Why not worker control?

"Workplace autonomy plays an important causal role in determining well-being" conclude Alex Coad and Martin Binder in a new paper. This is consistent with research by Alois Stutzer which shows that procedural utility matters; people care not just about outcomes but about having in having control, which is why the self-employed tend to be happier than employees.

This implies that a government that is concerned to increase happiness - as David Cameron claims to be - should have as one of its aims a rise in worker control of the workplace.

This is especially the case because research shows that the cliche is true - a happy worker really is a productive worker. For this reason, it shouldn't be a surprise that there's a large (pdf) body of research which shows that worker coops can be at least as productive and successful as hierarchical firms. "Cooperative firms do seem to produce moderately more output with a given set of inputs" concludes a study (pdf) of the US plywood industry. "Cooperatives are at least as productive as conventional firms" finds research (pdf) on French firms.

Greater worker control, therefore, might increase well-being directly and also raise productivity.

Which poses the question: why, then, is it so firmly off of the political agenda?

It's not because it's a loony lefty policy. For one thing, opposition to hierarchic control owes at least as much to Hayek's strictures against centralized planning as it does to Marxism. And for another, I'm not just thinking of full-blown worker soviets here, but of a range of degrees of worker autonomy. Shareholders have delegated control to management, so why shouldn't they do so - to some degree  - to workers? There is, after all, also evidence that shared capitalism can raise efficiency.

Nor do I think it good enough to claim that there's no voter demand - at least the level of party politics - for greater worker control. Such lack of demand might owe more to learned helplessness or to ideology than to rational preferences. And if politicians were serious about the leadership of which they so often prate, they would surely put onto the agenda policies which could do a lot to enhance well-being and efficiency.

Instead, I suspect there are other answers to my question.

One is that worker control is off the agenda now simply because it has been for decades.As Selina Todd writes of the 1945-51 government:

Labour's front bench was not committed to establishing economic or political equality. They promoted equality of opportunity. Workers were not granted any control over industry but were instead expected to submit to the authority of managers.

What we have here, though, is another example of an idea that's outlived its usefulness. In the 40s, most people did not know that centrally planned organizations were doomed to failure (the fear of being overtaken by the Soviet Union persisted well into the 60s). Nor did they have the evidence we now have that worker control is efficient whilst management control - for example in banks and some universities - can be a form of organized vandalism.

But the vandals have seized political as well as economic power. As Pablo Torija Jimenez has shown, "democratic" politics now serves the interests of the very rich. And these benefit from managerialist control of workplaces even if most of the rest of us do not.  

Comments

[Paul Walker]

Chris. My (somewhat long winded) answer to your question is http://antidismal.blogspot.co.nz/2014/07/why-not-worker-control.html

[An Alien Visitor]

Interesting stuff, including the Paul Walker response.

In response to Paul Walker re sports teams, of course some teams acquire all the best players and competition is thus stifled, so even in the free market USA, their sports have anti market rules (think of the draft) so teams are equalised. The point is that everything you claim is a disadvantage of worker owned firms could, seen from another angle, be a great advantage of them!

We could also point out that while not worker owned, Barcelona FC (a successful sports team) is supporter owned and tends to pick it players from the local region and with great success.

[Paul Walker]

Yes there are a (small) number of teams that are supporter owned. If fact are a few different ownership forms for sports teams but no, as far as I know, player owned teams. If anyone knows of one please let me know. I would love an example.

[An Alien Visitor]

Paul,

there are thousands (millions?)of worker owned sports teams all over the globe. And they are far more numerous. The number of worker owned sports teams who develop youth is also at a level capital owned teams could only dream of. I often attend a worker owned team that invests in youth every Sunday.

[Paul Walker]

Not really. Those sports clubs are controlled by their members who are not all players. Also I was thinking of professional teams.

[An Alien Visitor]

Not true, teams owned by those who play far outweigh teams that are owned by those who don't play, excluding youth teams for obvious reasons. But youth teams are effectively owned by workers, their kids play for these teams.

You may be speaking about professional teams but I am not. I am including the lot and wondering the social value of each. I would claim the social value of the worker owned teams far outweighs those of the pro teams.

