Table Of ContentLabour Managed Firms and
Post-Capitalism
Marx claims that unselfishness is a child of (workplace) culture, whereas the gene
is selfish. If Marx is right then the prerequisite for overthrowing capitalism is a
system which both leverages selfishness and creates solidarity between workers.
This book illustrates and discusses the major points of the economic theory of pro-
ducer cooperatives, its evolution since the 1950s, and links with Marxian theory.
Labour Managed Firms and Post-Capitalism, most importantly, demonstrates
that a system of producer cooperatives offers a wealth of advantages compared to
capitalism. There is general agreement that the main benefit of this form of eco-
nomic democracy is that people who are allowed to freely pursue their interests are
happier than those acting on somebody else’s instruction. The author argues that
a system of democratic firms would eradicate classical (high-wage) unemploy-
ment and scale down both Keynesian and structural unemployment levels. He also
shows that a system of producer cooperatives literally reverses the capital-labour
relationship typical of capitalism and that its establishment can consequently be
looked upon as a revolution.
This volume is of great interest to academics, lecturers and researchers with
an interest in Marxism, political economy and industrial economics, as well as
economic theory and philosophy.
Bruno Jossa has held teaching posts at the Universities of Pescara, Messina,
Venice and Naples. He is a co-founder of the Associazione italiana per lo studio
dei sistemi economici comparati, an association which he chaired in 1992-93.
From 1994 to 2005 he was Chairman of the Associazione per la collaborazione tra
gli economisti di lingue neolatine. Prizes received by Professor Jossa include the
V ISTECOR European Culture Award (1991), the ‘Saint Vincent’ Award (1998)
and, in 2011, the F. Nitti gold medal of the Accademia dei Lincei.
Routledge Frontiers of Political Economy
For a full list of titles in this series please visit www.routledge.com/books/series/
SE0345
1 Qualitative Methods in Economics
Mirjana Radović-Marković and Beatrice Avolio Alecchi
2 Quantum Macroeconomics
The legacy of Bernard Schmitt
Edited by Jean-Luc Bailly, Alvaro Cencini and Sergio Rossi
3 Creative Research in Economics
Arnold Wentzel
4 The Economic Ideas of Marx’s Capital
Steps towards post-Keynesian economics
Ludo Cuyvers
5 A New Economics for Modern Dynamic Economies
Innovation, uncertainty and entrepreneurship
Angelo Fusari
6 Income Distribution and Environmental Sustainability
A Sraffian approach
Robin Hahnel
7 The Creation of Wealth and Poverty
Means and ways
Hassan Bougrine
8 Labour Managed Firms and Post-Capitalism
Bruno Jossa
Labour Managed Firms and
Post-Capitalism
Bruno Jossa
First published 2017
by Routledge
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© 2017 Bruno Jossa
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accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form
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used only for identification and explanation without intent to infringe.
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Contents
Introduction 1
1 Historical materialism and democratic firm management 12
2 A system of producer cooperatives 32
3 Democratic firm management and socialism 45
4 More advantages of a system of democratic firms 61
5 Unemployment in a system of producer cooperatives 73
6 Democratic socialism and income distribution 83
7 Cooperative firms as a new mode of production 95
8 An in-depth analysis of the links between producer
cooperatives and socialism 105
9 Self-driven economic growth and Darwinism 117
10 The democratic firm and the transition to socialism 132
11 Corporate limited liability as a springboard for socialism 152
12 The democratic firm and ‘passive revolution’ 163
13 A few reflections on the reasons why cooperative firms
have failed to gain a firm foothold 177
vi Contents
14 Democratic firm management and the role of
the State in capitalism versus socialism 193
References 208
Index 244
Introduction
1. The argument that both Marx’s writings on the economic system of the future
and his overall approach offer fragmentary suggestions rather than a full-fledged
theoretical edifice is anything but new (and is actually consistent with Marx’s
claim that methodology only is what really matters). As early as 1899, Bernstein
wrote that Marx and Engels’s writings could be used to demonstrate everything
and Kautsky warned that it was impossible to absolutely rely on every one of
Marx’s words because his sayings were often mutually contradictory (Kautsky
1960, p. 437).1
With reference to the social order of the transitional period, Marxists fall into
two groups: those who assume that a truly Marxist socialist economy is one where
firms are run by the workers themselves and those who think of socialism as a
centrally planned command economy.2 In point of fact there is no decisive textual
evidence in support of either view. Marx once wrote: “If cooperative production is
not to remain a sham and a snare; if it is to supersede the capitalist system; if the
united co-operative societies are to regulate national production upon a common
plan, thus taking it under their control, and putting an end to the constant anarchy
and periodical convulsions which are the fatality of Capitalist production – what
else, gentlemen, would it be but Communism, ‘possible’ Communism?” (Marx
1871a, p. 335). Irrespective of this, there is no clear consensus over the assump-
tion that Marx looked upon a system of producer cooperatives as the new produc-
tion mode destined to take the place of capitalism (see, inter alia, Marcuse 2015).
Leaving aside the issue of the existence of any such textual evidence, in this
book I will try to answer the question whether a system of democratic firms
operating in a market economy can actually be said to generate a new mode of
production. A convinced socialist such as Walras did not believe that c ooperation
would give rise to a socialist order. In 1900, he wrote (Walras 1990b, vol. IX, p. 66):
“Chercher la reforme sociale dans l’association coopérative, c’est exactement
comme si on la cherchait dans l’assurance mutuelle. C’est à la fois diminuer sinon
méconnaître la réforme sociale, et exagérer, pour la compromettre, l’association
coopérative.”
