Economic Update with Richard D. Wolff

Episode: Socialism and Worker Co-ops
Date: July 18, 2019

Overview

In this episode, host Richard D. Wolff examines the evolving relationship between modern socialism and the movement for worker cooperatives (co-ops). He explores how socialism’s recent self-criticism has led to a renewed focus on democratizing the workplace and how worker co-ops offer a practical route toward that goal. Wolff contrasts this evolution with the stagnancy and self-protectionism of global capitalism, discusses American socialist history, and outlines the transformative power of workplace democracy within both economic and political systems.

Key Discussion Points & Insights

1. Self-Criticism and Transformation in Socialism

(00:10–09:00)

• Socialism’s Healthy Self-Examination:
  Wolff emphasizes that socialism, unlike capitalism, has actively engaged in decades of self-critique and change, especially identifying its tendency to centralize power in the state as a significant flaw.

  "Socialism has been going through, particularly over the last 30 to 40 years, an intense period of self criticism and transformation. And that's as it should be... a healthy system is one that questions itself and changes itself when it finds flaws, failures and so forth." – Richard Wolff (01:10)

• Capitalism's Resistance to Critique:
  In contrast, contemporary champions of capitalism, across party lines, tend to deny flaws and scapegoat external actors (e.g., immigrants, foreign nations), refusing substantive self-examination.

  "The Trump administration, the Republican Party, and a good bit of the Democratic Party too, currently act as though capitalism is the greatest thing since sliced bread." – Richard Wolff (02:10)

2. The Limits of 20th Century Socialism

(04:00–15:00)

• Traditional Focus: Ownership and Markets:
  Socialism historically addressed problems of concentrated ownership and the bias of markets by advocating for state ownership and central planning.

• Achievements and Setbacks:
  While 20th-century socialism (e.g., Soviet Union and China) achieved rapid economic growth, it also centralized too much power in the state, hindering civil liberties and workplace transformation.

  "The problem turned out to be, not that this didn't help economic development... but it put way too much Power in the hands of the government. And that had bad consequences as socialists are the first to understand and agree, having lived through it." – Richard Wolff (10:23)

• The Unchanged Workplace:
  Wolff argues that the missing piece has been the failure to democratize daily work life—the factory, the office, the store—which allowed old hierarchical habits to persist and potentially undo higher-level reforms.

  "What they didn't do was transform the workplace... If you don't transform the workplace, wow. You may set in motion a conflict, a contradiction between the big changes you've made in property and markets and the unchanged workplace." – Richard Wolff (12:00)

3. Worker Co-ops: Democracy at Work

(15:00–23:00)

• Happy Hour Anecdote:
  Wolff humorously points out the concept of “Happy Hour” representing how most workers see work as “unhappy hours,” directly connecting this to the lack of democracy and autonomy at work.

  "In capitalism, they pass by a local drinking establishment... in big letters, they read the following: 'Happy Hour.' Why would they call it that? Well, my guess is it has a lot to do with underscoring that what you just finished your work time were unhappy hours." – Richard Wolff (15:31)

• Worker Co-ops Defined:
  A worker co-op is described as a model where all employees have a democratic say in workplace decisions—a fulfillment of “democracy where it matters most.”

  "That's right, to install democracy in the workplace where it has been excluded for the entire history of capitalism." – Richard Wolff (17:00)

• Mondragon Corporation Example:
  Citing Mondragon in Spain—with over 250 co-ops and being the 7th-largest corporation in Spain—Wolff demonstrates real-world proof of scalable, democratic business.

  "Mondragon is a family of about 250 worker co ops all run democratically... It's the seventh largest corporation in all of Spain." – Richard Wolff (20:00)

4. Practical and Political Significance of Worker Co-ops

(23:00–34:00)

• Immediate Impact:
  Worker co-ops make socialism tangible to people’s daily lives—shifting their position from mere task-doers to workplace decision-makers.

  "Transforming your workplace... into a place where you are part of the decision making apparatus, where you participate in designing and directing and not just performing like a trained seal. This is something that will transform people's lives." – Richard Wolff (23:35)

• Strengthening Democracy:
  Political democracy is undermined when wealth and productive power stay concentrated. Co-ops democratize economic power at the base level, making true democracy possible.

