Communism and Corporate Democracy

In an effort to convince you that my new $19.95 book is actually worth a lot more than that, I’m blogging some excerpts. Today, the importance of corporate democracy.

What can we learn from communism? I realize that, for many people, learning from communism is like listening to the devil. But that’s intellectual laziness, dismissing something without fully understanding it. So bear with me.

For example, our capitalist systems have shed many of the extreme injustices that characterized them in the time of Marx. But it’s still the case today that ownership of the means of production yields a kind of economic power over the workers who depend on the owners and who are forced to sell their labor power because they don’t have means of production of their own.

This dependence results in economic uncertainty and possibly poverty, because of the competition between workers trying to offer the best deal to employers. The fact that no modern economy has full employment makes this competition inevitable, even though today it’s more an international than a national competition. The “reserve army” now seems to be stationed abroad. International outsourcing (or the threat of it) pushes wages down.

We should also acknowledge that economic dependence in a system of private ownership of the means of production can be psychologically detrimental in the sense that it makes creative productive activity, self-expression and self-development (which require the free use of means of production) very difficult if not impossible. Moreover, it means that people are forced to work in systems based on discipline, supervision and control. Corporations have become islands of authoritarianism in a democratic world. If democracy and self-government are important in politics, why not in business?

Given the importance of work and production in the life of an individual and their potentially beneficial role in personal self-development, and given the importance of democracy and self-government, it is justified to give people a say in the way in which the means of production are used. The owners of the means of production should not be entitled to decide unilaterally on the conditions, organization, purposes, processes and meaning of production. Production is an important part of human life and people should have a say in it.

Concretely, this means a kind of corporate democracy and corporate participation. Participation, not by the shareholders (corporate democracy is today mostly viewed as a right of shareholders), but by the people directly involved in production, i.e. the “workers”.

Communism traditionally proposes the end of the employment relationship (or the right to rent people) and the common ownership of the means of production as the ways to achieve this participation and to abolish so-called alienation (which means working for a wage, or working in an obscure system of division of labor, rather than working for a product). The workers in the factory, rather than the capitalists or the shareholders, would own the factory and all the assets in common. Or, more correctly, society as a whole, which in communism means the class of workers, would own the totality of all means of production, because otherwise the workers would be tied to one specific means of production and wouldn’t be able to switch freely to another one.

This would obviously spell the end of private property, not necessarily private property as such, but in any case private property of the means of production.

This is unacceptable because private property is an important value. It’s unequal distribution should be criticized, as well as the exclusive right of decision of the owners of the means of production, but there are good reasons to keep the right to private property more or less intact.

Common ownership of the means of production, as proposed by traditional communists, is not the only means to create corporate participation and worker control over production. Communism should simply mean the community of workers in a factory or corporation deciding more or less democratically on their work. Modern-day capitalism has in some cases reconciled private ownership with large measures of worker participation. Many decisions in companies are now taken by the owners and the workers together. (This participation is not incompatible with the free market either. A free market is a system between economic agents, not within them). But we should try to go further and extend and deepen this participation in order to make production and work more meaningful.

Private property of the means of production should not be understood as an absolute right to govern the workplace dictatorially. And the abolition of private property is not a prerequisite for corporate democracy. This is evident if we take a look at historical cases of communist rule, where private property was abolished (to some extent) but corporate governance continued much along the same lines as in capitalism. The bosses changed – autocratic party members and government bureaucracy instead of capitalists – but the workers didn’t have more influence.

This proves that corporate democracy requires something more than or different from common ownership. Private ownership, strictly speaking, gives the employer only the right to label someone a trespasser.  So abolishing ownership will not, of itself, change how production takes place. Changes have to occur, not on the level of the ownership of the means of production, but on the level of the organization of production.

You can buy the book here. More about Marx here.