[chris]

@ Paul - 3 quick points:
1. I'm not sure heterogenous labour rules out coops. Law and accountancy firms are v. often partnerships, but have a biggish range of skills.
2. I'm not arguing here for universal full-blown coops - merely that politicl parties should consider the idea more than they do.
3. The question: are coops a good idea? is different from: what aren't coops on the political agenda? Many bad ideas are on the political agenda. To argue that coops aren't on the agenda because they are a bad idea requires one to argue that they're an even worse idea than many other policies which the main parties do support. I don't think you can really claim that.

[Phil Beesley]

Vince Cable's sell off of Royal Mail? It may have been botched financially and consequent arguments are tedious.

But owing to liberals (small L liberals in different political parties), workers have a small share in Royal Mail. Just not enough.

[Dave Timoney]

Football clubs usually start as player-owned but are taken over (often by a minority of ex-players) once they require capitalisation (e.g. for a permanent ground).

As the club becomes more successful, so its capital increases (i.e. the capital value of the club, not the players who are pseudo-capital). Thus there will always be more player-owned (i.e. amateur) clubs than pro outfits.

All this tells us is that when an opportunity for profit arises, capital moves in. This is why Barcelona, for all their 'Mes que un club' schtick, have sold shirt-sponsorship rights to Qatar Airways, Nike and Beko.

Paul Walker's suggestion that worker-control tends to thrive in environments with homegenous skills, little organisational hierarchy, and simple decision-making, could be reinterpreted to say that worker control tends to occur where there is a high percentage of variable capital (i.e. labour). In other words, it tends to be factor-contigent.

This suggests that the limited success of worker control is as much about the secular trend of capital-labour substitution through automation as it is about an inhibiting ideology.

[Boffy]

It was known in the 1930's that worker control, or at least participation improved productivity. The Taylorists in the US worked closely with the unions against what they saw as amateurish managements, in Mexico the Cardenas government sought to introduce worker "control" as a measure of support for newly nationalised oil companies, and so on.

Of course, in Germany, its more developed social-democratic model is quite happy to have workers on boards, and as Trotsky wrote in the 1930's there have been no end of examples of "Mondism" and other forms of company unionism that simply incorporate the workers to better exploit themselves. Most forms of post-Fordism and Toyotism do the same.

But, Trotsky's point is valid. None of these represent actual worker control of the labour process, and more importantly the overall aims of the company in terms of its investment and so on. Why, because ultimately that could conflict with the profit motive of the firm, and in the short term it conflicts with the self-interest of management bureaucracies.

When Labour nationalised the coal mines in 1945, it also nationalised the Co-op owned coal mines, and in the process removed the only example of some kind of worker control in the coal industry - though the co-op owned mines were no more worker owned and controlled than any of the other co-op activities that were owned and controlled by the co-op members rather than workers.

Capitalists will never concede real worker control unless it is at the end of the barrel of a gun, which as Trotsky points out only happens during those very short periods during a revolutionary situation. That is why, as he says demands for "Nationalisation under Workers Control" outside those conditions are merely means of deceiving the workers - not that that stops nearly every organisation that claims to be "Trotskyist" from raising such ridiculous reformist demands. There is even less chance a capitalist state is going to hand over such control to workers.

Workers can only exercise control if they have direct ownership, which is why they can only exercise control if they establish worker owned co-ops.

[Brett]

I've read that a perennial issue with cooperatives that become too successful is that the owners start closing off access to new worker-owners and sell the company to outside investors, who then convert it into a more conventional firm. That seems like support for the idea that increased power for outside investors tends to enhance the power of management acting as their agents. The big co-ops that have avoided that - Mandragon - do so by simply not allowing the sale of equity in the cooperative.

For your broader point about worker control, I think it's a combination of

1. The "Great Man" theory of a superb Executive/Principal/Manager/President turning a company around refusing to die, which shows up as a push for increased managerial control and tends to mix with class contempt for workers down the line (unless they're high-end workers like engineers at Google, which not coincidentally coincides with them having other options).

