Skip to main content

Jacobin - February 18, 2020

On Monday morning, Jeff Bezos announced the creation of a new $10 billion environmental foundation, the Bezos Earth Fund. This is on top of the $2 billion he already committed to the Bezos Family Foundation to build preschools and fight homelessness.

The combined sum might be a fraction of his net worth, and Bezos might have a history of standing in the way of political efforts to address some of the same problems he seeks to address with his charity. Even so, many would argue that his efforts are still praiseworthy.

In a Martin Luther King Jr Day discussion with Ta-Nehisi Coates, Alexandria Ocasio-Cortez  argued for a very different perspective. If Jeff Bezos “wants to be a good person,” she said, he should “turn Amazon into a worker cooperative.” She argued that our primary message to billionaires shouldn’t be that we want to redistribute their money. Instead, it should be that “we want their power.”

In making this distinction, Congresswoman Ocasio-Cortez was giving voice to an idea with deep roots in socialist thought — that the unequal distribution of wealth is just a symptom of the deeper problem of the unequal distribution of economic power.

To see her point, take one of the most often cited indications of wealth inequality — that the average American CEO makes 265 times the salary of the average American worker. (This is actually one of the more conservative estimates. An analysis released by former Minnesota congressman Keith Ellison puts the differential at a staggering 339 to 1.) Where nonsocialist progressives typically think that the proper solution to excessive inequality is redistributive taxation, socialists think the underlying issue is a matter of who gets to set pay scales in the first place.

An interesting piece of real-world evidence comes from the example of the Mondragon Corporation in the Basque region of Spain. With eighty-five thousand worker-owners, it’s the largest worker cooperative in the world today. The average Spanish CEO makes 143 times the salary of the average Spanish worker. Even in a business environment where Mondragon has to compete with traditional hierarchical businesses that can lure skilled managers away with higher salaries, the maximum pay differential between the highest-paid executive and the lowest-paid worker allowed by Mondragon policy — set by the General Assembly, where all eighty-five thousand workers get a vote — is capped at a paltry six to one.

I’ve been a socialist for long enough that I can remember a time when hearing one of the highest-profile congresswomen in the country advocate the transformation of big businesses into worker cooperatives would have been unthinkable. I find the change refreshing. Unsurprisingly, not everyone shares this reaction.

The Libertarian Critique

Michael S. Rozeff argues that since Amazon workers who “made wage bargains with Amazon and didn’t form a cooperative” were freely choosing the first course over the second one, if Bezos is a bad person for not restructuring Amazon as a worker cooperative, his employees share the blame.

Liz Wolfe at Reason claims in her response to Ocasio-Cortez that a cooperative form of organization “is unlikely to work for a company of Amazon’s size.” She backs up this point by quoting an older article by John McLaughry that claims life in “[a]n unstructured participatory workplace” can lead to “problems of severe emotional intensity.” He mentions “rage, tears, splitting headaches, and other real stress afflictions.” McLaughry concedes that such experiments might work despite these problems in cases where “everyone involved comes from a common cultural, ethnic, racial, or political background,” but he says that “success can be close to impossible” when this is not the case.

Putting Rozeff, Wolfe, and McLaughry’s points together, we get the following objections to converting Amazon into a worker cooperative:

  1. Despite the unviability of cooperatives, if Amazon’s workforce preferred a cooperative form, they would have formed a cooperative to compete with Amazon.
  2. Even if cooperatives are generally viable, Amazon is too big to function as one.
  3. Amazon workers are too diverse to handle democratic decision-making together.
  4. The transition to democracy in the workplace would be too stressful and upsetting for Amazon workers to handle.

An obvious problem with the first point is that it ignores considerable barriers to entry. Research on worker cooperatives shows that they’re at least as efficient as other firms. Once they get going, they do about as well and last about as long as regular capitalist businesses. The problem isn’t a higher death rate — it’s a considerably lower birth rate.

There are many reasons for this, but an obvious one is that it’s easier to attract investors for a new business if you can offer them ongoing ownership shares. That’s why Karl Marx praised worker cooperatives as “great social experiments” that provided a valuable proof of concept that it was possible for “modern industrial production” to take place without a division between “a class of masters” and “a class of hands,” but he said that actually transitioning to an economy based on workplace democracy would require political struggle.

The second objection makes sense — if we assume, as Wolfe and McLaughry seem to, that turning Amazon into a worker cooperative would mean “unstructured” participatory workplaces — endless mass meetings striving for consensus on every issue. But there’s no reason to assume this. Workers (at individual fulfillment centers and throughout the company) could elect a management structure in the way that they do at Mondragon. ...
Read full report at Jacobin