Cooking the Books: Socialism in one enterprise? (2020)

The Cooking the Books column from the October 2020 issue of the Socialist Standard

In an article in Counterpunch (28 July) Richard D. Wolff, of ‘Capitalism hits the fan’ fame, criticised the widespread definition of capitalism as ‘private’ or ‘free’ enterprise on the grounds that it ignores state enterprises and that ‘free’ is a loaded term that in any case only applies to those who own enterprises. He offered instead:

  ‘A key unique quality of capitalism is the employer/employee relationship between two different groups of the people engaged together in the economic system. That relationship entails an exchange of wages or salaries for labor power (the ability of an employee to work). A contract between employer and employee covers that exchange plus the employee’s exertion of brains and muscles over lengths of time and to ends specified by the employer. ’.

A defining feature of capitalism is indeed the wages system. Ending capitalism does involve the ending of this employer/employee relationship. Wolff, however, sees this as being implemented at enterprise level, describing as ‘instances of communist enterprises’ worker co-ops where ‘one and the same community designs, directs, and performs the work of an enterprise such that each community member has one vote and enterprise decisions are made democratically.’

His justification for calling worker co-ops ‘communism’ is that they are commonly owned by those working in them and end the employer/employee relationship as far as their members are concerned. But if the common ownership of something by a group is ‘communism’ then there are many other examples of it within capitalist society. What socialists aim at, however, is the common ownership of the means of life by society as a whole – a communist society.

Marx wasn’t opposed to workers forming co-operatives. In fact he saw their emergence as one of the signs that society was becoming ripe to move from a capitalist to a communist society; they showed that the individual private owner/employer was redundant and that workers were quite capable of organising production without them. He was, however, opposed to the reformist demand that the state should subside them. In his own words:

  ‘The co-operative factories of the labourers themselves represent within the old form the first sprouts of the new, although they naturally reproduce, and must reproduce, everywhere in their actual organisation all the shortcomings of the prevailing system. But the antithesis between capital and labour is overcome within them, if at first only by way of making the associated labourers into their own capitalist, i.e., by enabling them to use the means of production for the employment of their own labour’ (Capital, Volume III, Chapter 27).

In other words, under capitalism, workers co-ops had to function like a capitalist enterprise with all the shortcomings this involves such as, we can specify, having to make a profit to re-invest in up-to-date methods of production so as to remain competitive and stay in business.

Wolff’s conception of the role and significance of ‘co-operative factories’ is different. He envisages them as producing for the market alongside private and state enterprises both under capitalism and in ‘socialism’ (by which, going completely off the rails, he seems to mean places like the old USSR). He advocates co-operative enterprises as a way forward for workers within capitalism in the same way that other reformists used to advocate state enterprises.

This brings out that his definition of capitalism is incomplete. It needs to include as well as the employer/employee relationship that production is carried on for sale with a view to profit. Capitalism is a market society in which everything is bought and sold, not just labour power.

Common ownership on a society-wide scale implies that the democratically-run productive units would not be producing for a market, precisely because what they produced would belong to society and be available to be distributed in non-market ways, whether free distribution, free use or taking according to need.