain any value from taking that $0k/yr job if it suddenly paid the $15k/yr instead.”
            No they might well take that job, so what? What it does say is that they prefer $15K a year and their present job to $0 a year and the other job. That’s the important thing. So if you want to help them, don’t give them $15K a year to do the other job, just give them $15K a year. They’d prefer that. Then if they decide that they want to do the job for $0 they can do that. If they prefer to do their previous job they can do that. It’s not that hard.

            “Perhaps I should also point out that the fact that someone is unwilling to drop from a $15k/yr income to a $5k/yr income in order to change from one job to another, DOES NOT imply that THE SAME PERSON, with THE SAME PREFERENCES, would not be willing to drop from a $115k income to a $15k income to make the same shift in jobs. ”
            No you’re quite right, and nothing I said implies otherwise. So what? The problem is if people aren’t willing to tolerate lower wages to work in a cooperative then they don’t value working in a cooperative. Look it’s not that hard, if you don’t want to pay for it you don’t value it. This fluff about how people might value it under different circumstances is wasting my time.

            “So, given a person with those (CONSISTENT) preferences, is the value of having the new job worth at least $100k more than the old job? Or is it not even worth $10k?”
            As you just fucking pointed out that would fucking depend on the fucking circumstance the person fucking well found himself in wouldn’t it? This is a new grade of stupid, where someone explains why something isn’t valid then asks you why it isn’t valid.

          • Konrad_Lorenz

            “The problem is if people aren’t willing to tolerate lower wages to work
            in a cooperative then they don’t value working in a cooperative.”

            But we don’t know that people aren’t willing to tolerate lower wages to work in a cooperative! This is why I said this:

            > “So, given a person with those (CONSISTENT) preferences, is the value of
            having the new job worth at least $100k more than the old job? Or is it
            not even worth $10k?”

            …which is a question you don’t answer.

            Now, maybe it’s the case that every person who would not take a pay cut from $15k to $5k to work in a cooperative _would_ take a pay cut from $100k to $15k to work in a cooperative. Right? You acknowledge it’s possible, you say. So let’s assume that as a hypothetical, OK?

            In that case, can you still say “people aren’t willing to tolerate lower wages to work in a cooperative” if those people happen to be making $15k currently instead of $100k? By premise, they’d be willing to take a pay cut of $85k, so (given that premise) can you still say they wouldn’t be willing to tolerate lower wages?

          • Mick Price

            “But we don’t know that people aren’t willing to tolerate lower wages to work in a cooperative! ”
            Great then they don’t need subsidies do they?

            “”So, given a person with those (CONSISTENT) preferences, is the value of

            having the new job worth at least $100k more than the old job? Or is it

            not even worth $10k?”

            …which is a question you don’t answer.”

            As I said before: “As you just fucking pointed out that would fucking depend on the fucking circumstance the person fucking well found himself in wouldn’t it? ”
            Jesus asshole at least keep track of the things YOU say.

            “Now, maybe it’s the case that every person who would not take a pay cut from $15k to $5k to work in a cooperative _would_ take a pay cut from $100k to $15k to work in a cooperative. ‘
            It’s almost inevitable. Not everyone values what you think they should at what you think they should.

            “In that case, can you still say “people aren’t willing to tolerate lower wages to work in a cooperative” if those people happen to be making $15k currently instead of $100k?”
            Given their current circumstances YES. That’s the fucking point you slow kid bothering the AP class.

            “By premise, they’d be willing to take a pay cut of $85k, ”
            IF CIRCUMSTANCES WERE DIFFERENT WHICH THEY ARE NOT! Jesus fucktard YOU’VE answered this question and I have to fucking tell you over and fucking over. Are you fucking trolling? Because it’s hard to believe that you’re that stupid and haen’t set your computer on fire to make it run faster.

          • Konrad_Lorenz

            PS. is your position that willingness to kill for something does not reveal any preference?

            (It’s certainly not true that people aren’t “allowed” to kill for things; in a way, all rights are founded on the willingness of certain people to fight — to kill and to risk their own death — to establish them. And certainly the USA government was founded that way. Of course, all this happens in a logically prior context to the one in which things are “allowed’ or not.)

      • ncovington89

        “I think you’re missing a huge problem here. Co-ops are *already* possible. If they need to be subsidized its because there aren’t enough people seeing their value to join/create/invest in them”

        As co Ops are owned by the workers, by definition nobody else (like a private investor) can benefit from it. Workers often don’t have the cash upfront to start them, and have difficulty (though consider reading about New Era Windows and Doors for a counter example).

        “If you subsidize them then you are subsidizing a form of business that’s been pretty well shown to be inferior to the standard form of capitalism – if it was better don’t you think more people would use that form of organization? People aren’t stupid (mostly, and in aggregate). So you’ll *always* have to subsidize these businesses because the instant you turn off the ‘free money’ spigot people will withdraw and seek more profitable places to park their money.”

