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The Socialized Firm

Post by Rebel Redneck 59 on Sun Aug 07, 2011 4:38 am

I have been sitting around and theorizing for a bit: So I thought I might as well write down my thoughts and perhaps get some feedback.


Now then, as many of you know, my views regarding the ownership of the means of production and distribution are fairly simple. I believe the means of mass production and distribution should be owned by Worker Cooperatives and the means of small production and distribution should be owned by Individuals. However, this night as I was sitting around just thinking to myself about how a future Socialist economy would look like, I came into a little snag: How would the means of production and distribution, that dont require many workers to function but are beyond the handling capacity of an Individual, be operated in a future Socialist economy? Say a medium sized convenience store. It wouldnt require many people in order to operate however it would be difficult ( if not impossible) for a single individual to operate it. Therefore it would require a small group of people in order to function well. I know many of you are going to say " A Cooperative should own and operate it" but I think I have come up with a simpler idea. Now it may not be workable ( heck it might not even be original) but I just want to put it out there and see how it holds up in the light of feasibility. So here it is:

The Idea of a Socialized Firm:

1. More than one person works at the firm but only one of them owns it.
2. The owner is required by law to take part in the work that takes place at the firm.
3. Everyone ( including the owner) receives pay relative to the amount of work they put in. Therefore the owner would not earn most of the money simply due to the fact that he or she owns the firm.

I know this is a very basic sketch but I think it looks good so far. It may be simpler to implement a plan like this for small and medium sized firms and, above all, it would not preserve what many call petit bourgeois capitalism since no one would be profiting from labor that they did not take part in ( since the owner would be required to work and would receive pay relative to the amount of work he or she put in, therefore it would be possible for a hard working employee to outearn the owner). Anyways criticize my ( possibly unoriginal) idea all you want, I only welcome constructive criticism, and Ill respond as quick as I can.
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Re: The Socialized Firm

Post by Rev Scare on Sun Aug 07, 2011 4:52 am

Interesting, but I do not understand how such a model functionally differs from a cooperative other than in the privately owned status of the firm, which is something that no capitalist (in this case, a private owner seeking surplus value) would willingly choose to adopt and would therefore avoid. If everybody were truly remunerated on the basis of performance, then, provided that you are not suggesting the retention of the devious neoclassical production function, all surplus generated would require that a democratic workers' system of allocation and distribution be administered in order to manage it fairly and effectively.

A privately owned business, in my view, is redundant (it is not in any way more efficient than an enterprise managed collectively by those who actually work in it) and serves as a potentially undermining presence. Such an organization needlessly and surreptitiously harbors the germ of capitalism.

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Re: The Socialized Firm

Post by Rebel Redneck 59 on Sun Aug 07, 2011 5:17 am

Rev Scare wrote:Interesting, but I do not understand how such a model functionally differs from a cooperative other than in the privately owned status of the firm, which is something that no capitalist (in this case, a private owner seeking surplus value) would willingly choose to adopt and would therefore avoid. If everybody were truly remunerated on the basis of performance, then, provided that you are not suggesting the retention of the devious neoclassical production function, all surplus generated would require that a democratic workers' system of allocation and distribution be administered in order to manage it fairly and effectively.

A privately owned business, in my view, is redundant (it is not in any way more efficient than an enterprise managed collectively by those who actually work in it) and serves as a potentially undermining presence. Such an organization needlessly and surreptitiously harbors the germ of capitalism.
Well your right that the only difference between such a firm and a cooperative is that it is privately owned. Im not quite sure what you mean by functional difference? Are you speaking of the way such a firm would operate day to day?

I must respectfully disagree with you on the issue of a private business being a potentially undermining presence. A craftshop that is owned and operated by a single individual is a private business. Is it exploitative? Not at all since no one is profiting from work they played no part in. That would be the same case with such a firm. The owner would have to play a part in the work taking place at the firm and would receive pay relative to the amount of work he or she put in.

Nonetheless you sort of brought up an interesting question: How would it be determined how much pay someone working at such a firm would receive ( according to the amount of work they put in) ? Now that is some food for thought.
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Re: The Socialized Firm

Post by Celtiberian on Sun Aug 07, 2011 3:03 pm

Given your example of medium sized convenience stores, I would definitely favor them being operated as labor-managed firms. However, I'm not necessarily averse to the notion of families owning small businesses, provided they're forbidden by law to employ wage laborers. Furthermore, should they require a start-up loan, they should also be required to pay back the loan to the state.

I must admit, I don't quite understand the rationale behind your idea. Very few people (if any) would actually want to own a business if they were unable to profit from the surplus value provided by the employment of wage laborers. I suppose maybe a few eccentric individuals would like the idea since it would enable them to design a business according their own personal preferences, for instance, but I can't imagine that being a high priority for many people.

Transcending the notion of owning means of production is extremely important for a socialist commonwealth, in my opinion. Continuing to foster the idea of owning property, beyond that of possessions for active personal use, is undesirable for a variety of reasons. Society should come to view work for what it is: a vital collective effort, which can also lead to certain desirable outcomes (i.e., self-realization) if structured in a fundamentally non-exploitative manner.

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Re: The Socialized Firm

Post by Pantheon Rising on Sun Aug 07, 2011 7:56 pm

I was actually suggested by Celt on Friday to make a thread on something very related to this to clear up some questions I had. I think my questions are very related to what Rebel Warrior 59 was saying.

