Mill's vision

Today's the 200th birthday of John Stuart Mill. It's celebrated here, here and here, with a more critical view here. Some of the great man's own words are here.
One thing we should celebrate, and re-affirm, is Mill's economic vision. Like Marx, he looked forward to the end of class conflict:

It is not to be expected that the division of the human race into two hereditary classes, employers and employed, can be permanently maintained. The relation is nearly as unsatisfactory to the payer of wages as to the receiver...The relation of masters and work-people will be gradually superseded by partnership, in one of two forms: in some cases, association of the labourers with the capitalist; in others, and perhaps finally in all, association of labourers among themselves....The form of association...which if mankind continue to improve, must be expected in the end to predominate, is not that which can exist between a capitalist as chief, and workpeople without a voice in the management, but the association of the labourers themselves on terms of equality, collectively owning the capital with which they carry on their operations, and working under managers elected and removable by themselves. (Principles of Political Economy book IV, ch 7) 

Suche schemes, said Mill, would increase labour productivity, by giving workers greater incentives; in his chapters on Socialism, Mill called for "an indefinite increase in the share of profits assigned to the labourers." But this material benefit, he said:

is as nothing compared with the moral revolution in society that would accompany it: the healing of the standing feud between capital and labour; the transformation of human life, from a conflict of classes struggling for opposite interests, to a friendly rivalry in the pursuit of a good common to all; the elevation of the dignity of labour; a new sense of security and independence in the labouring class; and the conversion of each human being's daily occupation into a school of the social sympathies and the practical intelligence.

Mill's vision here is not that of state-owned enterprises. Government management, he said, is "proverbially jobbing, careless, and ineffective.". Instead, it's a vision of worker co-ops. And what's more, of co-ops that compete against each other:

While I agree and sympathize with Socialists in [the] practical portion of their aims, I utterly dissent from the most conspicuous and vehement part of their teaching, their declamations against competition...They forget that wherever competition is not, monopoly is; and that monopoly, in all its forms, is the taxation of the industrious for the support of indolence, if not of plunder. They forget, too, that with the exception of competition among labourers, all other competition is for the benefit of the labourers, by cheapening the articles they consume.

John Stuart Mill, market socialist.

Comments

[Laurent GUERBY]

You might find of interest at Economist's View (I don't see it in your link section):

http://economistsview.typepad.com/economistsview/2006/05/workers_as_owne.html

Cooperatives are totally invisible in mainstream reporting, I wonder why. Are they insignificant as a share of production?

[Paulie]

Chris and Laurent,

A few comments. Co-ops are undoubtedly a good thing, but co-op businesses where the workers concentrate on control, as opposed to ownership, often result in the more industrious workers becoming subsiders of indolence (to echo Mill's langage).

Chris - I know we've disagreed in the past about the value of Direct over Representative Democracy. But as a director of a Worker Co-operative, I'd suggest that in industrial democracy, this arguement is really foregrounded. Thus my preference for elected officers.

And Laurent, the co-op I'm involved in won't appear on many reports because we run it like any other company. BUT the staff own 100% of an Employee Benefit Trust that, in turn wholly owns the Co-op (this is a simplified explanation - I'd have to go into more detail for a fully accurate explanation of the structure). We extract shareholder value both in terms of profits / dividends, and in terms of the social direction of the company. Those values impact on the work that we chose to do.

I'd hesitate to use the word 'ethical' because I reach for my revolver whenever I hear anyone else use it....

;-)

[dearieme]

You can call Mill a socialist only by ignoring the way the word has been used since his day, and by ignoring the actions of self-described socialists. But then you know that, you tease.

[Laurent GUERBY]

Paulie, thanks for sharing your experience, I know of other companies here in France that have the same kind of "funny" structures (company owned by an "association" where all workers are members :).

I'm surprised that little or no literature can be found comparing employer owned companies (in some way) vs traditional companies performances given that incentives are such a big topic in economics.

If you know of some, let me know :)

[Paul Lyon]

``Some of the great man's own words are here.''

And others may be found here:

http://www.la.utexas.edu/research/poltheory/mill/index.html

as well as some of the same with better mark-up :-)