It is widely held that things stand differently today. In this connection, Gibson-
Graham argued that “once it was the vision of socialism or communism and the
experiments of the soviets in the Eastern Bloc that configured the foreground of
2 Introduction
the Left’s economic imaginary,” but that “today, at least for some, it is the original
‘third way’ communitarianism or a revitalized social democracy that occupies
this otherwise vacated space” (see Gibson-Graham 2003). Describing the Soviet
system as a mix of socialism and state capitalism, Andreani (2001b, p. 175) argues
that the first alternative that comes to mind is a system of producer cooperatives.3
In Antidühring (p. 281), Engels categorised cooperatives as “transition measures
to the complete communistic organisation of society”: like him, I am persuaded
that a feasible model of socialism is worker control of firms, the proposal of work-
ers’ councils that Oskar Lange (1957, p. 159) rated as “a springboard for pressing
the working class into positive action” (for an earlier study suggesting that such a
system realises socialism, see Jossa 1978). Taking the cue from Anweiler (1958,
p. 472), let me add that nowadays the original idea of workers’ councils as “the
primary goal of Marxism” (Garaudy, undated, p. 187) is as topical as ever4 and
that due to the burgeoning role of markets in a globalised economy it is possible to
argue that a system of worker-controlled firms operating in a market economy is
the only council model that can be implemented in practice in our day.5
Ideologically speaking, economic democracy and political democracy are two
facets of one and the same founding principle. According to Robert Dahl (1989,
p. 331), “if democracy is justified in governing the state, then it must also be justified
in governing economic enterprises; and to say that it is not justified in governing eco-
nomic enterprises is to imply that it is not justified in governing the state.”6
The idea that socialism may come in two forms is closely associated with the
two main contradictions that Marx pointed up in capitalism: the capital-labour
conflict and the mismatch between planned production and anarchical distribution.
Anyone emphasising the latter contradiction will think of socialism as a centrally
planned economy (see, e.g., Godelier 1966 and Mileikovsky 1969, pp. 306–07),
while those prioritising the capital-labour conflict will argue that socialism arises
when the functions of the ‘primary factors of production’ (labour and capital) are
reversed upon the establishment of a system of producer cooperatives of the LMF
type (see Jossa 2010b, pp. 262–63 and Jossa 2011), where labour switches roles
with capital in running business enterprises.
According to Korsch (1923, p. 91), in bourgeois society the dead accumulated
labour of past generations rules as ‘capital’ over present living labour (in practical
and theoretical terms), whereas a proletarian economy and, hence, the Marxist eco-
nomic system which is its theoretical counterpart envisages the control of society
over its aggregate output; in other words, in such a society it is living work that rules
over the dead labour accumulated in the past, i.e. ‘capital.’7
As is well known, while the aim of capitalistic firms is to maximise profit in
the interests of capitalists, the self-managed firms theorised by Ward (1958) and
Vanek (1970) make it their task to maximise average worker income or, even more
appropriately, the benefits accruing to the workers (specifically, to those majority
workers who have authority to pass resolutions). As a result, as soon as economic
activity is made to pursue a different goal, the system also (or, more correctly, the
mode of production) will change as a matter of course. The well-known Italian phi-
losopher Emanuele Severino has argued (2012, p. 94) that “within a logic which
Introduction 3
postulates goals and means (as has been prevailing over the entire course of human
history), there is little doubt (though the consequence is less dominant than the
starting assumption) that whenever an action – in this case the c apitalistic mode of
operation – is made to deflect from its original goal and to pursue a different one,
this same logic determines that the action itself will turn into s omething different
in content, rhythm, intensity, relevance and configuration.”
Inasmuch as it is true that Marx’s method is a combination of two procedures,
namely the identification of aspects common to all production processes and the
combination of such processes in such a way as to account for the specificity of
individual modes of production and for the passage from one production mode to
the next one at different stages of social evolution (see La Grassa 1972, p. 15), there
are reasons for arguing that the transition from capitalism to self- management
gives rise to a new mode of production because it identifies the aspects that the
previous and new production modes have in common and combines them with the
specific aspect of the new mode of production, namely the substitution of labour
for capital as the sovereign power within the business enterprise.8
Nonetheless, the idea that a socialist revolution can take form in the two dif-
ferent ways discussed above is rejected by a great many Marxists who do not
equate socialism with democratic firm control and are cynical about the pos-
sibilities for worker cooperatives.9 Among them, analysts of peer production
(PP) hold that this new production model has much in common with Marxian
communism and may consequently offer a feasible alternative to capitalism
(see Rigi 2013).
2. Additional points worth discussing are the reasons why firm management is
assumed to mark a major advancement in the evolution of humankind and the
rationale behind the claim that Soviet-type planning is a faulty model of socialism.
One major advantage of democratic firms (or producer cooperatives or worker-
controlled firms) is the substitution of the ‘one head, one vote’ principle for the non-
democratic ‘one share, one vote’ principle of bourgeois democracy. The suppression
of hired labour acts as an enabler of democracy since it puts an end to the coercion of
workers by their employers – an evil that turns useful thinking individuals into lifeless
tools for the attainment of another’s ends.10
In Cerroni (1973, p. 45), according to Marx, we read: “if the ultimate effect
of capitalism is to turn the subject into an object and the object into a subject
(i.e. to reify living individuals and humanise inanimate things), the tendency
that the expropriation of the expropriators will set in motion is the creation of
truly personalised (humanised) interpersonal relations and fully reified relations
between things (effectively subject to the control of social man).”
One way to contrast socialism with capitalism is to liken socialism to
Christianity and to argue that, while capitalism is grounded in egoism and
characterised by “the reciprocal and all-sided dependence of individuals who
are indifferent to one another,” socialism is based on the need of individuals
to entertain meaningful relationships with their fellow-beings (Marx 1857–58,
p. 97). It is often argued that individuals are moved on by self-love and love