Celt, you said little convenience stores should be run by labor managed firms. Why and how? What does a labor managed firm look like? Also, does the owner of the store still technically OWN the store? I am not opposed to private property entirely. What about say mom and pop's pizza shop? Why can't they OWN it, like I asked before? Surely we can still organize workers and give them more say while still retaining the rights to small time business property.

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Re: The Socialized Firm

Post by Rebel Redneck 59 on Sun Aug 07, 2011 8:49 pm

Celtiberian wrote:Given your example of medium sized convenience stores, I would definitely favor them being operated as labor-managed firms. However, I'm not necessarily averse to the notion of families owning small businesses, provided they're forbidden by law to employ wage laborers. Furthermore, should they require a start-up loan, they should also be required to pay back the loan to the state.

I must admit, I don't quite understand the rationale behind your idea. Very few people (if any) would actually want to own a business if they were unable to profit from the surplus value provided by the employment of wage laborers. I suppose maybe a few eccentric individuals would like the idea since it would enable them to design a business according their own personal preferences, for instance, but I can't imagine that being a high priority for many people.

Transcending the notion of owning means of production is extremely important for a socialist commonwealth, in my opinion. Continuing to foster the idea of owning property, beyond that of possessions for active personal use, is undesirable for a variety of reasons. Society should come to view work for what it is: a vital collective effort, which can also lead to certain desirable outcomes (i.e., self-realization) if structured in a fundamentally non-exploitative manner.
Well you see the rationale behind my idea is this: If Capitalism is abolished then there will be no more Capitalists. A lot of former Capitalists would have to find their place in a new Socialist economy. This idea would help ( what many call) to " integrate them into the Socialist mode of production". Such an arrangement would not be a revamped version of Capitalism since the owner of such a firm would have to work in the firm and would receive pay relative to the amount of work they put in. There would be no case of a person profiting off the work of others. Nonetheles my idea has a major flaw which is how would it be determined how much pay a person would receive relative to the amount of work they put in.

Im sorry for going off topic but may I ask what exactly do you mean by transcending the notion of owning means of production? That statement ( taken literally) sounds impossible to achieve in my view. Not to mention I dont see why it should be strived for. The means of production have been owned by individuals or groups ever since the human species came into existence. There is nothing unjust or exploitative about this fact ( in itself). The economic system you advocate would not transcend the notion of owning means of production. It would only replace private ownership of the means of production with collective ownership of the means of production.

That brings me to another thing. Private ownership of the means of production, in itself, is not unjust or exploitative . A person owning the smithy they work at is an example of private ownership of the means of production. Is that unjust or exploitative? Not at all. Private ownership of the means of production is only unjust and exploitative in a Capitalist economy. In a Socialist economy it is not. The form of Socialism I believe in ( and advocate) would have private and collective ownership exist side by side.

At any rate my point is I see nothing unjust or exploitative in a person employing others as long as they work alongside their employees and receive pay equivalent ( or at least relative) to the amount of work they put in . I think such a model could exist, to some extent, side by side with collective ownership and individual private ownership ( that is a single individual owning and working their mean of production). Of course my idea has a major flaw which is how would everyone receive pay equivalent or relative to the amount of work they put in under such an arrangement. Nonetheless I like this idea and its worthwhile to theorize about it.

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Re: The Socialized Firm

Post by Admin on Sun Aug 07, 2011 9:19 pm

SSocialistStateSS wrote:I was actually suggested by Celt on Friday to make a thread on something very related to this to clear up some questions I had. I think my questions are very related to what Rebel Warrior 59 was saying.

Celt, you said little convenience stores should be run by labor managed firms. Why and how? What does a labor managed firm look like? Also, does the owner of the store still technically OWN the store? I am not opposed to private property entirely. What about say mom and pop's pizza shop? Why can't they OWN it, like I asked before? Surely we can still organize workers and give them more say while still retaining the rights to small time business property.

The idea behind a socialist economy is the elimination of exploitation. Wage labor is inherently exploitative because it deprives workers of control over the surplus their labor produces. (As such, it doesn't matter if we're evoking the example of a major corporation or a 'mom and pop' pizza shop.) Private property is the codification of this exploitation and therefore must be abolished. Abolishing private property would mean that remuneration be based upon a democratic allocation of each enterprise's surplus. Of course, this would have no bearing upon self- or family-run businesses, because they are inherently non-exploitative (i.e. they do not utilize wage laborers).

So, in short, petit-bourgeois businesses would not be part of a socialist economy. No socialist should support the perpetuation of capitalism at any level. It's that simple.

Now, that doesn't mean that we harbor any particular animosity towards the petit-bourgeois. They are of little institutional relevance in advanced capitalist economies. However, maintaining private property, at any level, sets a dangerous precedent and violates fundamental socialist principles.

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Re: The Socialized Firm

Post by Rebel Redneck 59 on Sun Aug 07, 2011 10:08 pm

Admin wrote:The idea behind a socialist economy is the elimination of exploitation. Wage labor is inherently exploitative because it deprives workers of control over the surplus their labor produces. (As such, it doesn't matter if we're evoking the example of a major corporation or a 'mom and pop' pizza shop.) Private property is the codification of this exploitation and therefore must be abolished. Abolishing private property would mean that remuneration be based upon a democratic allocation of each enterprise's surplus. Of course, this would have no bearing upon self- or family-run businesses, because they are inherently non-exploitative (i.e. they do not utilize wage laborers).

So, in short, petit-bourgeois businesses would not be part of a socialist economy. No socialist should support the perpetuation of capitalism at any level. It's that simple.

