Would there be business cycles in a socialist society of worker co-ops?

And how would the process of inflation/deflation be different from a capitalist society?

Showing 3 reactions

How would you tag this suggestion?
Please check your e-mail for a link to activate your account.
  • Lucas Pascalides
    commented 2018-02-03 18:34:56 -0500
    Thank you for your comment Nicholas! I agree with you that it can be dangerous to promise things that cannot be unfulfilled and that it would take time to change behavioral patterns. I am worried that similar profit-driven motives might occur in worker co-ops as well, and some of our current problems may remain. My thought of a socialist society of worker co-ops is that people own the surplus of their own labor and thus the same investment bubbles that are created in business cycles would not occur. But I am having trouble grasping the process in a system as it is quite abstract for me. My thought is that what could unfortunately happen is that worker co-ops could invest their surplus in other co-ops that are creating profits and thus create conglomerate worker co-ops(?), consequently attract other worker co-ops which could create investment bubbles. I imagine though that they would be smaller as the profit motive would most likely be a smaller factor in the society and in most co-ops.

    I don’t agree that there is NO effort in a capitalism to prepare for future events and that R&D and science is ONLY for short-term profits. There are some efforts, especially with Keynesian policy (which are reforms within a capitalist society), where the public sector intervenes for example to mitigate the social and economic consequences of capitalism and business cycles, there are agencies and organizations that coordinate certain efforts in crises etc. But capitalist society is definitely not a society based on science, as some liberals might say. And even with certain public and global organizations to prepare the society for some future events, the capitalist system is still heading for implosion and we to our extinction.

    I am not sure if technology and innovation are the main question in a socialist society of worker co-ops. Automation would probably occur to an extent. People would see the benefits of it: they could work less. But not working at all means a lot of spare time. If people would not find something meaningful to fill their time with, there would not be a motivation for more automation. Working is not only suffering, it is mainly suffering when there is too much of it, unwanted, bad conditions and no control of it. Working also gives people a meaning in their lives, it gives people something to do and social contact which most people need. Machines could relieve humans from much of the work and humans could thus work less but still enough if it gives them a meaning and enjoyment in their lives. What would be an important and difficult question in a socialist society are: how would people find meaning and enjoyment in their lives? Also regarding modern science and technology; capitalism certainly came about with the help of the modern Enlightenment but socialism is the critique of followers of the Enlightenment that capitalism is not a system that upholds the ideas of the Enlightenment, but rather a hindrance to the application of the ideas of it at the basis of the society. I truly believe that science is a central part of socialism and could be one of the main solutions to those questions of meaning and enjoyment as it can help us understand the natural world we live in which could help solve those questions and existential questions. Not to mention that it can help improve human lives in many more practical ways (medicine, machines etc.)

    I struggle especially with these following questions: How would a socialist society be cohesive but not authoritarian? What would be the functioning of the public sector – at different administrative levels (even global) – and how could its relation to worker co-ops be balanced? For example, so that no particular co-op gains too much influence over the public sector (which we see today with capitalist businesses) or state officials either (which we also see today and which we saw particularly in state capitalism). Some of our main concerns and existential threats today are global questions that needs coordination at the global level, i.e. ecological and climate management, energy and arms industry, perhaps also finance. Questions coordinated at the global level would require that there would be a relatively small group of people managing them which would give those people an immense influence. That would need to be countered in some way, probably in some sort of global cooperation/partnership. Either way, our global society is so far away from even dealing with these questions that I think it’s actually too late.
  • Nicholas Anderson
    commented 2018-01-31 20:35:40 -0500
    To be completely honest it’s important to clarify that socialism, along with every other economic process has made too many promises that have gone unfulfilled. False guarantees and empty promises are a recipe for violence and chaos that routinely lead to systems that should be antithetical with the principles of Socialists, particularly those who see it in a democratic light. So it’s important to avoid asserting that certain phenomenon economic or otherwise disappear or that economic crisis as a concept is anything but inevitable. But inevitable is not the same thing as systemic.

    Sorry not trying to lecture or anything; just an opportunity to explain and qualify my thinking. It takes time for structural changes to permeate systems and longer to change behavioral patterns. So many of the aspect of capitalist reproduction would continue to hold influence and would have to naturally cycle out or be adapted into the new systems structure. However, the approach addressing the crisis’s that permeate the cyclical process would theoretically be completely different than the reactionary chaos theory that is capitalism. In capitalism there is no effort made to prepare for future events. We rely on the market to express demand through crisis and for private individuals to allocate resources to supply it because they are incentivized by making a profit. Research and development is less about creating a better tomorrow and more about creating a new kind of demand or improving existing production; short-term profit. A socialist society has the benefit of organization be it in the form of cooperative localized communities, unions, state intervention or some combination of the three. Thus, instead of attacking distribution problems or structural unemployment by deliberately allowing a crisis to manifest itself, their would be a coordinated effort to prevent mounting problems. This is no guarantee of success. But it is better, in my opinion, that we be proactive in regard to stability rather than rely on the baser motives of greed to dictate how long we should allow a portion of our production to stagnate and atrophy to maximize returns.

    The major uncertainty at this point is what role would technology and innovation play in a socialist system. There are some that argue that automation is incompatible with the socialist mode of production simply because it is the main tool of the modern capitalist to increase productivity and to replace the worker. Others believe that the two ideas are compatible, that technology is the eventual liberator of the labor as a concept. This logic has been applied all over the world in the form of shorter work weeks. Consider the impact of self-driving vehicles. It is an innovation that has derived from the ever increasing drive for more profits. Would such an innovation have occurred naturally without this demand? Maybe, but we don’t know. It is in this way that capitalism’s celebrators argues that it drives innovation. At the same time this innovation drives unemployment and unemployment exacerbates the bust aspect of the cyclical economy. What are your thoughts? Are there other variables that you think create more prominent questions or issues to be resolved?
  • Lucas Pascalides
    published this page in Ask Prof. Wolff 2018-01-31 16:36:28 -0500