  "If you want the economy to work for the people, you got to put them in charge. If you want democracy to be genuine... they have to be in charge of the economy. Otherwise the minority... will also pervert the democracy." – Richard Wolff (25:20)

• Countering ‘Statism’ Critique:
  Emphasizes that focusing on worker co-ops, not just state ownership, helps answer critics who equate socialism solely with big government.

  "It's a way of defining socialism that has to do with people's immediate work lives and has nothing to do with the state." – Richard Wolff (27:45)

5. U.S. Socialist History and Co-op Potential

(28:00–34:30)

• Historical Roots:
  Early 20th-century socialist and progressive candidates (Eugene Debs, Robert La Follette) garnered significant votes, showing socialism’s popularity before capitalist backlash.

  • 1916: Allan Benson, 600,000 votes (3%)
  • 1920: Eugene Debs, 900,000 votes (4%)
  • 1924: Robert La Follette (Progressive), 5 million votes (17%)

  "The notion that socialism is somehow unable to find a footing in the United States is false. It has in the past." – Richard Wolff (30:10)

• Lessons for Today:
  Wolff suggests a future socialist movement rooted in worker co-ops can overcome “statist” stereotypes and build a more resilient, popular base.

6. Worker Co-ops and Political Power

(34:30–40:00)

• A Symbiotic Model:
  Envisions a U.S. socialist party whose local base is made up of worker co-ops—much as capitalists undergird current major parties.

  "Imagine a political party... that advocated a transition from capitalist enterprises to worker co ops... the worker co ops would be the local basis for support for the socialist party." – Richard Wolff (36:24)

• Policy Example: ‘Right of First Refusal’:
  Inspired by UK Labour’s proposals, Wolff argues for a U.S. law granting workers an opportunity (and state support/loans) to buy their companies and form co-ops before any major ownership changes.

7. Co-ops and Innovation

(40:00–44:00)

• Dispelling Myths of Capitalism’s Superiority:
  Wolff shares the story of Silicon Valley engineers leaving high-paid corporate jobs to form small, creative, democratic teams—essentially worker co-ops—that drive technological breakthroughs.

  "They want to be creative... And they can't be in a capitalist corporation. So here's what they do. They take their laptops and they leave... and they get together in a group... It's a democratic workplace. Wow. That's where the creativity blossoms." – Richard Wolff (42:00)

• Conclusion:
  The supposed “innovation” of capitalism is frequently produced in democratically organized workplaces—the worker co-op model—even if informally.

Notable Quotes & Memorable Moments

• On Democratic Workplaces:

  "If you don't have democracy at the workplace, you don't have it where most adults spend most of their lives and therefore you are not a democratic society." – Richard Wolff (17:05)

• On American Socialist History:

  "The last century has been an unremitting attack on everything having to do with socialism. Because if you hadn't done that, what those elections... showed is that socialism finds indeed a fertile soil in the United States." – Richard Wolff (31:22)

• On the withering of the state:

  "Vladimir Lenin... coined the phrase 'the withering away of the state' which he advocated." – Richard Wolff (33:45)

Timestamps for Important Segments

• 00:10–04:00 — Episode introduction; socialism’s transformation vs. stagnant capitalism
• 04:00–15:00 — Socialism’s traditional remedies and limitations
• 15:00–23:00 — Importance of democratizing the workplace; what are worker co-ops
• 23:00–27:45 — Worker co-ops as the base for real democracy
• 28:00–34:30 — American socialism’s historical momentum
• 34:30–40:00 — The potential alliance between a socialist party and worker co-ops
• 40:00–44:00 — Worker co-ops and true innovation; conclusion

Final Thoughts

Wolff’s episode delivers a compelling argument for why 21st-century socialism must involve democratizing the workplace through worker co-ops. He peels away misconceptions about both socialism and capitalism, highlighting that workplace democracy is essential for genuine freedom, innovation, and societal well-being.