Now, that doesn't mean that we harbor any particular animosity towards the petit-bourgeois. They are of little institutional relevance in advanced capitalist economies. However, maintaining private property, at any level, sets a dangerous precedent and violates fundamental socialist principles.
Private Property is simply property meant for private use. Self and Family run businesses are examples of Private Property are they not? Businesses of that sort are not meant for public use. Therefore they are Private. In fact the labor managed firms ( that you and I both support) are also examples of Private Property. After all only the members of such a labor managed firm would be allowed access to the firms property.

Public Property ( such as roads and streets) is necessary but so is Private Property. I repeat there is nothing unjust about Private Property in itself. A person who owns the land they work upon owns Private Property yet they exploit no one. Like I said earlier, even a labor managed firm ( cooperative , whatever you want to call it) is an expression of Private Property, since members of the public cannot use the means of production and/or distribution the firm owns. What is unjust is the fact that Private Property is concentrated in the hands of a minority ( aka the Capitalist class) while the majority is deprived of any ownership ( aka the Proletarian class). The aim of Socialism shouldnt be to abolish private property but to widely diffuse it in such a way that it benefits the Nation as a whole.

My proposal has nothing to do with what you call petit bourgeois capitalism. It is fundamentally Socialist.
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Re: The Socialized Firm

Post by Pantheon Rising on Sun Aug 07, 2011 10:58 pm

Admin wrote:The idea behind a socialist economy is the elimination of exploitation. Wage labor is inherently exploitative because it deprives workers of control over the surplus their labor produces. (As such, it doesn't matter if we're evoking the example of a major corporation or a 'mom and pop' pizza shop.) Private property is the codification of this exploitation and therefore must be abolished. Abolishing private property would mean that remuneration be based upon a democratic allocation of each enterprise's surplus. Of course, this would have no bearing upon self- or family-run businesses, because they are inherently non-exploitative (i.e. they do not utilize wage laborers).

So, in short, petit-bourgeois businesses would not be part of a socialist economy. No socialist should support the perpetuation of capitalism at any level. It's that simple.

Now, that doesn't mean that we harbor any particular animosity towards the petit-bourgeois. They are of little institutional relevance in advanced capitalist economies. However, maintaining private property, at any level, sets a dangerous precedent and violates fundamental socialist principles.

I understand what you mean. I don't think we should let the status quo with the petit-bourgeois go either, however is there really no other way we can do it? There is no other way to eliminate wage labor in small petit-bourgeois business other than taking away the business?

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Re: The Socialized Firm

Post by Rev Scare on Mon Aug 08, 2011 4:36 am

Rebel Warrior 59 wrote:A privately owned business, in my view, is redundant (it is not in any way more efficient than an enterprise managed collectively by those who actually work in it) and serves as a potentially undermining presence. Such an organization needlessly and surreptitiously harbors the germ of capitalism. Well your right that the only difference between such a firm and a cooperative is that it is privately owned. Im not quite sure what you mean by functional difference? Are you speaking of the way such a firm would operate day to day?

I do not grasp how your proposed firm differs from that of a workers' cooperative other than in being privately owned, which is something that would become a redundancy if the firm existed as a truly non-exploitative organization (and I find this to be dubious). Perhaps the actual day to day functioning of the firm would differ from that of a cooperative due to the innately authoritarian structure of your hypothetical business (rejecting democratic governance on the grounds of private ownership), but the surplus value created would be distributed amongst the workers in the absence of a wage for labor-time contract.

I must respectfully disagree with you on the issue of a private business being a potentially undermining presence. A craftshop that is owned and operated by a single individual is a private business. Is it exploitative? Not at all since no one is profiting from work they played no part in. That would be the same case with such a firm. The owner would have to play a part in the work taking place at the firm and would receive pay relative to the amount of work he or she put in.

We are here concerning ourselves with the concept of a privately owned business that hires additional, non-family employees, not with self-employed individuals. As far as the latter category is concerned, it presents no problem whatsoever because it is impossible to "exploit" yourself. If you voluntarily decide to establish an enterprise in order to work for yourself, then you are the immediate beneficiary of the fruits of your labor. The primary reason for my indisposition toward preserving private ownership of means of production is, as Celtiberian has already mentioned, due to the social necessity of such inputs and the collaborative nature of most meaningful human work. Private businesses, in my opinion, would continue to conserve and even promote the capitalist notion of inequality in what is in actuality a collective endeavor: the generation of the social product.

Nonetheless you sort of brought up an interesting question: How would it be determined how much pay someone working at such a firm would receive ( according to the amount of work they put in) ? Now that is some food for thought.

Well, due to the privately held status of such a firm, payment in exchange for labor power would either be decided by the owner (I find this to be exploitative) or, as I have suggested (this is why I questioned the fundamental difference between your idealized model and a cooperative), be decided democratically by all working participants. Whether or not compensation would be set according to some predetermined criteria designed by the owner (i.e., a technical measure of "productivity") or democratically decided by workers themselves following another method of distribution would be the prerogative of the enterprise, I suppose—it could also be enforced by the state.

In all honesty, I am opposed to remunerative policies that are determined by a narrowly defined standard of what constitutes "productivity" or some other intrinsically inequitable basis for reward. Work should be recompensed in accordance with effort, labor-time, and intensity, and this can only be achieved if all workers (indeed, all of society) are capable participants in the management of the company (and ultimately, the economy as a whole).