        Of course, if the co Ops were successful, they would generate new wealth to lots of people, who would pay taxes, which could be used to fund further grants, etc. etc. To answer your other question on why people don’t (so much) do it now: You could have said the same thing to the people who started the farmers co ops long ago: “if that would work we would already be doing it.” But of course farmer co ops are well known as a stable and effective business arrangement.

        • Mick Price

          “But of course farmer co ops are well known as a stable and effective business arrangement. ”
          Yes and they became so without subsidy. If something can’t be done without subsidy, why bother? If it’s so good why wait until somebody else provides the resources?

          • ncovington89

            Well I think there are relevant differences between farmers co Ops and other varieties of co op. Namely that farmers already had a farm and equipment, but chose to bundle everything together as an alternative to farmers insurance and to stabilize their income. However, a co op that manufactures microwaves, for example, won’t start with a group of workers who already own a factory, and average people often don’t have the means to purchase such things outright. It seems you are offended by “someone else providing the resources” but this also happens under capitalism, and the way capitalism does it is by transferring money from (not exclusively but most prominently) the wealthy to the business, so that the business must later transfer that wealth back with interest, so that the rich benefit disproportionately even though did no labor at all.

          • Mick Price

            Those diffferences aren’t relevant. Lots of workers have capital, and those that don’t have can borrow money. A captialist providing resources isn’t the same as someone else doing so because they’re forced to. If coops are a good idea it should be easy to get te resources voluntarily without using a gun to get them. Someone should be able to say “I will commit my resources and labor to create this business, taking the risks and rewards.”. If it needs resources it can’t pay for it’s not worth it, it’s that simple.

          • Konrad_Lorenz

            Well, at best, what funding co-ops will do is basically “waste” money on making people happier who don’t have money to spend to make themselves happier.

            If your premise is that it’s “not worth it” for any value to go to anyone who can’t pay for that value, then you will certainly reach a negative conclusion about subsidizing coops. But you should recognize that most other people are not going to accept that premise.

          • Mick Price

            No at worst it will waste money on expensive benefits for relatively well off people who would not buy these benefits at their cost price.

            “If your premise is that it’s “not worth it” for any value to go to anyone who can’t pay for that value, ”
            Not what I said at all. You can provide any value you want to whoever you want, if you think it’s worth it. Subsidy however is resources being provided by those who DON’T think it’s worth it. If you can find anyone to say they will commit their capital, time etc. go for it, whether you’re providing a benefit to yourself or others.

          • Konrad_Lorenz

            Your argument proves way too much. For example you could say the same thing about providing healthcare to people who cannot afford to pay for it themselves (for example, providing a $30k life-sustaining surgery to someone whose net worth and available credit sums to only $15k). I’m not even trying to argue this point with you but just inspire some awareness on your part that other people don’t share your premises.

            The fact is that the workers, as a whole, cannot afford to buy new working conditions for themselves — they cannot afford to buy out their own employers. So to talk about whether people “WILL” commit their capital, time, etc., is nonsense. They CANNOT, regardless of how their personal will is oriented.

          • Mick Price

            “For example you could say the same thing about providing healthcare to people who cannot afford to pay for it themselves (for example, providing a $30k life-sustaining surgery to someone whose net worth and available credit sums to only $15k).”
            Well yes, they chose not to get health insurance, so evidently they didn’t value life-sustaining surgery at $30k. They preferred to buy other things. If YOU value their life at $30, or you and some of your friends do, you can spend the money. Good for you if you do.

            “The fact is that the workers, as a whole, cannot afford to buy new working conditions for themselves — they cannot afford to buy out their own employers.”
            First of all you haven’t shown this. I have no idea whether the “working class” (however defined) has enough assets to set itself up in cooperatives. Secondly it’s certainly true that some workers can afford to work in cooperatives. Of those some, do some don’t. Those that do don’t need subsidies, those that don’t shouldn’t be given subsidies just to work in their preferred way, not while there are still genuinely needy people.

            But let’s suppose you’re right and “the workers” cannot afford to buy out their employers. Firstly this means that this is so expensive that it’s worth more than literally everything the workes have. For that much is a change in work practices the best way to spend the money? You propose to just take other people’s shit and give it to them so they can. But if you’re going to take other people shit and give it to the workers, why not let the workers decide what to spend it on?

            What you’re saying is that we should redistribute resources, not to benefit workers but to persuade them to work in an inefficient way.

          • Konrad_Lorenz

            “Well yes, they chose not to get health insurance, so evidently they didn’t value life-sustaining surgery at $30k.”

            Or maybe in my hypothetical there is no such thing as health insurance at all. You’re just inserting this premise into my hypothetical and by doing so, avoiding the point it makes.

