Richard Wolff's talk on worker coops

These two videos by Richard Wolff are highly deceptive, especially using emotional appeals without explaining causation. He uses the term capitalism as a catch all for corporatism, crony-capitalism, and state-capitalism, without separating it from free-market capitalism. His major issue with capitalism appears to be effects of state influence on markets, with a solution of more state influence to correct prior failures. Wolff's overall argument is an attempt to create a form of palatable socialism. Wolff early in the video talks about historic Shaker co-ops, but leaves out the disaster of collective ownership at Jamestown[1]. Americans are fearful of collective ownership with good reason. Religion based collectives used the power of the state to enforce religious ideals which in many cases included economic rules[2]. Early Americans understood that state power should not be used to enforce religious mandates. Religious freedom led to America being initially built on rugged individualism, a philosophy that promoted individual achievement over religion. Collective ownership that gives each worker the same equal vote in decision making is doomed for failure. A worker with great experience is treated as an equal to a newbie will a few hours on the job, both in ownership stake and decision voting. This is completely against basic ideas of fairness, justice, and especially property rights. Wolff ignores the role of entrepreneurship in the success of an enterprise. A key factor driving entrepreneurs is ownership, this rewards success and punishes failure with loss of risked capital. This risk factor is removed from collective owned businesses especially by the newest hires. Entrepreneurs have a complicated task a recognizing a market opportunity then coordinating other factors of production to supply a market offering before another. This combination of risk and reward create a system where consumers are the real winner since entrepreneurs are continually attempting to satisfy wants and needs. Wolff late point in the second video drives right to Marx, seize the means of production. Wolff does not us those words but is what he means when he states that government should purchase companies and transfer ownership to workers. Government creates nothing and everything it has is seized assets. Therefore, using government money to purchase companies is seizing the means of production through force. Democrat control of worker ownership is lunacy Democracy is a favored buzz word of modern socialists, but America is not a democracy. America is a representative republic. America's founders knew that autocracy and democracy can be equal in the amount of tyranny on minorities. So, created a republican government where tyrannical majorities would be constrained. A business organized as a collective with democracy as the decision making system will have difficult time to attracting top talent. Talented people want to be rewarded for addition effort and in systems of one worker, one vote achievers are treated as nonconformists. In other words, lower end workers view high achievers as Blue Falcons [3]. Thus high achievers will find other companies for employment. New or less skilled workers will have the same voting rights as veterans or high skill workers which ignores ideas of fairness. If a majority of employees have lower skills, decisions will be skewed to favor the less skilled. Property rights are another huge problem with this co-op idea. Each position has property rights which includes all rights of ownership, including transfer and sale. This could manifest in a long time with worker, significant human capital, hiring a substitute worker at a much lower wage. While the original worker maintains ownership and voting rights and pursues other opportunities. The original worker has property rights over the original job. Another property rights issue could be where a worker sells voting rights and profit income to an outside person for great quick financial gain to earn a smaller salary from the new position owner. With property rights these situations, plus many others are possible. Fundamental misunderstanding of entrepreneurship "The entrepreneur is the driving force of a market economy. It is the entrepreneur who judges that something is missing in the market, and decides to start a new business or develop a new product the entrepreneur uses savings (either personal or borrowed from capitalists) to hire workers, rent land and equipment, and purchase raw materials, electricity, semi-finished goods, and other inputs the entrepreneur then gives instructions to the hired help to use the tools, machinery, and inputs to produce goods and services which in turn are sold to customers."[4] Entrepreneurs plan and execute projects to product market offerings that require actions by land owners, labor, and resource owners, therefore a form of specialized labor with additional risks and rewards. These individuals that are willing to risk their own capital are the driving force in growing economies. Without risk taking entrepreneurs economies will stagnant and grid to a halt. Palatable Socialism This is Wolff's real goal, that is to sell palatable socialism. Most people just hear the word "socialism" and immediately reject the idea, but when defined as "democratic control of the means of production" then people might warm up to this gentle form of socialism. Most people mistakenly think democracy is a good idea that America was built upon. America is a representative republic not a democracy. America's founders understood the tyranny of majority rule therefore created a republic. Socialism has traditionally been defined as "any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods" and most Americans understanding collective also meaning government. Wolff uses "workers" instead government as "collective". Worker run/owned business appears to be different than government controlled/owned business. Inequality A favorite subject of Wolff is inequality which he lumps income and wealth inequality into one moral issue. When he turns this issue into morality, a rational person would ask "what are some sources of moral and immoral income?" Moral income would be from engaging in voluntary exchange. While immoral sources of income would be from theft, coercion, fraud, or special favors from government. Most everyone considers the first three as immoral, but government favors depends on the receiver. Wolff states many times in the video about how the rich get special favors yet never states that the favors should be ended. He wants them expanded to other groups. The best solution is to repeal any law that favors one person or group over another. Thus, separating state and economy much as religion was separated hundreds of years ago. Sources 1. https://www.cato.org... 2. https://www.loc.gov... 3. http://www.urbandictionary.com... 4 https://mises.org...