Alt Left: All That Glitters Is Not Capitalist: Various Types of Non-Capitalist Forms of Production That Work Well


I would argue that being pragmatic while being a communist is almost impossible. Communism doesn’t work, because humans are too greedy.

A mixture of a bunch of ideologies is probably the way to go.

If you are talking about hardcore Communism with the state running everything and no market or private enterprise as in the USSR, nobody wants to go back to that anyway. Even most Communists don’t want to go back to that.

But otherwise, you are just wrong. Most Communists nowadays see some sort of a role for a market. There are lots of ways to do this.

For instance, in Venezuela, various neighborhood groups and communities operate bread factories, farms, on and on. They sell the bread at a small reasonable profit to the community. The proceeds and profits are invested back into the enterprise and used to pay the salaries of the employees.

The farms and animal husbandry industries work along the same lines. A community will be organized as a commune. They will raise chickens for eggs or pigs or they will grow various crops.

They then sell the eggs, pigs, or crops to other communities for a reasonable profit. The proceeds and profits are invested back into the company, used to pay the salaries of the workers, and if there is anything left over, they are invested in the community itself – new sidewalks, new roads, a new health facility, water treatment, a community center, on and on.

The Venezuelan communes are considered to be a non-capitalist form of development.

Communists all around the world have supported this model. The Chinese Communists are operating a form of market socialism that utilizes a market mechanism. The Vietnamese Communists are doing the same. The Cuban Communists are doing something similar.

Most Communists also support the cooperative movement, where workers own the enterprise and compete against other firms, including capitalist firms. The enterprise either sinks or swims.

The proceeds and profits are best collected by a regional bank, which reinvests them in the enterprise, uses them to pay salaries, or even gives bonuses to the workers. So a very successful enterprise that made a lot of profits could end up having some workers who were making some good money if they were pocketing some of the profits.

When you give the workers the control over what to do with the money – whether to sink it back into the enterprise or to take it home as increased paychecks, workers tend to choose to take home the bigger checks. This is what happened with Yugoslavia’s otherwise very successful worker self-managed Communism.

The workers would not put enough money back into the firms to keep them going, and the firms would start to deteriorate to the point where they were no longer operative. So everyone was out of a job. But no worries as everyone got a bigger paycheck!

In the Mondragon Cooperatives in the Basque Country in Spain, a similar system has unfolded and has been successful for a long time now. There, the workers elect their own management, which is a great idea in my opinion. You would think that workers would elect management that let them slide and screw off, but they elect very good managers.

The decisions about what to do with the proceeds and profits – whether to sink them back into the enterprise or to take them home in higher worker wages – is left up to management and ultimately large regional banks.

These large regional banks are the ultimate owners of all of the Mondragon cooperatives. These are public banks so they are not run on the typical profit motive. They resemble more the customer-owned credit unions in the US which give much better customer service than the capitalist banks do.

I’m not even entirely sure that credit unions are a capitalist enterprise. How can you have a capitalist enterprise that is owned by the consumers of its service? That does not seem possible.

The banks tend to make the best decisions for the firm. Keep in mind that Mondragon cooperatives utilize a non-capitalist form of development.

The problem with Mondragon is that they have to compete against capitalist firms. So all of the cutthroat behaviors that capitalists engage in to reduce costs and maximize profits – exploitation of labor, shafting consumers, investors and the public at large – means that Mondragon is forced to some extent to lower their own costs however they can to keep pace with these firms.

So Mondragon is a non-capitalist system that is still privy to the logic of capitalism in which they are ensnared.

In North Korea in the far north of the country there is a lot of private gold mining going on now in new-found reserves. They are often just one man enterprises of small groups of men working together.

The state’s footprint up there is small, and the state has stepped aside and simply lets these miners mine whatever they want. They only ask for a 25% tax cut on all mining proceeds. As long as you give them your cut, it’s all good. Most of these miners would not be described as capitalists.

In North Korea and Cuba there are now farmer’s markets where farmers can bring their produce directly to farmer’s markets to sell to the public. These are generally not capitalist enterprises. These are just farmers selling the product of their labor to consumers (other workers) buying their crops. There’s no tendency to maximize profits, as the prices are set by the market.

The entire cooperative sector all around the world is a non-capitalist form of development. The workers actually own the firm so there is no exploitation of labor, which is the definition of capitalism. No exploitation, no capitalism.

In this way these cooperatives have gotten rid of the division between Labor and Capital which is the backbone of any capitalist system because capitalist systems work by marking up the products of workers’ labor and then adding onto it something called surplus value when is then pocketed by the capitalist as a profit.

So a worker producing a product that is paid say $20 in labor has his product taken by the owner of the firm, which then proceeds to mark up the worker’s labor cost to $25-30, and thereby make a profit. This is called the Labor Law of Value, and it has been proven to be the backbone of the capitalist system.

As you can see here, the worker is not getting the full value of the product he produced. He produced a product worth $25-30, and he only received $20 for it, with his owner taking the $5-10 surplus value and pocketing it as profit.

Independent contractors such as electricians, plumbers, painters, attorneys, physicians, accountants, etc. are not usually capitalists at all. Instead these are just workers – albeit highly paid workers – who are simply selling their labor time to  others, mostly workers, who purchase their labor time when they hire them or use their services.