            In any case, at least you’re being consistent. So kudos. You have committed yourself to that position and although you make this (I think backhanded) attempt to moralize it, you at least don’t hide it.

            ” You propose to just take other people’s shit and give it to them so they can.”

            I’m not actually proposing it, though. I think I’ve been quite clear. I’m just explaining that the logic you use is not consensus logic. It proves too much: for example, you should recognize that “people who cannot afford healthcare do not value their own lives, therefore it is efficient to let them die” does not have the backing of consensus, so that you should understand it is a very poor argument to make. This is in a way aside from whether it is actually true or not. The point is it doesn’t make sense for you to use it as a premise.

            In connection with that:

            “First of all you haven’t shown this. I have no idea whether the “working class” (however defined) has enough assets to set itself up in cooperatives.”

            1. I didn’t use the term “working class” so don’t put it in quotes. I said “workers.”

            2. It’s true I didn’t show it, but use some common sense. Or just choose a random company and look at its value. For example, Wal-Mart is worth $235 billion, it has 2.2 million employees, so they’d each have to put in over $100,000 to buy it out (assuming — falsely — that completely buying it out wouldn’t raise its market price).

            The vast majority of those employees make less than $20k/yr, so they’d need to have more than 5 years worth of wages saved to buy out the company. Factually, they don’t.

            I suppose you will say that workers don’t save 5 years worth of wages it just shows they value other things more, which is dumb, because if you increase your savings rate too much, it ends up lowering your income by making you homeless and unemployed. And those workers are definitely on the income level where that is a realistic concern.

          • Mick Price

            “I’m just explaining that the logic you use is not consensus logic.”
            There’s no such thing.

            “for example, you should recognize that “people who cannot afford healthcare do not value their own lives, therefore it is efficient to let them die” ”
            Which I did not say. If NOBODY values their lives it’s efficient to let them die.

            “does not have the backing of consensus, ”
            Yeah argumentum ad populem is still shit. Further news at 11.

            “This is in a way aside from whether it is actually true or not. ”
            Wow, that’s really toxic.

          • Mick Price

            “2. It’s true I didn’t show it, but use some common sense. Or just choose a random company and look at its value. For example, Wal-Mart is worth $235 billion, it has 2.2 million employees, so they’d each have to put in over $100,000 to buy it out (assuming — falsely — that completely buying it out wouldn’t raise its market price).”
            Yep less than most of their houses, so affordable.

            “The vast majority of those employees make less than $20k/yr, so they’d need to have more than 5 years worth of wages saved to buy out the company. Factually, they don’t.”
            There’s this thing called leverage.

            “I suppose you will say that workers don’t save 5 years worth of wages it just shows they value other things more, ”
            Yep.

            “which is dumb, because if you increase your savings rate too much, it ends up lowering your income by making you homeless and unemployed. ”
            No it doesn’t. Increasing the savings rate means that more resources are put into investment rather than consumption, not that incoe goes down. At worst there would be some disruption if savings patterns changed _suddenly_. Really stop pretending to understand economics.

    • Incunabulum

      “I don’t think people would want to do this because there are ways to
      “spread your earnings out” within a co-op system by having deferred
      compensation. If the business started losing enormous amounts of money
      over a long period of time you STILL would not have the advantage of a
      “steady paycheck” because by that point, the business wouldn’t be
      profiting anyone, and would go under, as all business models must.”

      Ideally you *don’t* invest any of your deferred income into buying an interest in the place you work at (many workers at conventional capitalist business have been screwed when their pension fund did this), you buy in *elsewhere* SPECIFICALLY to hedge against the risk that your business might disappear. Its the same with investing in general – you want an income portfolio that is diversified – invested in different economic sectors, different investment types (stock vs currency speculation), on different timescales, even in different countries (to hedge against anything short of a global economic downturn).

      Deferring income to buy into your own workplace only works for as long as your company is growing. As soon as its growth tapers off you’d be better taking that money immediately, and if it starts dying – as you pointed out, all businesses do – then what? Do you hold onto ever more worthless share certificates until someone comes along and offers to buy the physical assets for pennies on the dollars that you paid for them?

      All-in-all, it looks (admittedly I’ve not got what it takes to give it an in depth examination) like a worker coop *might* give you more freedom at work – for the price of enslaving you to that company.

    • Libertymike

      “Plenty of research shows that democracies are far less inclined to war?”

    • Adam Minsky

      The former editor of Chronicle magazine Thomas Fleming has rather convincingly argued democracy and empire building often go hand and hand. This was true of the Athenians, the Florentines, the 19th century British, and the 20th century Americans.
      Fleming contends that this is true because democracies both cater to the appetite of the masses and are enthralled by the rich and powerful. An arresting thesis.

      • ncovington89

        What alternative to democracy would fix this problem and how do you know it would work?