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Re: The Socialized Firm

Post by Admin on Mon Aug 08, 2011 5:26 am

Rebel Warrior 59 wrote: Private Property is simply property meant for private use. Self and Family run businesses are examples of Private Property are they not? Businesses of that sort are not meant for public use. Therefore they are Private. In fact the labor managed firms ( that you and I both support) are also examples of Private Property. After all only the members of such a labor managed firm would be allowed access to the firms property.

Public Property ( such as roads and streets) is necessary but so is Private Property. I repeat there is nothing unjust about Private Property in itself. A person who owns the land they work upon owns Private Property yet they exploit no one. Like I said earlier, even a labor managed firm ( cooperative , whatever you want to call it) is an expression of Private Property, since members of the public cannot use the means of production and/or distribution the firm owns. What is unjust is the fact that Private Property is concentrated in the hands of a minority ( aka the Capitalist class) while the majority is deprived of any ownership ( aka the Proletarian class). The aim of Socialism shouldnt be to abolish private property but to widely diffuse it in such a way that it benefits the Nation as a whole.

Well, you are getting into a question of semantics now. Private property, insofar as the previous context is concerned, is a legal construct within bourgeois states, wherein individual citizens are accorded ownership over the means of production within the functional parameters of the capitalist mode of production. The aforementioned construct enables the extraction of surplus via the utilization of wage labor. From the standpoint of revolutionary socialism, the idea is to modify the law, so as to prohibit this form of exploitation from transpiring. Hence, the means of production, in enterprises that necessitate collective participation, are themselves legally mandated to be collectively managed. Private property, (again) within the capitalist context, would thus be abolished.

Now, one could refer to labor-managed businesses as being 'private' enterprises, in the sense that they are not run by state bureaucracies, etc. At the same time, however, the status of the property (i.e. capital) itself may or may not be regarded as 'private'. The latter is entirely contingent upon the structure of the economy, the forms of regulations imposed upon businesses by the state, and how they are subsequently interpreted by society. For example, a socialist commonwealth could conceivably regard some forms of capital as being the community's property, on lease to each independent cooperative. As such, varying forms of taxation and regulation would likely be imposed for the greater good of society. Therefore the status of the property itself would be relative.

It's worth noting that the relative nature of the status of property is not something that would be entirely unique to a socialist economy. For example, various laissez-faire lunatics do not regard (exploitative) property in most capitalist countries to be quintessentially private, simply because they are subject to taxation and minor regulations (minimum wage laws, child labor laws, etc.).

It should also be taken into account that all of my points on this matter are themselves based upon the context of a socialist economy that would continue to retain a market for distributive purposes. Some socialists (mutualists and the like) view the retention of a market as an eternal component of a socialist economy. Others (myself included), however, are inclined to view such an economic arrangement as constituting more of a transitional phase into some other (equally or more efficient) alternative. Others still would seek to transcend markets from the outset. Notwithstanding such (conflicting) interpretations/agendas, a labor-managed economy (market-based or otherwise) is the foundational framework of any socialist order.

My proposal has nothing to do with what you call petit bourgeois capitalism.

I never suggested that it did.


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Re: The Socialized Firm

Post by Rebel Redneck 59 on Mon Aug 08, 2011 6:22 am

Admin wrote:Well, you are getting into a question of semantics now. Private property, insofar as the previous context is concerned, is a legal construct within bourgeois states, wherein individual citizens are accorded ownership over the means of production within the functional parameters of the capitalist mode of production. The aforementioned construct enables the extraction of surplus via the utilization of wage labor. From the standpoint of revolutionary socialism, the idea is to modify the law, so as to prohibit this form of exploitation from transpiring. Hence, the means of production, in enterprises that necessitate collective participation, are themselves legally mandated to be collectively managed. Private property, (again) within the capitalist context, would thus be abolished.

Now, one could refer to labor-managed businesses as being 'private' enterprises, in the sense that they are not run by state bureaucracies, etc. At the same time, however, the status of the property (i.e. capital) itself may or may not be regarded as 'private'. The latter is entirely contingent upon the structure of the economy, the forms of regulations imposed upon businesses by the state, and how they are subsequently interpreted by society. For example, a socialist commonwealth could conceivably regard some forms of capital as being the community's property, on lease to each independent cooperative. As such, varying forms of taxation and regulation would likely be imposed for the greater good of society. Therefore the status of the property itself would be relative.

It's worth noting that the relative nature of the status of property is not something that would be entirely unique to a socialist economy. For example, various laissez-faire lunatics do not regard (exploitative) property in most capitalist countries to be quintessentially private, simply because they are subject to taxation and minor regulations (minimum wage laws, child labor laws, etc.).

It should also be taken into account that all of my points on this matter are themselves based upon the context of a socialist economy that would continue to retain a market for distributive purposes. Some socialists (mutualists and the like) view the retention of a market as an eternal component of a socialist economy. Others (myself included), however, are inclined to view such an economic arrangement as constituting more of a transitional phase into some other (equally or more efficient) alternative. Others still would seek to transcend markets from the outset. Notwithstanding such (conflicting) interpretations/agendas, a labor-managed economy (market-based or otherwise) is the foundational framework for any socialist order.

Never mind then, my mistake. I thought you wrote in favor of abolishing all sorts of Private Property, not just Private Property in the Capitalist sense. We are on the same page with regard to the Capitalist form of Private Property.
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Re: The Socialized Firm

Post by Admin on Mon Aug 08, 2011 6:26 am

SSocialistStateSS wrote:I understand what you mean. I don't think we should let the status quo with the petit-bourgeois go either, however is there really no other way we can do it? There is no other way to eliminate wage labor in small petit-bourgeois business other than taking away the business?

