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This is new territory. There is abundant evidence that workers can organize workplace production, but have little experience in democratically developing broader social plans that can also incorporate enough workplace autonomy to make worker self-management meaningful.
How far this can go within capitalism shouldn’t be exaggerated, but testing it does seem fruitful for developing the economic skills, institutional abilities, and political links — as well as highlighting the many unresolved problems — essential for moving on to more ambitious interventions.
A particularly significant blind spot for the workplace-control movement has been public-sector workers — especially considering that their unions are essentially the last bastion of trade unionism. In Wolff’s case, this oversight seems to follow from his minimal interest in “non-productive” workers.
But the broader reason for the neglect lies in the absurdity of applying segmented worker ownership to the public sector; it doesn’t seem especially worthwhile to think about workers in the tax department or welfare department “owning” tax collection or the distribution of food stamps.
Yet if the transformation of the state is paramount, then the role of public-sector workers is also crucial. At worst, ignoring it may lead to workers — concerned with their sectional interests — becoming a damaging obstacle to the state’s democratization. But at best, it could seriously broach the issue of moving us to a different kind of state.
In the past, some public-sector workers have tentatively forged alliances with clients as part of an effort to protect their jobs and enhance their bargaining position. Could this defensive tactic be extended to institutionalize new worker-client relationships directly within the state — e.g., setting up worker-client councils inside the welfare department to address problems with welfare provision; establishing teacher-parent councils to restructure the school system; and forming similar councils for health care, housing, transportation?
Thinking through these questions of politicization — whether it means rethinking industries, workers’ relationship to the state, or workers’ role within the state — makes it possible to conceive of the project of self-management as not bypassing unions but perhaps even fostering the conditions for their revival.
To what extent does the revivification of unions and the re-emergence of struggle among their members lie in developing a broader class sensibility that links common frustrations to the need for larger workplace and community class solidarities that can challenge what is produced, how, and for whom — questions basic to the question of self-management?
wow. lots to think about re: workers at tech companies "seizing" the means of production
There is no quick fix for the Left’s impasse. The attempt to revive ideas of self-management are admirable in that they highlight the fundamental importance of challenging private property.
But the project’s dominant populism underestimates the limits of doing so within capitalism and overlooks the fundamental necessity of comprehensively challenging and overturning existing property relations — which cannot happen without developing the class cohesion and institutional capacity to confront the capitalist state.
The result is the worst of all worlds: while self-management is confined to the fringes, the dominant corporations continue on their merry way; the hated state is ignored and left to continue hammering us; there are occasional outbursts that absorb energy but leave little of substance behind; the working class, for all its potentials as an actor, stumbles aimlessly on.
Until the discussion is politicized such that it can go beyond a (legitimate) critique of statism, and begin to see the democratic transformation of the state as part and parcel of economic democratization — and the development of the class capacities to address this is made a priority — this “next big idea” will only be the Left’s latest failure.
christ this is good
The term financialization is used all over the place, but it’s usually defined in a pretty circular way: financialization means “more finance,” more things controlled by finance.
Our way of thinking about it starts from the idea that the logic of the market doesn’t enforce itself — the logic of the market has to be enforced. And one way of looking at the role of finance is that it enforces the logic of the market and ensures that a whole range of decisions that could potentially be made in many different ways in fact end up being made according to the logic of commodities and of accumulation. Here we’ve been inspired by the economists Gérard Duménil and Dominique Lévy, among others.
So, the most obvious case we highlight is the corporation. On one level, we think of the corporation as a typical organizational form of modern capitalism. But in another sense it’s simply a body of people with some sort of hierarchy and defined roles, engaged in some kind of productive process.
It’s not inherently engaged in producing commodities for profit. And if we go back to the prehistory of the corporation, the corporation was just a legally chartered body that carried out some kind of function. It got appropriated as an organizational form for capitalism specifically, but it didn’t start out as that.
The other side of the coin is that there’s a long tradition of thinkers, including Galbraith, Keynes, Veblen, and many others, who saw a natural, or at least possible, evolution of the corporation into the basis of some kind of planning or collective organization of production —that it could easily cease to be oriented toward the needs of profit maximization.