2. The increasing issue of legal compliance and fear of litigation. That pushes companies and organizations more towards set-out procedures and managed requirements.

[Deviation From The Mean]

To quote Friedrich Engels,

"From the moment the limits of the world market itself become too narrow for the full unfolding of all the resources of modern industry, when the latter requires a social revolution to regain free scope for its energies-from this moment on the limitation of labour time is no longer reactionary, it is no longer a brake on industry. On the contrary, it will he introduced quite of its own accord. The first consequence of the proletarian revolution in England will be the centralisation of large-scale industry in the hands of the state, that is, the ruling proletariat, and with the centralisation of industry all the conditions of competition, which nowadays bring the regulation of labour time into conflict with the progress of industry, fall away."

Engels worked quite closely with Marx, here is his wiki entry:

http://en.wikipedia.org/wiki/Friedrich_Engels

[Miguel Madeira]

"Yes there are a (small) number of teams that are supporter owned."

I suspect that, at least in Western Europe, supporte owned sports teams are, if not the majority, at least a susbstancial minority (in Portugal, I think that all first league teams are supporter-owned - even in the teams that have shares in the stock market, supporters are organized in a "club" that owns at least 51% of the shares).

[Paul Walker]

Chris. As to 1) you get partnership of lawyers and doctors but not partnerships of doctors and lawyers. Also partnerships can deal with the problem of different productivities leading to different incomes - most cooperatives involve (roughly) equal payments since team production makes observing individual productivities difficult, if not impossible - since you keep the income from people who come to see you, I keep income from those who come to see me. By some definitions of worker cooperatives partnerships are not cooperatives. 2) I'm sure there are lots of things political parties don't consider that may be they should. In this case I'm hoping its because they have read my paper!!!! Well ....... may be not. :-( 3) I agree, lots of dumber ideas get support from political parties often.

[Boffy]

"The first consequence of the proletarian revolution in England will be the centralisation of large-scale industry in the hands of the state, that is, the ruling proletariat, and with the centralisation of industry all the conditions of competition, which nowadays bring the regulation of labour time into conflict with the progress of industry, fall away."

Quite right AFTER, the proletarian revolution, not prior to it when the capitalists still own and control that state. Lenin had to explain that difference to menshevik reformists who didn't understand it in relation to the question of defencism.

Engels opposed calls for nationalisation by the capitalist state, and opposed things such as welfarism by the capitalist state. In his Critique of the Erfurt Programme programme in opposing such calls he points out that they contradict their opposition to al "state Socialism". He earlier wrote that the most advanced workers in Germany were those demanding that state property be taken out of its hands and transferred to their direct control.

Even after the proletarian revolution, Engels saw the state acting only as a form of holding company, just as he and Marx had argue for all co-operatives to be part of a national co-op federation to prevent individual co-ops being sold off. Engels writes,

"as demanded by the Paris Commune, the workers should operate the factories shut down by the factory-owners on a cooperative basis. That is the great difference. And Marx and I never doubted that in the transition to the full communist economy we will have to use the cooperative system as an intermediate stage on a large scale. It must only be so organised that society, initially the state, retains the ownership of the means of production so that the private interests of the cooperative vis-a-vis society as a whole cannot establish themselves.”

[Boffy]

We should also remember that Marx and Engels believed that the "semi-state" established after the revolution would immediately begin to wither away, so to associate such a legal ownership of the means of production to prevent it being sold off in individual cases, with demands for nationalisation today, are totally off the mark.

[ChrisA]

Again we have the equivalent of the West Lothian question on worker cooperatives. If they are the most efficient form of organisation, why are they not out competing other forms of organised firms? Cooperatives are not illegal in the UK, nor in most countries of the world. But almost all the major companies in the world, new and old, developed or undeveloped, are either privately owned or owned by limited liability shareholders. Only a very few partnerships still exist (like legal firms) where in reality most of the people are employees. Even Kibbutzes are now using employees.

I can suggest plenty of reasons why the limited liability company is so successful, but I really don't have to do that when the evidence is so overwhelming. Cooperatives must be less efficient.

