October 24, 2012
Vol: 19 No: 43

Interview

You’re not the boss of me, now

By Mike Wold / Contributing Writer

The historian and economist sees worker-owned businesses as a solution to economic inequality

Gar Alperovitz

Illustration by Jon Williams, Real Change

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After years of economic dislocation, recession and austerity, many people are wondering: Is there any alternative to the capitalist system? And if there is, how would we get there?

Few have the optimism of Gar Alperovitz, prize-winning historian and economist. Alperovitz, a political economist and historian at the University of Maryland, first became famous for a ground-breaking revisionist history of the decision to use the atomic bomb on Japan, documenting how that decision had more to do with gaining an advantage in the coming Cold War than with ending World War II.

His real interest, though, was whether there was an alternative to the ever-expanding world capitalist system that was put in place at that time, which we now call globalization. For the past three decades he’s researched and written about how the United States can build an economic system that is both consistent with our democratic and egalitarian values and that is ecologically sustainable.

In an interview about his latest book, “America Beyond Capitalism” (Willey, 2004), Alperovitz suggests an economy in which wealth is shared within communities and worker-owned businesses are the solution to our problem.


Explain “America Beyond Capitalism.”

It’s about democratizing of ownership, which is popping up all over the country. The press isn’t covering it, but there are something like 10,000 worker-owned companies in the United States. There are 130 million Americans in co-ops and credit unions, there are 4,000 or 5,000 neighborhood-owned corporations to benefit neighborhoods, there are thousands of social enterprises that make money and use capital for social purposes. Land trusts are another example. There are municipal-owned businesses, like the State Bank of North Dakota and single-payer health care in Vermont. What you’re doing is taking capital and turning it to democratically-controlled uses, using it for social purpose.


It sounds great, but what percentage of the economy are worker-owned businesses?

It’s a small, small percentage. But it’s still a lot. Most worker-owned companies are created when the owner retires. The kids don’t want the company, and they sell it to the workers. There are huge tax benefits written into the law if you do that. You can do it as a co-op, too.


Do these function differently from a capitalist-owned business?

Some do, some don’t. There’s an attempt from within to democratize democratic ownership. That’s one of the big battles that still needs to be fought.

One of the really interesting pieces of research on worker-owned companies shows that if you develop training [for the workers] for participation, then productivity and profits go off the charts, compared with the same kind of companies, same size, same industry, [but not worker-owned]. In Cleveland they’re teaching people how to do it, and it has an impact.


Is Cleveland where the big public institutions — hospitals and universities — decided to help the local economy by buying from worker-owned cooperatives?

Their model attempts to link worker ownership in a nonprofit structure. They can’t get up and go. And they have a fund to build their community and more worker ownership, which is very powerful and very different from just worker-owned companies. A worker-owned company operating in the market economy is under all the pressures any company is. I’m a proponent of worker ownership, but very often worker-owned companies are very insular. If General Motors was owned by the workers, they’d probably pollute as much as any of their competition.

In Cleveland there’s an attempt to get away from market domination, because [the institutions] use their purchasing power and that’s by design. You can generalize that — supposing the u.s. built our own mass transit and rail vehicles, which we don’t, we could stabilize industrial production. It’s a partially planned system. But you still use the market to keep it honest.


If worker ownership got to be a big thing, would there be a corporate opposition?

They don’t see it as a challenge at all. It’s trivial. From their perspective, it’s high-efficiency, low-cost suppliers. Over time democratized ownership [may] begin to build. So there is a possibility of strategic development rather than [the current] experimentation.

At this stage of development it’s largely because nothing else is working. People are forced to try to come up with something that works. One crude analogy is the prehistory of the New Deal, the 1920s. It all was local experimentation that became national.


In one article, you pose this as neither socialism or capitalism. It actually looks like one of the streams of socialism that was present in the 1920s and earlier.

You can find earlier precedents in libertarian anarchism or socialism. But that isn’t where it’s coming from. It’s very American; it has a very pragmatic aspect that you don’t find in France.


This isn’t happening in Europe?

There’s a long tradition of the social economy in France but it’s become institutionalized — it’s part of the welfare state. Here it’s coming out of a more activist tradition as the welfare state declines.


Is there danger that it could be institutionalized?

The European system is part of a working social democratic system. It doesn’t work very well, but it does work within the game. This is developing outside of the liberal system. We may go faster in this direction than anybody else because we have such a weak welfare state and a weak traditional left. That’s largely because of labor’s fall. The traditional liberal strategy depends on labor. That’s the muscle base of any liberal politics. The American labor movement is dying right before your eyes. It’s 11 percent [of workers] — it was 35 percent at the peak. It’s 7 percent of the private sector. It’s still going down. We’re back to 1929 — that was the last time it was [that low]. That game is over. That whole system in which corporations were balanced in part by politics resting in labor is over. It’s leaving in its wake pain, difficulty— and innovation.


But what kind of politics will develop to replace that?

That’s exactly the question: One, whether these things can develop in a sophisticated and serious way in many parts of the country; and two, whether or not the politics is built with them. It’s not beyond the realm of possibility, given the pain levels and the cultural changes that are going on. There are three polls that I’ve seen [asking] people 18 to 25 if they prefer socialism or capitalism. They’ve gotten higher numbers every time I’ve seen the poll, all slightly over 50 percent [in favor of socialism]. You would never have seen that 25 years ago. There’s something going on where people are not believing this crap.

This is practical. It turns people on. People begin to see this happening and then they begin to act, rather than wring their hands. I was in Texas two weeks ago and there were young people in worker-owned co-ops. Every place you go, you find something’s going on nobody’s covering. There’s interest in possibilities for transforming the ownership of capital in a way that isn’t statism. It isn’t self-conscious. It isn’t strategic — yet. What I’m really trying to write about is viewing it and seeing it self-consciously and strategically.


Would you look toward a decentralized economy that was based on cooperatives?

In a society of 350 million, soon to be 500 million, you can’t do co-ops everywhere. You do whatever you can at the local level and only move up if you have to. But you do have to move up — with planning systems and banking systems, for example. I’m not one of these guys that says “co-ops everywhere.” There needs to be a sophisticated design.


So there would be state intervention in the economy?

There’s no way around that. For instance, if you had a transportation plan it would require certain production and location of production facilities for large scale. Boeing — you want to make airplanes — that’s not a neighborhood corporation. 

One of the things I’ve been studying lately is the airlines cutting off service to many cities. It’s unbelievably stupid — not from their point of view — but the cities are going to go down. Totally crazy, totally erratic and totally wasteful. Unbelievably. You throw away cities, all the infrastructure. And the carbon costs, the capital costs — you just have to build the same houses someplace else. Our transportation policy is totally separate from economic policy. And that’s a planning issue, [at a] much higher level than any one community.

We have to get to that level of sophistication. If you don’t like corporate capitalism, you don’t like state socialism, how are we going to deal with the problem you’ve just identified? And I don’t want to hear rhetoric. What’s it going to look like? Why will that be better? Why won’t it turn into state bureaucracy? And how do we build it from the bottom up? What’s the design? It’s something different from vision, which is about values. How’s it all going to fit?

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