So if you think that type of evolution is possible, then you ask, why hasn’t it happened? I would argue that the answer is that somebody stopped it from happening — that there are people in society whose job it is to prevent that from happening. There are people and institutions whose job it is to ensure that corporations remain within capitalist logic, that they remain oriented towards production for sale and for profit. On some level, this is the fundamental role of shareholders and their advocates, and of institutions like private equity.
In some ways it’s even clearer when you look at finance in relation to states, because with states there’s no presumption that they should be guided by a logic of profitability or commodity production at all. So, the role of finance in enforcing a certain kind of policy on the state, a certain kind of logic, a certain kind of organization – whether it’s the bond market or whoever else we imagine here — is even more clear-cut.
The other thing we wanted to push against is the flip side of that notion, which is the idea of finance as a distinct social actor with a distinct set of interests – that we can talk about finance capital as if it had its own material interests distinct , or opposed to, industrial capital or capital in general.
That just doesn’t seem to fit the sociology of the system we live under, where there’s obviously a lot of back and forth between these groups. In general, the wealth that takes the form of claims on productive enterprises also takes the form of financial assets. There’s not a distinct group of people or entities who you would call industrial capital as opposed to finance capital.
Again, this functional view of finance, as the enforcement arm of the capitalist class as a whole, seems more productive.
"the enforcement arm of the capitalist class as a whole" i like that
We cite a nice paper by José Azar where he reports that in 1999 less than 20 percent of firms in the S&P 1500 had a substantial shareholder in common, a shareholder that owned 5 percent of more of their stock. In other words, if you randomly picked any two publicly traded corporations, it was relatively unlikely — a one in five chance — that they had a large shareholder in common.
By 2014, the proportion had reached 90 percent. In other words, almost every corporation shares large shareholders with other large corporations.
[...]
[...] It’s not that there’s been a huge change in the distribution of the ultimate wealth owners, but the actual stocks are owned by a relatively small number of financial vehicles that then, in turn, are owned by a widely dispersed group of people.
But as Azar and others have pointed out, from a shareholder-value perspective, that really changes the logic of profit maximization. If each firm has a different set of shareholders, “maximizing profits for the shareholders” is basically the same as “maximizing profits for the firm.” But when you have the same shareholders across all these different firms, those two objectives are quite different.
[...]
If you’re a shareholder who owns all of the major airlines, you want them to just divvy up market share in a stable way. The last thing you want is to see them all competing and offering fare cuts that are just going to the customers and not to you.
[...]
If you take competition out of the mix, it’s unclear what function private ownership is supposed to accomplish. If the evolution of finance gets you to a situation where you have a single set of institutions — or in the long run, maybe a single institution — that owns all of these firms, then pressure from shareholders is going to be against competition. They don’t want to see these firms trying to gain market share or anything else at each other’s expense.
really fascinating stuff - he's basically saying that because ownership is more dispersed (mediated by huge index funds and the like), then shareholders end up owning lots of shares in firms that are competitors. in that case, "ruinous competition" ends up benefiting customers and NOT shareholders overall, so that changes the dynamics of profit maximisation
Seth Ackerman follows up with:
It’s hard to listen to what you just said without thinking of the debates that took place in the late nineteenth and early twentieth centuries, where many people — arguably including Marx — predicted either that firms would be consolidated into the hand of a very small number of controllers or that the underlying wealth would be concentrated into the hands of fewer and fewer people. And in either case, it would undermine the basic logic that made capitalism an economically and politically successful system in the first place.
But in the real world, the constraint the market imposes on you is that you can’t spend more today than the money available to you today. Which, in the most extreme form, means that the income you’ve collected in the past is the hard limit on how much you can spend today. That’s the ultimate form of market discipline and, in that sense, the whole function of finance is to remove that discipline — to allow spending today based on future income that hasn’t yet been received, and may not be received.
In a fundamental sense, the reason we have finance is to allow money-losing enterprises to operate. The money-losing enterprises are the ones whose current activities don’t fully pay for themselves, which is why they need to raise finances in the first place. That’s what it means, in a cash-flow sense, to be carrying out investment: you’re carrying out activities which, in the current period, don’t pay for themselves. You believe, you hope, that they will pay for themselves in the future, but at the moment they don’t.
