Under capitalism, your boss can fire you, but you can’t fire your boss. Under socialism, workers and their representatives hire and control capital. If there are bosses—in a looser, administrative sense of the word—workers can fire them. The workplace is democratic and directly responsive to the needs of those who do the work.
Examples of such enterprises exist today. They are called worker cooperatives. Today and in history, socialists have articulated and explored similar concepts such as workers’ self-management, workers’ councils, and workers’ control. Others in more business-oriented contexts refer to such enterprises as democratic employee-ownership.
Worker cooperatives are enterprises that operate according to one worker, one vote. This can mean anything from workers themselves periodically electing a board of directors to small workers’ collectives deciding overall enterprise matters together. It is common to hear of capitalist firms where the ratio of highest-to-lowest paid workers is over a thousand to one. Among the largest worker cooperatives such ratios rarely exceed eight to one. Besides far more equitable pay ratios, in worker cooperatives those who do the work have a voice. And more than a voice, they exercise decision-making power in their capacity as workers.
The largest worker cooperative in the world is Mondragon in Spain. Founded in 1956, Mondragon is directed by 80,000 worker-owners. It is one of the largest firms in Europe. Spain itself possesses approximately 20,000 worker cooperatives. In Italy, 40 percent of the gross domestic product of the northeast Italian region of Emilia-Romagna is made up by cooperatives of various kinds. In Japan, the Seikatsu Consumers’ Club Cooperative comprises 600 worker cooperatives, with more than17,000 worker-owners. From the 1950s until its fall in 1990, Yugoslavia possessed a full-fledged system of workers’ self-management. During this period, Yugoslavia’s economic system was often presented as a third way between U.S. capitalism and the Soviet command economy.
By contrast, the United States has approximately 300 worker cooperatives. Since the 2008 financial crisis, there has been growing interest in creating more.
A number of cities have turned to worker-cooperative development as a means of addressing income inequality and growing wealth disparities. Since 2014, New York City’s municipal government has invested approximately seven million dollars in the development of worker cooperatives. The city’s worker-cooperative sector has almost quadrupled from 20 worker cooperatives to nearly 80.
Jackson, Mississippi, has reignited interest and hopes for municipal socialist strategy, with cooperative development being a cornerstone of Cooperation Jackson’s Jackson-Kush Plan.
What can democratic socialists do to build the worker cooperative sector? Many might say, “Start a worker cooperative,” but the financial and emotional costs of starting a new business can be heavy. Another route is to promote the conversion of existing enterprises into worker cooperatives. The United States is in the midst of a new employment crisis, but one not at the hands of multinational outsourcing or the introduction of advanced technology. More than two million baby boomer business owners are retiring over the next ten years. With few buyers and few inheritors, twenty-five million people could be unemployed. Democratic socialists can use this demographic development as an opportunity to convert such businesses into worker cooperatives. Instead of 25 million workers unemployed, democratic socialists can create policies and conduct direct outreach that translates into 25 million workers taking direct control over the means of production.