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Clif's Reviews > Democracy at Work: A Cure for Capitalism
Democracy at Work: A Cure for Capitalism (Democracy at Work, 5)
by
by
It is hard to give this book a rating
The first 65% of it cannot be bettered. Wolff describes capitalism perfectly along with the failures of socialism and communism, making the valid point that socialism is really a state directed form of capitalism; there is still the division between the directors of a company who make all the decisions, and the workers who, for wages, do what they are told to do by the directors.
Then comes the last part of the book where the author makes his proposal for change, the implementation of what he calls "Workers' Self-Directed Enterprise" (WSDE) and that is where I found the book preposterous.
In a WSDE the workers take over the entire business and direct its operation. This means doing all the things business executives do now. How to make a product, when to make changes in the product or introduce a new product, how to sell the product, how to use the profits all would be done by the workers who collectively would be the board of directors, or rather who would rotate through being directors.
It wouldn't work.
First of all, people are people. Those who work are no more moral or free of self-interest than those who manage. The difference is in the power the latter have over the former and the law that does not prevent management from self-dealing, something not available to workers. If workers were put in charge of what to do with the profit of a company, they would surely direct it as much as possible to themselves and not to a lower price to the consumer. Unions have been known to make demands regardless of the danger to the survival of the company. Workers might well decide to have a 20 hour workweek. Just as surely as we now have company management using stock buybacks to line its pockets rather than to use the money to improve the product, so we could expect a group of workers to do the same, albeit spreading the takings more justly across all the employees of the company.
Secondly, why would good management come from workers who might well have no aptitude for the job? Wolff proposes training for workers so they could manage a company properly but there already are business schools. Job specialization is a known producer of quality because doing a particular job as a career produces thoroughly competent workers, whether or not they like having the same job over a period of time. It's well known (I have seen it) that workers do not like to be told to change what they do and be trained for something different. Those who do enjoy challenge and welcome it soon move into management but the majority fear change. WSDE's would not take risks.
Third, incompetent management is punished by removal from the job. While it is true that CEO's can lead a company to disaster and still get pay increases, in the end they get removed. Can you imagine the internal arguments within a WSDE about who is doing a good job and who isn't? Factional strife could not be avoided. And who gets to decide who is removed? The workers vote on it? Who gets fired? The workers vote on it? This would be unworkable.
The problems of capitalism as we know it are not insoluble. They could be corrected with changes in business law, such as limiting maximum salaries to some multiple of basic worker pay. Stock buybacks could be outlawed. Loading up executives with stock options could be outlawed. Executive compensation committees dissolved. This would certainly produce a more just distribution of profits than is the case now without concocting a way to put workers in charge of the company for which they work.
But towering above all that I have just written, the looming, immediate problem with capitalism is that it is not sustainable. There is no such think as infinite growth in a finite physical world, planet earth. This is bearing down on us now with climate change, ecological damage and the ever increasing load of debt on both countries and individuals. Every company wants more business. Every individual wants to have more stuff. At the same time population growth has not been halted and intense competition for scarce resources is bound to eventually lead to military conflict. There is no miraculous power that assures there will be enough of everything for everyone.
The problem this book addresses is moot in light of the brick wall civilization is racing toward at ever increasing speed. Read Democracy at Work for the excellent analysis of how capitalism works, a fair analysis that does not trash the concept. Think of it this way - on an out of control train certain to jump the track unless action is taken, should the passengers be concerned over whether everyone on board is being treated fairly as catastrophe looms?
The first 65% of it cannot be bettered. Wolff describes capitalism perfectly along with the failures of socialism and communism, making the valid point that socialism is really a state directed form of capitalism; there is still the division between the directors of a company who make all the decisions, and the workers who, for wages, do what they are told to do by the directors.
Then comes the last part of the book where the author makes his proposal for change, the implementation of what he calls "Workers' Self-Directed Enterprise" (WSDE) and that is where I found the book preposterous.
In a WSDE the workers take over the entire business and direct its operation. This means doing all the things business executives do now. How to make a product, when to make changes in the product or introduce a new product, how to sell the product, how to use the profits all would be done by the workers who collectively would be the board of directors, or rather who would rotate through being directors.
It wouldn't work.