Sir, revolutions are not for the faint of heart. What we are proposing is the elimination of economic exploitation and the anarchy of the market. The realization of socialism will require sacrifice and impose hardships upon many, but the end result will be a far more just society than anything ineffectual liberal reforms or cowardly half-measures would ever be capable of producing.

The inescapable plight of the petty capitalist should not give you cause to be ambivalent. Maintaining confidence in your resolve as a revolutionary requires that you understand and appreciate what you and your comrades are collectively striving for.

The fact of the matter is that those who comprise the petit-bourgeois class must be integrated into a liberated and empowered working class. (The exact way in which this should be executed is debatable. However, the necessity of this action should be self-evident to any socialist.) Traditional (bourgeois) stratification will simply no longer exist within a socialist society. Therefore this particular integration process is not something that an empathetic person should be uncomfortable with.

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Re: The Socialized Firm

Post by Rebel Redneck 59 on Mon Aug 08, 2011 6:42 am

Rev Scare wrote:We are here concerning ourselves with the concept of a privately owned business that hires additional, non-family employees, not with self-employed individuals. As far as the latter category is concerned, it presents no problem whatsoever because it is impossible to "exploit" yourself. If you voluntarily decide to establish an enterprise in order to work for yourself, then you are the immediate beneficiary of the fruits of your labor. The primary reason for my indisposition toward preserving private ownership of means of production is, as Celtiberian has already mentioned, due to the social necessity of such inputs and the collaborative nature of most meaningful human work. Private businesses, in my opinion, would continue to conserve and even promote the capitalist notion of inequality in what is in actuality a collective endeavor: the generation of the social product.

In all honesty, I am opposed to remunerative policies that are determined by a narrowly defined standard of what constitutes "productivity" or some other intrinsically inequitable basis for reward. Work should be recompensed in accordance with effort, labor-time, and intensity, and this can only be achieved if all workers (indeed, all of society) are capable participants in the management of the company (and ultimately, the economy as a whole).

I do not see a privately owned business that hires non family members as employees as being exploitative as long as the owner (s) of said business would work side by side with the workers and everyone would receive pay equivalent or at least relative to the amount of work they put in. Therefore it would be impossible for the owner (s) of said business to earn most of the profit generated simply due to the fact that they owned the business. That being said I believe cooperatives and self employment should predominate over this form of business. It may be easier to integrate some former Capitalists into a Socialist economy by implementing this form of business on a limited scale.

As for the question of remuneration: In this case the law would not only compel the owner ( s) of said firm to labor alongside the workers it would also compel him or her to divide the profits in an equitable way ( that is everyone would receive pay according to the amount of work they put in). The State ( or a Guild) would keep an eye on such firms in order to make sure the owners would be following such a law. Of course I havent proven my idea to be feasible.
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Re: The Socialized Firm

Post by Celtiberian on Mon Aug 08, 2011 10:59 am

SSocialistStateSS wrote:Celt, you said little convenience stores should be run by labor managed firms. Why and how?

Because they're an efficient and non-exploitative method of production.

What does a labor managed firm look like?


I provide an outline of how labor-managed firms function here. If you're interested in seeing how one looks in practice, go to the Educational Videos thread and watch The Mondragón Experiment.

Also, does the owner of the store still technically OWN the store?


The labor-managed firms which exist within the confines of the capitalist mode of production are technically owned by the employees who work in them. However, within a socialist mode of production, the capital assets would be publicly owned and leased out to collectives of workers.

I am not opposed to private property entirely. What about say mom and pop's pizza shop? Why can't they OWN it, like I asked before?

If the pizza shop in your example is operated exclusively by a family (in other words, they employ no wage laborers), then I see no legitimate reason why it should be collectivized—at least within the context of a socialist market economy (which, as the Admin pointed out, can be viewed either as a transitional phase toward a superior alternative, or as an end in itself).

The reason petit-bourgeois businesses must be opposed is because they violate the same fundamental principles all capitalist firms do. I wrote an essay on this subject entitled "The Petite Bourgeoisie" which offers a detailed analysis of the topic, and I recommend reading it if you're curious about the socialist objection to small capitalist firms.

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Re: The Socialized Firm

Post by Pantheon Rising on Mon Aug 08, 2011 5:10 pm

Celtiberian wrote:Because they're an efficient and non-exploitative method of production.

I provide an outline of how labor-managed firms function here. If you're interested in seeing how one looks in practice, go to the Educational Videos thread and watch The Mondragón Experiment

The labor-managed firms which exist within the confines of the capitalist mode of production are technically owned by the employees who work in them. However, within a socialist mode of production, the capital assets would be publicly owned and leased out to collectives of workers.

If the pizza shop in your example is operated exclusively by a family (in other words, they employ no wage laborers), then I see no legitimate reason why it should be collectivized—at least within the context of a socialist market economy (which, as the Admin pointed out, can be viewed either as a transitional phase toward a superior alternative, or as an end in itself).

The reason petit-bourgeois businesses must be opposed is because they violate the same fundamental principles all capitalist firms do. I wrote an essay on this subject entitled "The Petite Bourgeoisie" which offers a detailed analysis of the topic, and I recommend reading it if you're curious about the socialist objection to small capitalist firms.

Thanks, Celt. I understand your ideas much better now. Nice site by the way.

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Re: The Socialized Firm

Post by GF on Fri Aug 12, 2011 12:35 am

I have a single concern though. I believe a major characteristic of socialism is production for use, and I don't see how simply introducing cooperatives into the market will address this. Another problem I see with the market system is alienation at the point of consumption.