Similarly if we accept the case that workers are more happy when they have more control over their workplace, then presumably people would accept lower pay to work at such locations. Then the evil capitalists would realise this, and then organise things so that they could pay people less. The reason that they generally don't do this must be that it is not a good idea, i.e. the reduction in wages that people are willing to take is not enough to offset the loss in productivity by giving them more autonomy. In fact this is exactly what you would predict, they don't call it compensation for nothing you know.

[Boffy]

The evidence shows otherwise. Worker owned companies have always been more profitable than "privately" owned companies. Marx details the extent of that in relation to Lancashire textile co-ops, despite them facing higher interest rates etc.

James Connolly detailed it in relation to the Ralahine Co-op, and Kautsky gave many more examples, quoted by Lenin. But, today worker owned companies outperformed the FTSE 100 companies by more than 10%, and that happens pretty much every year.

Moreover, the number of Co-ops globally keeps growing with an added spurt approximately every 20 years. Co-ops now employ more people than do multinational corporations, and in many economies they dominate at least one sector of production.

The argument that Co-ops have not immediately become the dominant form of company means nothing. Capitalist production began in the 15th century. It took 400 years before it became the dominant form of production. Up to then guild and feudal production continued to dominate.

In the Mediterranean city states, capitalist production was actually killed off at birth because merchant capitalists sucked so much surplus value out of it.

The argument on pay is a bit bizarre, because in a worker owned firm, the worker can both obtain higher wages from the greater productivity, and because the firm does not have to pay out profits to capitalist owners. The fact that the workers of such a firm COULD take lower wages, because of their contentment, is absolutely no reason why they would do so!

[Paul Walker]

Boffy.

Can you give the reference for the size of employment for worker coops. I notice that the US Federation of Worker Cooperatives states,

"Though we lack comprehensive data on the nature and scope of worker cooperatives in the U.S., researchers and practitioners conservatively estimate that there are over 350 democratic workplaces in the United States, employing over 5,000 people and generating over $500 million in annual revenues."

5000 people is not a lot in an economy the size of the US.

[Simon]

No Such thing as Marxism as "If anything is certain, it is that I myself am not a Marxist." ~ Karl Marx. Capital as a Social Relation: In order for capital to exist within capitalism, there must be a working class producing goods, part of the value of which is withheld from them and used in accordance with the requirements of the further accumulation of capital. Since the interests of capital and worker are different, the existence of capital requires that the workforce be controlled. In order for capital to exist and expand, labour, the only creator of capital, must be prepared to part with some of its fruits, i.e. allow them to be expropriated & controlled by (the interests of) capital.

[Simon]

follow me on @SCANDOY

[Boffy]

Paul,

The information was from Co-op Facts, provided by . They don't seem to have that specific bit of data any more, but lots more data there.

I obtained the figure from there a few years ago, now, but a look at the numbers can easily provide the comparison.

[Boffy]

The International Co-op Alliance

[Boffy]

http://ica.coop/en/whats-co-op/co-operative-facts-figures

[Boffy]

According to that data, the figure for the US is 30,000 co-ops, and 2 million jobs.

The united steelworkers, which is the biggest US union a year or so ago, also signed a deal with the Mondragon Co-ops to establish Co-ops across North America, especially where jobs were at risk. They have also developed a new working arrangement for trade union organisation within Co-ops.

in the past, TU bureaucrats have been hostile to Co-ops, and there is some evidence of actual attempts to sabotage them, because worker ownership and control threatens the mediating role of the bureaucrats.

[Paul Walker]

Thanks Boffy. Interesting looking site. Their numbers look to be about all forms of coops not just worker coops.

[Boffy]

Paul,

On my blog I have links to a range of global co-ops, including the UK Worker Co-op site.

I also have an index of posts on Co-ops, including a very long one done several years ago, which I will probably turn into a book, plus another on the Economics of Co-operation, that you may find interesting.

[Boffy]

Paul,

Actually the link to UK Worker Co-operatives, and another to the Power of Cooperation are on my blogroll not the Co-op Index.

[Paul Walker]

Boffy. Have bookmarked your page. Thanks.