Democracy at Work: A Cure for Capitalism Review

I read Democracy at Work: A Cure for Capitalism by Richard Wolff some time back in 2015-2017. Shortly after I finished reading it, I wrote the following brief review (really just some of my thoughts on the book), which I will re-post here now, 10 years later. It was one of the first “modern” leftist works I’d read (ie. written by someone currently alive), and I found it to be insightful.

The "review":

Wolff uses the book to critique capitalism where resources are privately owned and distribution of resources is based on markets (what most consider to be traditional capitalism), and state run capitalism where resources are owned by the state and distribution of resources is based on central planning (what most consider to be the socialism that we have seen practiced in various “socialist” states throughout the last century). He often references the Great Depression of the late 1920’s and 1930’s, as well as FDR’s response to that crisis, but the primary event he refers to as evidence of the failure of market capitalism is the economic depression of 2007. He also points to the eventual fall and transition to market capitalism in the vast majority of state-run capitalist countries throughout the last century, and discusses the various points that lead to their downfall. He also proposes his own alternative system, what he called workers’ self-directed enterprises (WSDEs), which could replace market capitalism and state-run capitalism.

The book is divided into three parts. In the first part, he describes the nature of market capitalism and state capitalism, and why he defines state capitalism to be different from true socialism. In the second section, he discusses the drawbacks behind these economic systems and their failures. In the third section, he discusses his own idea for WSDEs, including how they offer a solution for the drawbacks of capitalism, how they might function in modern society, and how to bring them about. The book itself is rather concise and so serves as a very handy reference book, so it will not be worthwhile for me to summarize too much of it here, but I will very briefly write some of the key points of the book.

The key aspect of capitalism (market or state) from which virtually all of its problems arise is the fact that workers for a corporation produce some amount of wealth or product that is then appropriated by a totally different set of people (corporate executives/company shareholders or state bureaucrats, for example) not involved in putting in the work to produce that product. When that product is sold (whether that product is an actual physical product or a service), it will create some amount of money for that corporation, some of which will be paid back to the workers as their income, and the rest of which (the surplus) will be used by the company executives or state bureaucrats as they see fit. The fact that the surplus is appropriated for use by a group of people that never had to bear the cost of the production of that surplus is where the fundamental evil of capitalism lies. It allows for those executives or bureaucrats to augment their own wealth disproportionately, and use their own personal wealth to buy more political influence and a higher quality of life than the average worker can even imagine. The average worker is then further dispossessed from the political system due to the fact that they do not have the influence to better their own situation or even organize into groups with meaningful power to challenge the political control of the wealthy. Additionally, because market capitalism pits corporations against each other, executives can exploit the workers and environment to more cheaply produce a product and increase their surplus, all without having to bear the human and environmental cost of that increased surplus, in order to try to get an edge over their competitors. This level of inequality is not quite as drastic in state-run capitalism, and in theory, centrally planned economies can explicitly aim to reduce inequality, but the fact that the surplus is still appropriated by a group of people that are not involved in producing it leads to dispossessed and apathetic workers. This is also why whenever economic conditions become difficult in state-run capitalist economies, there is always a clamor for a switch to a different economic system, partially because the average worker does not feel motivated to defend the state-run capitalism despite the fact that it still results in less inequality than market capitalism. This leads to a regression from what was considered to be “socialism”, and rolls back the hard-won gains by socialist revolutionaries all over the world during the last century. At its core, capitalism cannot be moral and will always result in exploitation of the workers, the environment, increased income inequality, and increased political inequality. What we have now are countries that are democracies in name only, as we repeatedly see the election of the wealthy and politicians who only look out for the interests of the wealthy. No amount of governmental regulation will change the core characteristics of a capitalist system, and indeed, the wealthy will always have too much control over the government to allow unwanted regulation of their activities.

The principal idea behind WSDEs is that corporations would be organized in a manner where there is no group of executives appropriating the surplus, and rather every single member of the corporation would have an equal decision on how the surplus is spent. Workers would be periodically rotated throughout various positions within the corporation to increase the diversity of their workplace knowledge and experience, and keep their lives from becoming so monotonous. Income inequality will decrease as it is highly unlikely that individuals would vote for others to receive disproportionately more of the surplus. The products that the company produces can then be distributed to the consumer in either a market economy or a centrally planned economy, it was not really within the scope of the book to delve too deeply in whether or not one method was better than the other. The role of the government then, would be more to ensure that safety nets are in place for WSDEs that go out of business, and to receive whatever portions of the surplus the WSDEs saw fit to give the government for maintenance of international relations, the military, and national infrastructure. In this way, you end up with a group of workers who are more motivated, and have the financial and educational means to be involved in politics. A true democracy could thus be achieved.