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Re: The Socialized Firm

Post by Celtiberian on Fri Aug 12, 2011 1:31 pm

Godfaesten wrote:I have a single concern though. I believe a major characteristic of socialism is production for use, and I don't see how simply introducing cooperatives into the market will address this. Another problem I see with the market system is alienation at the point of consumption.

A major characteristic of the higher stage of communism is production for use, as opposed to production for exchange. The initial stage of socialism, however, seeks to solely overcome the central injustice of capitalism, namely: exploitation. Socialism will continue to feature generalized commodity production and fall short of achieving full remunerative justice. Some activist believe socialism is the best humanity can attain, but I happen to believe we can transcend even socialism over time.

As I've explained elsewhere, advances in information technology have made economic planning much more feasible in recent decades, thereby making a more communistic economy attainable. The two most elaborated methods of economic planning—which, at least theoretically, overcome the inefficiency and injustice the centralized economic planning practiced in the former Eastern bloc featured—are 'participatory economics' (Albert & Hahnel, Devine & Adaman) and 'cybernetic economic planning' (Cockshott & Cottrell). Each model has its benefits and shortcomings, but I consider both of them to be vastly more appealing than retaining the market system of allocation. I believe that society can and should move toward complete market abolition, but planning should be phased in gradually and in accordance with the will of the people.

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Re: The Socialized Firm

Post by Rebel Redneck 59 on Fri Aug 12, 2011 7:05 pm

Celtiberian wrote:A major characteristic of the higher stage of communism is production for use, as opposed to production for exchange. The initial stage of socialism, however, seeks to solely overcome the central injustice of capitalism, namely: exploitation. Socialism will continue to feature generalized commodity production and fall short of achieving full remunerative justice. Some activist believe socialism is the best humanity can attain, but I happen to believe we can transcend even socialism over time.

As I've explained elsewhere, advances in information technology have made economic planning much more feasible in recent decades, thereby making a more communistic economy attainable. The two most elaborated methods of economic planning—which, at least theoretically, overcome the inefficiency and injustice the centralized economic planning practiced in the former Eastern bloc featured—are 'participatory economics' (Albert & Hahnel, Devine & Adaman) and 'cybernetic economic planning' (Cockshott & Cottrell). Each model has its benefits and shortcomings, but I consider both of them to be vastly more appealing than retaining the market system of allocation. I believe that society can and should move toward complete market abolition, but planning should be phased in gradually and in accordance with the will of the people.

May I ask what would be the point of abolishing the market?
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Re: The Socialized Firm

Post by GF on Fri Aug 12, 2011 10:08 pm

Rebel Warrior 59 wrote:May I ask what would be the point of abolishing the market?

I'm not sure about Celt, but I agree with most of the SI's assessment of capitalism, and find that many of the most harmful characteristics of a market would live on even with cooperatives replacing private firms.

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Re: The Socialized Firm

Post by Celtiberian on Sun Aug 14, 2011 1:37 pm

Rebel Warrior 59 wrote:May I ask what would be the point of abolishing the market?

As I stated above, markets are a hindrance to complete remunerative justice. By this I mean that markets allocate the social product in a manner which many people find ethically objectionable. For example, even within the context of a socialist market economy, workers would still be remunerated unequally due to such arbitrary factors as: advantages in educational opportunities, genetic endowment, possessing better equipment, and producing commodities which are more desired by the population. The market abolitionists argue—in my opinion, persuasively—that the only truly just way to remunerate workers is on the basis of the relative effort and sacrifice they expend in the performance of socially necessary labor.

Markets also obscure human relations in production (aka, commodity fetishism) and promote antagonisms between buyers and sellers, thereby creating unnecessary conflict and undermining solidarity.


Last edited by Celtiberian on Sat Aug 20, 2011 3:32 pm; edited 5 times in total

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"Nationality. . . is a historic, local fact which, like all real and harmless facts, has the right to claim general acceptance. . . Every people, like every person, is involuntarily that which it is and therefore has a right to be itself. . . Nationality is not a principle; it is a legitimate fact, just as individuality is. Every nationality, great or small, has the incontestable right to be itself, to live according to its own nature. This right is simply the corollary of the general principle of freedom."
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Re: The Socialized Firm

Post by Celtiberian on Sun Aug 14, 2011 1:51 pm

Godfaesten wrote:many of the most harmful characteristics of a market would live on even with cooperatives replacing private firms.

It depends entirely on the variety of market socialism you're analyzing. I agree that merely replacing capitalist firms with labor-managed firms would leave many harmful characteristics of the market intact. However, the socialist market economy I advocate on behalf of would also abolish financial markets (by nationalizing financial institutions), eliminate the labor market (by having the government become the employer of last resort), and enact a protectionist trade policy. The only remaining market would be in the the production and distribution of goods and services. I fully acknowledge that even this arrangement isn't exactly ideal, but it does put an end to exploitation and is the most feasible successor-system to capitalism.

Again, I'm quite certain that we can achieve something better, but it will most likely have to be phased in.

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Re: The Socialized Firm

Post by Rebel Redneck 59 on Sun Aug 14, 2011 9:25 pm

Celtiberian wrote:As I stated above, markets are a hindrance to complete remunerative justice. By this I mean that markets allocate the social product in a manner which many people find ethically objectionable. For example, even within the context of a socialist market economy, workers would still be remunerated unequally due to such arbitrary factors as: advantages in educational opportunities, genetic endowment, possessing better equipment, and producing commodities which are more desired by the population. The market abolitionists argue—in my opinion, persuasively—that the only truly just way to remunerate workers is on the basis of the relative effort and sacrifice they expend in the performance of socially necessary labor.