The purpose of finance is to allow that to happen, to allow people’s beliefs and hopes about the future to take precedence over the actual results that have been achieved in the present. But then, on the other hand, the judgment of finance is supposed to be enforcing market discipline, even on actors who otherwise might not be subject to it — like states, and, potentially, large corporations whose existing profits are already more than they need to maintain themselves and achieve their desired level of growth.
ahhh i really like this
[...] if you can’t conceive of social life organized in any terms except commodities, if you can’t conceive of any right that isn’t a property right, if you can’t conceive of any sort of goal or organizing principle of collective productive activity except maximizing profit or some kind of stand-in for profit, then the term neoliberalism isn’t going to make much sense to you. Because the extension of market logic can’t be parsed by someone with a worldview where everything is already organized as markets or might as well be.
I suppose you could say that neoliberalism is broader than financialization in the sense that the growth of finance is about enforcement of market logic on other domains of human activity. But it’s not the only instrument for that. You can imagine and you can point to other methods of enforcing that logic that don’t really consist of anything you would call financial institutions or the development of financial markets or anything like that.
this is excellent
(Seth later describes neoliberalism as the ensemble of the responses/adjustments as market logic is insidiously imposed on more domains of society)
Today, the dominant discourse governing discussion of markets, states, and companies is neoliberalism, and Mackey’s free-market business model and historical narrative fit neatly within this framework. In this vision, the economic sphere is “an autonomous, self-adjusting, and self-regulated system that [can] achieve a natural equilibrium spontaneously and produce increased wealth.”
But the free-market historical narrative lacks empirical weight. As economic historian Karl Polanyi argued decades ago, capitalist markets are a product of state engineering, not nature.
The history of industrial development in the United States, often considered the epicenter of free markets, demonstrates the political nature of markets. The history of market formation in the United States reveals an industrial structure supplied by goods and capital extracted from slave labor and facilitated through a state-sponsored, genocidal land grab.
Far-reaching government legislation protected domestic markets and infant industries from external competition, and federal and state governments played a central role in the development of physical infrastructure (canals, railways, telegraphy) and the creation of huge bodies of agricultural and industrial knowledge — all essential elements in the genesis of American industrial capitalism.
At the same time, society’s greatest inventions and innovations of the past two hundred years — rockets to the moon, penicillin, computers, the Internet — were not bestowed upon us by lone entrepreneurs and firms operating in free markets under conditions of healthy competition. They were the work of institutions: CERN and the Department of Defense created the Internet, while Bell Labs — a subdivision of AT&T, freed from market competition by federally granted monopoly rights — generated transistors, radar, information theory, “quality control,” and dozens of other innovations central to our epoch.
Designating the market as natural and the state as unnatural is a convenient fiction for those wedded to the status quo. It makes the current distribution of power, wealth, and resources seem natural and thus inevitable and uncontestable.
But of course this isn’t true. States shape, sustain, and often create, markets, including neoliberal markets. The complexion of those markets depends on the balance of class forces at any given point in time. Capitalist markets, and the inequality and degradation they engender, are a political creation not a product of nature. Nature and society (and states and markets) are inseparable — simultaneously produced by humans through ideological, political, and economic processes.
Understanding this enables us to challenge the dominant idea of natural, free markets and the emancipatory potential of the firm promised by Mackey.
very simple point but worth remembering
It is, then, increasingly clear that Facebook is far from a neutral space in which users’ timelines are organically shaped by their networked interactions. Facebook is a publisher; it’s just a giant monopolistic one, driven at base by market incentives. As Zeynep Tufekci puts it, at its core, the tech giant’s “business is mundane: They’re ad brokers.” Indeed, as liberals focus the debate on user privacy and data harvesting they obscure the capitalist logics driving these practices, and what the alternatives might look like when data and global connectivity are free from private control.
It is spurious to respond to legitimate criticisms of Facebook by saying we can simply opt out if we don’t like it, or, like the Adam Smith Institute claims, that what Corbyn is saying amounts to a call to waste public money on building a “knockoff” alternative. Precisely Facebook’s biggest strength (also for users) is its critical mass; we use it because “everyone” is there and because we don’t want to — and in some cases, can’t afford to – “miss out.” Facebook functions as a public utility by sharing a mass of information and connecting as many users as possible. Its critical mass makes it a natural monopoly and that alone is bound to undermine users’ freedom of choice. But far from it thereby simply serving a public interest, it is governed by a business model centered on advertising, decisive to everything we see and do on the platform. [...]