Interview with Noted Economist, Richard Wolff: Part Three

They decide what to produce, how to produce and what to do with the profits. All of the other employees live with the results of those decisions, but have no voice in them. That’s the opposite of democracy.

It is a strange country that proclaims its commitment to democracy when it does not allow the enterprises where most adults spend most of their lives, to be organized democratically. If democracy is a value we hold dear, then that’s where it ought to have begun, let alone the place where it is absent. We all go to work in a place where we don’t make the basic decisions; the board of directors does, and that’s not democracy.

Let me explain why that would be a solution and let me give you a short list. Suppose the workers were their own board of directors. Once a week, instead of performing a particular task, they all got together in meetings debating all day the answers to the following questions: ‘What do we produce? How do we produce? Where do we produce? And what do we do with the profits?’ Here are some outcomes that would be very different from what we have in capitalism.

Do you think these workers would vote to close their enterprise and move to China? They wouldn’t. Suppose there was a new technology that would make more profits for the company, but had the following side-effects: deafening noise, air pollution and water pollution. The board of directors and the major shareholders – say in a big city like Chicago or New York – might be clearly tempted to make the technology available, because they don’t have to live with those conditions. They collect the profits from that technology, the workers don’t. So they will install that technology and the workers will have to live with the consequences as best they can. If the workers themselves made the decision on which technology to use, they would have to weigh the gain and profit on one hand, and what it would do to their health, the health of [those] who live nearby on the other. They would come up with a systematically different pattern of decisions, because their criteria for reaching the decisions are different from the criteria that apply in a capitalist system.

Here comes the final example, think of the corporation’s decisions about how much money to pay out in dividends to shareholders [and] top executives. If that were determined by the workers who vote democratically, do you think they would pay out fortunes to the shareholders? Do you think they would pay out tens of millions of dollars in pay packages to the top executives, while the average worker can’t afford to send his kid to college? I think the distribution of profits would be much more equally spread among the population. Sure, some would get more or less by some criteria that were democratically decided on, but you wouldn’t have the extraordinary and extreme inequality whose major cause is how the profits of enterprise are distributed in our society.

The democratization of our enterprises would be the best step we could take to significantly reducing the level of inequality in our society. If we change the system from a capitalist, top-down, hierarchical organization of business to a cooperative democratization of the organization of business, we would see less flight of our businesses abroad, see an advance in environmentally friendly work situations, and finally we would see less inequality of income. Those alone are powerful reasons to allow a serious exploration in this country of an alternative to capitalism.