Markets also obscure human relations in production (aka, commodity fetishism) and promote antagonisms between buyers and sellers, thereby creating unnecessary conflict and undermining solidarity.

What do you mean by complete remunerative justice? Are you speaking of pay?

Now correct me if Im wrong, but I think you are talking about pay when you speak of unequal remuneration. In that case there is nothing wrong in people getting paid unequally. If this proposal were put in place then it would be theoretically possible for a half retarded fruit picker to earn as much as a machinist , so long as he or she put enough effort and sacrifice into his or her work. Does that ( allowing an unskilled worker to earn as much as one who put lots of time into learning a trade as well as practicing it ) seem just? I think not. As for commodity fetishism, that concept sounds like what happens when you mix totally irrelevant philosophical rubbish with the idea of a just economy. In other words I dont see what such foolish academic nonsense has to do with forming a Socialist economy. Call me what you want but allowing moonstruck nonsense ( such as this) to be passed off as Socialism has always been the death of the entire Socialist movement. Its no wonder that so many working men and women want nothing to do with Socialism when such intellectual garbage is spouted from the mouths of those who claim to be standing up for the worker. Sorry for my rant there, I didnt want to insult you and I apologize if I came off like that, but Im just so sick and tired of moonstruck people who have never done anything ( besides theorize in a room full of books) gain so much acceptance as " Socialists" when they should have stuck to teaching sociology.

Anyways thanks for responding. I dont agree with your views on the market but its good to see the other side from time to time.
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Re: The Socialized Firm

Post by Admin on Mon Aug 15, 2011 3:52 am

Rebel Warrior 59 wrote:What do you mean by complete remunerative justice? Are you speaking of pay?

He is referring to the inequities inherent to market mechanisms when they are utilized for remunerative purposes. So, yes, that would obviously refer to the amount of pay that markets accord workers in various enterprises, irrespective of how they happen to be organized.

Now correct me if Im wrong, but I think you are talking about pay when you speak of unequal remuneration. In that case there is nothing wrong in people getting paid unequally.

No socialist model that has hitherto been discussed is in any way based upon a framework of completely equal remuneration. What has been proposed, however, is a system that compensates individuals in accordance to various criteria, which transcend the whims of the market.

If this proposal were put in place then it would be theoretically possible for a half retarded fruit picker to earn as much as a machinist , so long as he or she put enough effort and sacrifice into his or her work. Does that ( allowing an unskilled worker to earn as much as one who put lots of time into learning a trade as well as practicing it ) seem just? I think not.


I too think labor should come to be remunerated in accordance to the overall effort exerted by the individual laborer. However, this is not something I think can be established from the outset, following a socialist revolution. Nevertheless, I am of the opinion that future generations will base their respective [career-related] pursuits upon a criteria that is no longer driven by crude material incentives. (We can see where such a superficial, consumption-driven mentality has brought society. Children today dream of becoming professional athletes, pop stars, and models, due to the associated wealth and acclaim that market systems have established in these trivial fields.) Rather, people will be drawn to various careers because of their individual proclivities, various social attitudes regarding the relative value of the work itself, etc.

In the meantime, I think there are a number of ways in which a socialist state can undermine market-driven remuneration. For example, a reasonable system of taxation can ensure that individuals involved in enterprises that generate vast sums of wealth (via the market) are more appropriately compensated for their 'work'. (I for one cannot see a socialist state maintaining a system that awards professional athletes and entertainers with tremendous wealth, simply because of market facilitation.)

As for commodity fetishism, that concept sounds like what happens when you mix totally irrelevant philosophical rubbish with the idea of a just economy. In other words I dont see what such foolish academic nonsense has to do with forming a Socialist economy. Call me what you want but allowing moonstruck nonsense ( such as this) to be passed off as Socialism has always been the death of the entire Socialist movement. Its no wonder that so many working men and women want nothing to do with Socialism when such intellectual garbage is spouted from the mouths of those who claim to be standing up for the worker. Sorry for my rant there, I didnt want to insult you and I apologize if I came off like that, but Im just so sick and tired of moonstruck people who have never done anything ( besides theorize in a room full of books) gain so much acceptance as " Socialists" when they should have stuck to teaching sociology.

Nothing in this rant of yours serves to discredit the theory of commodity fetishism. In fact, I don't see how any rational socialist can impeach the theory. Of course, this does not serve to undermine the relative utility of markets, at least when juxtaposed to certain, less dependable alternatives.

I must say that you appear to have an interest in marginalizing the negative characteristics inherent to market economies. I imagine that this is likely attributable to some ideological antagonism towards expressions of socialism that promote various forms of economic planning. In any case, I find your unyielding embrace of market systems to be rather ill-advised. That's just my humble opinion.

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Re: The Socialized Firm

Post by Rev Scare on Mon Aug 15, 2011 4:46 am

Rebel Warrior 59 wrote:What do you mean by complete remunerative justice? Are you speaking of pay?

I believe that he has already answered your query quite sufficiently. Remunerative justice in the sense that individuals are rewarded on the basis of their effort, the intensity of their work, and the necessary labor time required to complete their work. The market perpetuates needless inequality, alienates both workers and consumers from each other by mediating human interaction through commodity exchange, and far from existing as the final omniscient and omnibenevolent distributive economic medium that its ardent proponents proclaim it to be, is ultimately a structurally irrational and blundering (ergo inefficient) system by which to distribute the social product.

