Walt wrote:
> I find the "conflict theory" of the firm developed by radical economists
> (including PEN-L posters like Jim Devine and Gil Skillman), in which
> capitalists may choose an inefficient technique if it increases their
> bargaining power, to be a quite persuasive argument.
thanks for the praise.
> However, it seems that alot of these analyses have suggested that this
> shows the greater efficiency, at least potentially, of worker controlled
> firms. Couldn't it be countered that such firms face the same problem? Not
> so much with technique being selected to change the relative bargaining
> power of classes, but of individuals within the firm? Even if everyone
> votes or participates in decision making and presumably wouldn't agree to
> choice of technique which increased someone else's power at their expense,
> couldn't it be claimed that some members might form a coalition?
that's right. In my original article with Michael Reich (RRPE, 1981?), we simply compared the idealized neoclassical vision of the firm with an idealized worker-controlled firm.
There are lots of problems with worker-controlled firms, including those of finance for expansion and the hiring of new firm members (who threaten to become second-class citizens in the firm -- or the firm simply restricts new hiring). That's why I favor the idea of "embedded" worker-controlled firms. This replaces so-called "market socialism," in which the worker co-ops are plunked down in a market free-for-all (a la David Schweickart) with central-government regulation (of the sort we now have) and encouraged to maximize profits. Instead, I like the vision of Charlie Andrews in his FROM CAPITALISM TO EQUALITY (see http://www.laborrepublic.org/), in which firms are not-for-profit (but with very specific mission statements) and are embeded in society (in Karl Polanyi's terms). Where I differ from Andrews is that I favor worker control where possible.
Paul Phillips has suggested that the old system in Yugoslavia (now in Slovenia) was more similar to the "embedded" system than the Schweickart system. But he's the expert on that subject, not me.
> ... the empirical
> evidence does indeed seem to indicate the greater efficiency of worker
> controlled firms. And then what about solidarity among workers in such
> firms? this seems compelling, but wouldn't examples of so-called
> "degeneration" call this into question somewhat?
the problem with that evidence, as I understand it, is that the efficiency is totally static in nature, not dynamic. And yes, without firms being embedded, market competition discourages solidarity between firms. (Schweickart does impose a minimum wage, to avoid competing over labor costs.) Andrews' sketch deals with this problem (by embedding) and also suggests how what might be called "worker-controlled embedded firm socialism" would be encouraged to move in the communist direction. -- Jim Devine / "There can be no real individual freedom in the presence of economic insecurity." -- Chester Bowles