Middlemen and traders who simply intervene between the producer and walnuts and the seller of say walnuts, adding on their profit, are not capitalists. Those are simply traders or merchants. They are not exploiting anyone. They can be thought of as a form of workers who act as go-betweens vis a vis producers and sellers, adding their small amount on as a fee for helping to get the two together.

Finance capital or people who buy and sell stocks are not usually capitalists. These are like people who trade in rare books, stamps, coins, precious metals, or anything else.

The stocks and bonds are like rare coins or precious metals. They simply try to buy them at a lower rate and sell them at a higher rate, which merchants have been doing forever even long before capitalism. They have no employees so they are not exploiting anyone.

Music groups and other performers, authors, artists, sculptors, etc. are mostly just workers who sell their labor time as performers or the product of their labor as books, paintings, sculpture, DVD’s, etc. Most of these people, even bands, do not hire employees.

Now granted the book publishers, record companies, galleries, etc. are marking up the labor time and labor products of these entertainment workers and taking the surplus value, hence they are capitalists.

A big rock music band can be thought of simply as performers (workers) who make a musical product and sell it to fans, mostly other workers, who enjoy their entertainment product so much they are willing to pay good money for it. So most bands, artists, authors, sculptors, etc. are not capitalists. They’re just workers for the most part marketing their labor time or the products of their labor time.

Now granted finance capital and speculative capital, while generally not capitalist, are nevertheless regarded as “parasitic” industries because they don’t produce anything.

They can be thought of as gigantic casinos in the sky (the stock market in particular can be seen this way). Speculative capital produces nothing and often has bad effects on society. Look at the wildly inflated housing markets on the US West Coast and in New York and Paris for example.

In China under what they call market socialism or socialism with Chinese characteristics, a Communist party cell sits on the board of directors of every large corporation. When corporations get a certain size the state usually takes them over in a sense. However, the managers have large leeway how to operate their company.

All private enterprises are underneath the state or the Communist Party. The CP sees the market or the private sector as a tool for the development of the productive forces. However, the capitalists are underneath the state. They have to do what the state says.

They have to adhere to 5-year plans. Yes, the 5-year plans that were said to be so devastating to the USSR and other Communist countries are working great in China.

The government, the party, and the private sector all work together on economic goals. In this way it is similar to the state capitalism of South Korea and Japan or even Nazi Germany.

That state capitalism is a non-capitalist form of development because the state works closely with the capitalists on economic goals which are supposed to serve the nation and not just the petty temporal demands of capital for maximal profits come Hell or high water, forget about consumers, workers, society, the environment or the nation.

Under state capitalism, the state controls the commanding heights of the economy. In Japan this boils down to a several huge banks which effectively run all economic development in Japan.

Nazi Germany was similar. Yes, you could have your corporation but you had to do what the state said, or they would just take you over and confiscate your firm. So the firms in Nazi Germany in effect all worked for the state.

In China, if firms do not follow guidelines and do as they are told, the state will simply go in and seize the firm, confiscating all of its assets. The state will then take over the firm or hand it over to  a more obedient capitalist. You see here that the state rules capital. Capital has to do what the state says.

Here in the US, the market is not a tool for the development of productive forces. Instead it is a form of politics. In other words, the market or the corporations basically run society. The market is over the state. The state has to do what the corporations demand, or the corporations will get rid of the state and put in a new state.

The state obeys the demands of capital and not the other way around. Capital, the market, and the corporations are our true rulers in the US. The government simply acts as if they are employees of capital. The state does not rule us except to the extent that it carries out ruling directives that Capital gives to the state to enforce on the people.

In China state firms are often run by local municipalities. So if we had their system,  say Los Angeles and San Fransisco might both have steel mills. These mills would then compete against each other and against private firms both domestic and foreign. It’s sink or swim for all public firms in China.

Firms that are more successful see their incomes rise and more workers move to those cities to be part of those enterprises.

The workers still officially own the enterprises, but the city takes 95% of the income that the enterprise brings in in the form of a paycheck for every worker. 95% of each workers paycheck is taken by the city and reinvested in the firm or in the city itself (similar to the Venezuelan model). The workers get 5% of their check to take home as pay.

Keep in mind that this can be a good paycheck, as cities running successful firms pay their workers more.

There are large cities in Southern China with 700,000 workers where 1/3 of the population works for one of the many enterprises that the city runs. The residents of the city, who are also workers for the city, have a say in how these firms are run.

For instance, they try to fight corruption, since it hurts the firms, which hurts the city, which hurts them in the end. So the firms of the city in a sense are under the control of the people who live and work in there in the sense that their input is used to make decisions about how to run the firms.

One thought on “Alt Left: All That Glitters Is Not Capitalist: Various Types of Non-Capitalist Forms of Production That Work Well”

  1. Actually, the internet age is a huge boost for socialism. Well, what I mean is – look at all the free software, often – as good or better – than paid solutions. Well, there’s Musescore, good enough for music notation. There is tons of free blog and forum software, two of which we are using on this site.

    Anyhow, though, as critics will point out, though – free solutions – as in no punches pulled (a free solution as a teaser to get paid) is often slow in development.

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