        • Adam Minsky

          This question is probably above my pay grade. I read on a different comment thread recently that the founding Fathers thought that a healthy society needed to combine elements of democracy, monarchy, and aristocracy. Perhaps ,and I underline perhaps, that would be a good place to start when addressing your question.
          The same poster went on to say that our current society has adapted the worst elements of these three trends. We have an imperial presidency, a political elite that is hostile to the mass of the population, and a citizenry that feels entitled to a wide array of government goodies. That description is certainly overdrawn, but it probably does contain a kernel of truth.
          I apologize that I don’t have a more substantive response to your excellent inquiry.

          • ncovington89

            Berne Sanders supporters have been widely portrayed as “just wanting free stuff” which I find ironic, since Sanders’ platform revolves around a jobs program, free college (where you do four years of unpaid labor to get a job), with the only “free goodies” being healthcare, which I think of as more of a humanitarian calling (it’s also more economically efficient, which I’d be happy to argue if called upon to do so). I don’t know that Obama is imperialist, though I admit disturbance at the drone warfare. The political elite are definitely a problem, but that will correct itself since the elite will either adapt or be voted out of office.

          • Adam Minsky

            I have some criticisms of Sanders, but I do agree that his base of support can not be reduced to a desire for free stuff. I largely agree with your statement on Obama. The issue of a political (or perhaps cultural) elite is more complicated. This elite would be located in the media, entertainment industry, and universities. Hence, it could not be voted out of power and would have little reason to adapt to the wants or mores of the larger population.

  • j r

    The claim that democratically-run, worker-controlled firms would result in greater freedom for workers seems like a strange one for libertarians to make. After all, most libertarians would deny that granting all citizens a vote in a political democracy means that you are your own boss in a meaningful sense.

    Direction matters. Giving someone a vote does not guarantee their freedom, but excluding an entire class of voting is a pretty good sign that their freedom is severely curtailed. If the U.S. government offered me a significant reduction in my tax bill for giving up all future rights to vote, I’d take the deal. If Congress passed a law restricting voting rights for all people of my ethnicity, I’d leave the country.

    It isn’t about voting. It’s about equity. This is why I’m not a leftist. If someone offers you a “voice,” without any real, exercisable ownership rights, they’re running a scam. That said, there are plenty of examples of firms (in law, consulting, other professional services) that operate as partnerships and I don’t see any reason why you could not expand on that model in a way that included lower-level workers and those employed in other than high-skilled service professions.

  • TheBrett

    In both economic and political democracies, your single vote is unlikely to be decisive, meaning that you are exercising little to no real control over the direction of the democracy.

    This argument is strange to me. It’s true that individually your vote doesn’t matter. But if you cast it as part of a compact with others to achieve specific goals, then it most certainly does matter – it’s like pooling a whole ton of small contributions into a mutual fund or savings bank to do investments and get returns. Your individual $2000 doesn’t mean much in the scheme of things, but pool it with ten thousand other people . . .

    As for whether or not it eliminates bosses, the answer depends on firm size but is usually not. The difference, though, is that you have the power to organize to remove an ineffective or abusive boss aside from appealing to a higher authority or quitting en masse. I think that matters.

    Suppose a risk-averse worker wants to sell her shares to a second worker in exchange for a steady income. Is this transaction permitted?

    If part of your contract to work in the worker-owned firm is that you can not selling your voting shares and profit share to another, then you’re in violation of contract and lose your position. It’s no different than any other contract.

    Are you asking whether folks could choose to form hierarchical organizations by choice in this economy with no internal democracy or worker ownership?

  • Dshapiro

    Chris, you may be interested in my blog post, “Query for Left Libertarians’ ” where I make some similar points to the ones you make.

    Daniel Shapiro

    • Chris Freiman

      Thanks for the note–that’s a great post!

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  • assman35

    Co-op fail for reasons other than economic efficiency. This is one thing I hate about these discussions…no one understands the way the real world works. Co-op aren’t used for the following reasons:

    1) They don’t fit into any of the existing legal, financial or other systems. For instance, would a venture capitalist ever fund a co-op? Probably not. Would a bank give them loans…again a huge fat no.

    2) Co-ops are ideologically driven. Presuming that co-ops are interested in efficiency or sensible operation is ridiculous. Co-ops are mostly run by delusional leftists who are unlikely to be economically rational. Abortion and environementalism having nothing to do with each other in theory but in the real world they do.

    3) Co-ops have huge huge issues when it comes to dealing with founders and succession. A co-op might start with a few guys who took huge risks and diminished salary to run it. Later the co-op is incredibly successful and every new member is treated the same as they are!? Obviously in this situation there is a strong disincentive to hire anyone because each person you hire diminishes your share of the profits. This is a huge and obvious problem and yet strangely one that is barely talked about.