Capitalism

Capitalism is not as productive as Cooperative Individualism/economicsI believe it is important to have the most productive economic system there is, as it will benefit society as a whole, and I don't believe it is capitalism, but rather what is known as cooperative individualism. The definition I am using for cooperative individualism, for those who do not know it, can be found here[3]. Cooperative individualism, to simplify it, is essentially an economy in which worker cooperatives are the dominant structure for businesses and corporations. A worker cooperative is basically a business which is democratically controlled and jointly-owned by all of the workers of said business/company. As you can look at in the definition of private property I provided, it excludes cooperatively owned property, which cooperatives are inherently cooperatively owned. Since part of the definition of capitalism I provided includes private property, worker co-ops are inherently not capitalistic.Moving on, let us compare the productivity of traditional/capitalistic companies with that of worker co-ops. It has been found in a study conducted by Ben Craig, of the federal reserve bank of Cleveland, and John Pencavel, of Standford University, that worker cooperatives within the plywood industry are more materially productive than traditional firms[4, pg 124]. The reasons they believe for this are because:1) "A co-op mitigates the agency cost associated with a corporation's division between ownership and control". Since co-ops are owned by the workers, they are much more likely to be informed about the business decisions than if they weren't owners, thus there is no need to spend extra time from business owners to educate them on this matter.[4, pgs 124-125)2) Worker co-ops eliminate "the separation of interests between workers and owners."[4 pg 125] As one can imagine, there are many instances in which a conventional firm would be presented with opportunities where they can make a decision that more benefits them and harms the workers. The workers would be opposed to this, and normally what happens in a conventional firm, is that bargaining goes on and this takes up precious time that could be devoted to work. In a co-op, this bargaining would not take place, since worker-owners would likely choose what benefits the majority of the workers, whereas in a traditional business, the owner would choose what only benefits themselves.3) Workers are able to monitor each other better than in traditional businesses where the monitor is a single manager [4, pgs 125-126]. This makes sense as well, since in co-ops, the workers are the ones who make the decisions of the company, and would be involved in hiring and firing other workers. Co-workers are more often among their co-workers than a manager is, so they would be able to monitor their co-workers more effectively than a manager. This provides incentive for each worker to provide their best work and not laze around.Capitalism is immoral and the antithesis of freedom1) Capitalism is theft. Under capitalism, it is inherently a system where some people get to make money off of other people's labor: that is what business owners do. Why is this tolerated? Shouldn't people only be given compensation for their own labor and not other people's labor? Is a person not entitled to the product of their labor? If a person is entitled to the product of their labor, then it is stealing for a business owner to take profits based off of what the workers of that company are doing. They should only be given compensation for their own personal work, and it can be argued that a business owner doesn't even do nearly as much for the company as the workers do.Additionally, even if you argue it is not stealing, it is still preventing other people from being able to earn more money that could take them out of poverty. The fact that a business owner takes a percentage of the profits, means the workers have a lower wage. I argue the business owner is not necessary just because of the fact that worker co-ops do exist. Here's a non-comprehensive list of some worker co-ops[5]. Thus, since capitalism promotes a system where an unnecessary person gets to take a percentage of profit that could be going to the workers and helping them out of poverty, it is immoral.2) Capitalism is undemocratic. I believe democracy is a highly-held value in America. Yet, we don't apply it to economics. Why should a business owner be able to dictate to the workers what to do without consent of those workers? Democracy is important because it gives consent to the governed. Well, a business owner is a position of power and authority. Yet, the workers are not represented at all under capitalism. It is unjust rule. Now, while a person could argue a worker chooses where they work, and thus the business owner they work under, do they really have a true choice? Have you ever tried searching for a job before? Well, first of all, it's not easy to even find out about a job, as 80% of jobs aren't even advertized[6], then when you do apply for a job, you have only a 20% chance of even getting an interview[6]. That doesn't take into account the percent of people who get an interview, get the job either. You'd likely have to apply to dozens of jobs before even getting an employer who will accept you. That's not much choice if you ask me. You're denied many choices. After such a long job search, you're forced to settle for a tyrannical or incompetent employer just because you need money in order to survive. So, how is that choice? How is that democratic?Capitalism pretty much always has an unemployment rateHave you ever heard of a capitalist society with 0% unemployment? Neither have I. I argue that cooperative individualism would help bring the normal unemployment rate you see under capitalism down, possibly to 0. As you can see here, the average number of positions or employees a worker co-op has is 10[7] and comparing it to the average for the traditional business, it is greater, where the traditional business has an average of around 5-6[8]. Since worker-cooperatives generally do what is in best interest of the workers, they always try to offer more jobs than traditional businesses would. Traditional businesses would employ the minimum amount of people necessary to get the job done, while worker co-ops, on the otherhand, would have more interest in employing people for the sake of employing them. This, in turn, would increase the amount of jobs if worker co-ops were to be the majority in a society. Thus, unemployment would decrease.Capitalist businesses are not as succesful as worker coops and pay their workers lessCooperatives are actually, in many ways, more successful than traditional business models. For example, 80% of cooperatives survive the first 5 years of being in business, compared to 41% of the traditional business model. [7, pg 8]In a comparative study performed by Gabriel Burdin and Andres Dean, where they looked into how cooperatives performed in the Uruguayan economic crisis between 1999-2001, it was found that "average employment and wages in WCs[worker cooperatives] tend to be greater than in CFs[capitalist firms]." [8, pg. 522] The wage being higher definitely makes sense, since in a worker-cooperative, there is no person at the top taking a percentage of the business profits as their own, personal, income. Instead, this income is spread across the workers, which would mean their wages would be higher. It is also the case that capitalist businesses do not have a monopoly on being the only business type that has multi-billion profit turnover. Mon dragon Corporation is the largest worker cooperative in the world and "is the tenth-largest Spanish company in terms of asset turnover and the leading business group in the Basque Country" where, in 2015, they had a revenue of 12.11 billion euros[9] I'll admit that it's true there are many capitalist businesses with greater profit turnover and are more succesful than Mon dragon. However, given my next point, you'll soon see why.Capitalism needs government intervention to survive as well as special favors from banksThere are constantly recessions and depressions under capitalism, and under current Keynesian theory for capitalism, it is necessary for government to intervene in the economy to keep it going. Do I even need to bring up how many companies the government bails out? Would there even be that many multi-billion dollar capitalist companies if they were allowed to fail and the government didn't bail them out? In short, our system favors capitalism in many ways, and I believe this is why it is sticking around: due to outside forces and not because capitalism is staying on its own merits. First, there are government bailouts. Second, banks tend to favor capitalist firms over other forms of business, even thoug, as I pointded out, coops don't fail as much. Finally, people are kept ignorant of other options. The vast majority(89%) of people can't even define what a cooperative is[10] but everyone is fed capitalist propaganda about what capitalist businesses are. Sources:[3] https://en.wikipedia.org...[4] http://citeseerx.ist.psu.edu...[5] https://en.wikipedia.org... [6] https://www.forbes.com...[7] https://www.uk.coop... [8] http://disjointedthinking.jeffhughes.ca...[9] dragon-corporation.com/eng/mon dragon-in-2015-growth-in-jobs-turnover-and-earnings/">http://www.mon... dragon-corporation.com/eng/mon dragon-in-2015-growth-in-jobs-turnover-and-earnings/[10] www.geo.coop/story/new-survey-reveals-perceptions-and-myths-about-co-opsdragon-corporation.com/eng/mon dragon-in-2015-growth-in-jobs-turnover-and-earnings/">