Now correct me if Im wrong, but I think you are talking about pay when you speak of unequal remuneration. In that case there is nothing wrong in people getting paid unequally. If this proposal were put in place then it would be theoretically possible for a half retarded fruit picker to earn as much as a machinist , so long as he or she put enough effort and sacrifice into his or her work. Does that ( allowing an unskilled worker to earn as much as one who put lots of time into learning a trade as well as practicing it ) seem just? I think not.

Within the latter stage economic order that many of us envision (a democratically decentralized planned economy), individuals would indeed be rewarded according to effort and sacrifice, but it does not follow from this that a skilled worker need be rewarded equally as an unskilled worker provided that equal opportunities for self-enhancement exist within the social formation. With that said, there are some matters to be explicated here.

Unequal remuneration need not reflect contribution. Industrial capitalists expropriate surplus labor solely as the result of their ownership of the means of production; they do not participate in the fundamental class process (i.e., the generation of surplus labor) other than by granting workers access to the means of production and coordinating the overall labor process (the latter most often accomplished by hiring managers). All capitalists, in the end, earn income by the self-expansion of their privately owned capital assets. Needless to say, such a process is only "necessary" to production insofar as the capitalist economic order itself is concerned. It is worth reiterating the above due to the fact that capitalist apologists often justify the earnings of private business owners on the grounds of innovation and risk incurred, neither of which are requisite components in a capitalist's income equation (let alone do they legitimize non-labor income). This brings us to the market, which, even when the capitalist mode of production is eradicated, would continue to retain arbitrary, and I would therefore say unjust, remunerative processes.

The market, as Celtiberian has already explained, compensates in congruence with a myriad of inequitable factors, including genetic endowment, educational opportunities, the success one meets in selling one's goods and services, initial working conditions, etc. This sordid reality has inspired many of us to seek a more desirable form of distributive organization, and superior, feasible alternatives are already theoretically applicable. Furthermore, your invocation of some type of subjective value inherent to different kinds of labor is a rather fanciful manner of determining remunerative policy. Why should somebody whose work is supposedly more socially "worthwhile" due to genetic and educational advantages be intrinsically more deserving of a greater share of the social product than somebody who is less privileged but works diligently?

As for commodity fetishism, that concept sounds like what happens when you mix totally irrelevant philosophical rubbish with the idea of a just economy. In other words I dont see what such foolish academic nonsense has to do with forming a Socialist economy. Call me what you want but allowing moonstruck nonsense ( such as this) to be passed off as Socialism has always been the death of the entire Socialist movement. Its no wonder that so many working men and women want nothing to do with Socialism when such intellectual garbage is spouted from the mouths of those who claim to be standing up for the worker. Sorry for my rant there, I didnt want to insult you and I apologize if I came off like that, but Im just so sick and tired of moonstruck people who have never done anything ( besides theorize in a room full of books) gain so much acceptance as " Socialists" when they should have stuck to teaching sociology.

We often describe the baseness at the heart of our consumerist societies as being "materialistic." Commodity fetishism illuminates much of this aspect of our economic order. Commodity fetishism is an indivisible feature of a social formation whose most prominent economic process consists in commodity production. As such, all valuation of labor can only occur after objects of value confront each other in the market. Commodities in this way come to "embody" value in their own right, but what is value other than a relationship between the various social producers? The objects of value themselves appear to possess some intrinsic property that reflects their own value. This, of course, is merely an illusion which conceals the underlying social relations, and hence we term this phenomenon, which only manifests within a society that practices universal commodity exchange, "commodity fetishism." To quote Marx himself in Capital:

"The equality of the kinds of human labour takes on a physical form in the equal objectivity of the products of labour as values; the measure of the expenditure of human labour-power by its duration takes on the form of the magnitude of the products of labour; and finally the relationship between the producers, within which the social characteristic of their labours are manifested, take on the form of a social relation between the products of labour.

The mysterious character of the commodity-form consists therefore simply in the fact that the commodity reflects the social characteristics of men's own labour as objective characteristics of labour themselves, as the socio-natural properties of these things. Hence it also reflects the social relation of the producers to the sum total of labour as a social relation between objects, a relation which exists apart from and outside the producers. Through this substitution, the products of labour become commodities, sensuous things which are at the same time supra-sensible or social. In the same way, the impression made by the thing on the optic nerve is perceived not as a subjective excitation of that nerve but as the objective form of a thing outside the eye. In the act of seeing, of course, light is really transmitted from one thing, the external object, to another thing, the eye. It is a physical relation between physical things. As against this, the commodity-form, and the value-relation of the products of labour within which it appears, have absolutely no connection with the physical nature of the commodity and the material relations arising out of this. It is nothing but the definite social relation between men themselves which assumes here, for them, the fantastic form of a relation between things. In order, therefore, to find an analogy we must take flight into the misty realm of religion. There the products of the human brain appear as autonomous figures endowed with a life of their own, which enter into relations both with each other and with the human race. So it is in the world of commodities with the products of men's hands. I call this the fetishism which attaches itself to the products of labour as soon as they are produced as commodities, and it is therefore inseparable from the production of commodities."

Lastly, it is absolutely foolish to denounce theoretical analysis. Theoretical insight is invaluable with respect to providing one with guidance in all areas concerning the subject matter. Without a sound understanding of what it is that one is acting upon, one might as well not act at all. If you do not see the value in actually understanding how our economic system operates and what is demanded to correct it, then it is my strong belief that you will forever remain politically impotent as far as bringing about genuine and positive social change is concerned.

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