First of all, people are people. Those who work are no more moral or free of self-interest than those who manage. The difference is in the power the latter have over the former and the law that does not prevent management from self-dealing, something not available to workers. If workers were put in charge of what to do with the profit of a company, they would surely direct it as much as possible to themselves and not to a lower price to the consumer. Unions have been known to make demands regardless of the danger to the survival of the company. Workers might well decide to have a 20 hour workweek. Just as surely as we now have company management using stock buybacks to line its pockets rather than to use the money to improve the product, so we could expect a group of workers to do the same, albeit spreading the takings more justly across all the employees of the company.
Secondly, why would good management come from workers who might well have no aptitude for the job? Wolff proposes training for workers so they could manage a company properly but there already are business schools. Job specialization is a known producer of quality because doing a particular job as a career produces thoroughly competent workers, whether or not they like having the same job over a period of time. It's well known (I have seen it) that workers do not like to be told to change what they do and be trained for something different. Those who do enjoy challenge and welcome it soon move into management but the majority fear change. WSDE's would not take risks.
Third, incompetent management is punished by removal from the job. While it is true that CEO's can lead a company to disaster and still get pay increases, in the end they get removed. Can you imagine the internal arguments within a WSDE about who is doing a good job and who isn't? Factional strife could not be avoided. And who gets to decide who is removed? The workers vote on it? Who gets fired? The workers vote on it? This would be unworkable.
The problems of capitalism as we know it are not insoluble. They could be corrected with changes in business law, such as limiting maximum salaries to some multiple of basic worker pay. Stock buybacks could be outlawed. Loading up executives with stock options could be outlawed. Executive compensation committees dissolved. This would certainly produce a more just distribution of profits than is the case now without concocting a way to put workers in charge of the company for which they work.
But towering above all that I have just written, the looming, immediate problem with capitalism is that it is not sustainable. There is no such think as infinite growth in a finite physical world, planet earth. This is bearing down on us now with climate change, ecological damage and the ever increasing load of debt on both countries and individuals. Every company wants more business. Every individual wants to have more stuff. At the same time population growth has not been halted and intense competition for scarce resources is bound to eventually lead to military conflict. There is no miraculous power that assures there will be enough of everything for everyone.
The problem this book addresses is moot in light of the brick wall civilization is racing toward at ever increasing speed. Read Democracy at Work for the excellent analysis of how capitalism works, a fair analysis that does not trash the concept. Think of it this way - on an out of control train certain to jump the track unless action is taken, should the passengers be concerned over whether everyone on board is being treated fairly as catastrophe looms?
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Reading Progress
October 11, 2024
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Started Reading
October 13, 2024
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Finished Reading
� First I agree with you that people are people and workers are not any more likely than management to like more money.
� Never heard of a WSDE but sounds a lot like a cooperative which for the most part works rather well.
� You are shortchanging the “workers� almost to the point of snobbery.
� Those well-qualified executives & boards you speak of are terminally fighting against & winning any laws to govern their greedy behavior
� You say “If workers were put in charge of what to do with the profit of a company, they would surely direct it as much as possible to themselves and not to a lower price to the consumer.� Well, my friend, this is where capitalism comes in. If you don’t pay attention to the price of your product vs your competition, you lose customers, & eventually must shut down. I don’t happen to think of “workers� as being that dumb.
� Job specialization has been proven to: produce bored workers whose production drops, produce more absenteeism and to cause high turnover, among other negatives—all of which affect profits. As you said “people are people.�
� Specialization also produces people who have little understanding of the way the company works to make a profit, which just might be why the WSDE suggests management training. And there is no reason incompetent management would not be removed from the job in a WSDE. Again, you’re assuming “workers� aren’t smart enough to know what to do.
� “It's well known (I have seen it) that workers do not like to be told to change what they do and be trained for something different…� Your opinion because I’ve witnessed the opposite.
� Buybacks are the result of tax laws that yes, need to be changed because this is simply a way the rich get tax breaks that ordinary people do not get.
� As for Unions: “Our results suggest that establishment closure is not the main mechanism of the employment reallocation response to unionization. Rather, it seems more likely that employers respond by reducing employment.� (D’Nardo, John, Lee, David S. “Do Unions Cause Business Failures?� March 2003.)