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Mutualist Blog: Free Market Anti-Capitalism

To dissolve, submerge, and cause to disappear the political or governmental system in the economic system by reducing, simplifying, decentralizing and suppressing, one after another, all the wheels of this great machine, which is called the Government or the State. --Proudhon, General Idea of the Revolution

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Location: Northwest Arkansas, United States

Saturday, July 15, 2006

A Market Without Capitalists

That's Frances Moore Lappe's phrase, in an Alternet article on Emilia Romagna (via Porcupine Blog and Input Junkie).
A market economy and capitalism are synonymous --- or at least joined at the hip. That's what most Americans grow up assuming. But it is not necessarily so. Capitalism -- control by those supplying the capital in order to return wealth to shareholders -- is only one way to drive a market.

Granted, it is hard to imagine another possibility for how an economy could work in the abstract. It helps to have a real-life example.

And now I do.

In May I spent five days in Emilia Romagna, a region of four million people in northern central Italy. There, over the last 150 years, a network of consumer, farmer and worker-driven cooperatives has come to generate 30 percent to 40 percent of the region's GDP. Two of every three people in Emilia Romagna are members of co-ops.

The region, whose hub city is Bologna, is home to 8,000 co-ops, producing everything from ceramics to fashion to specialty cheese. Their industriousness is woven into networks based on what cooperative leaders like to call "reciprocity." All co-ops return 3 percent of profits to a national fund for cooperative development, and the movement supports centers providing help in finance, marketing, research and technical expertise.

The presumption is that by aiding each other, all gain. And they have. Per person income is 50 percent higher in Emilia Romagna than the national average....

Another surprising feature of the culture is that, beginning in 1991, responsibility for social services in Emilia Romagna and other regions was transferred almost entirely to "social cooperatives."

I'm glad to find, by the way, that Lappe has a blog: Small Planet Institute: Thoughts.

13 Comments:

Blogger Econoclasta said...

Kevin:

Your example is fatally flawed. One thing is to point out how cooperatives (I know of dozens in my country, Ecuador) can be an interesting way to manage some low capital-intensive activities and another is to think that cooperatives are as dynamic and able as corporations to handle capital intensive industries such as IT, Oil and automobiles, just to cite three examples. Capital intensiveness and advanced management techniques that can only be found (for reasons fairly obvious) in big capitalist companies (the cooperatives are capitalist, to be sure) are the only way to reach an advanced industrial quality of life, which you find in Emilia Romagna (I was there 3 weeks ago) because it is integrated to Milano, Rome and the rest of the World. So, we can chose any "production mode" as we want (the CCCP did, too) but we need to apreciate what is sustaining us and it may very well be coming from outside, as in those cases. Let's be grateful to global capitalism, or to reality, for that matter....

July 15, 2006 12:38 PM  
Blogger donald said...

Hmm. Actually, Emilia Romagna has a variety of capital intensive industries, and it developed its economy through "advanced management techniques" pioneered by the Gramscian communists who've been continuously elected in the region for half a century, and militant unionist workers who started their their own small shops and cooperatives.

Emilia Romagna is one one of the most fascinating economic regions on earth, and I suggest that before dismissing it readers study it a bit.

Piore and Sabel have done some excellent work on it.

And what are advanced management techniques? Is that when you pay people with no experience and a ridiculous degree 100 times as much as a skilled worker to ape vapid management fads and then outsource to China? That's the appearance in the US at least.

July 15, 2006 7:57 PM  
Anonymous Anonymous said...

Did Econoclasta seriously just write that the cooperatives (where workers control the means of production) are "capitalist"?

Looks like a few minutes with a dictionary are needed..

July 15, 2006 8:27 PM  
Blogger Kevin Carson said...

This comment has been removed by a blog administrator.

July 16, 2006 11:44 AM  
Blogger Kevin Carson said...

Econoclasta,

What donald said.

You treat capital intensiveness as a given, rather than something influenced by state intervention in the economy. I would contend that the economy is heavily skewed by state intervention toward capital-intensiveness, high-tech, and skill-intensive forms of production.

Absent state subsidies to capital-intensiveness, concentration, and economic centralization, I expect we'd see an economy far less centralized, oriented toward small-scale industrial production for local markets. The kind of production technology that would entail (small factories with general-purpose machinery for short production runs) is detailed in Kirkpatrick Sale's *Human Scale*.

From everything I've ever seen in a large corporation looking from the bottom up, their "advanced management techniques" resemble those at Gosplan. They have very nearly the irrationality and short-sightedness of planned economies. State intervention has promoted corporate size far beyond pareto-optimal levels, so that the diseconomies of scale far outweigh the economies; they're able to run a profit both because so many of the diseconomies are externalized on the taxpayer, and because state cartelization reduces the competitive disadvantage of inefficiency.

Even relatively sensible stuff (like reeingering and Tom Peters' self-directed work teams), in the 10% of cases where it involves more than slogans and lip-service, is just a second-best expedient for duplicating the responsiveness and internalization of incentives that exist naturally in small, worker-managed enterprises.

Big corporations and most of what you call "globalization" are effects of state intervention.

For another take on those "advanced management techniques," you might check out my essays "On the Irrationality of Large-Scale Organization" and "On the Superior Efficiency of Small-Scale Organizations" under Favorite Posts on my sidebar.

Anonymous,

I think Econoclasta is using "capitalism" in a different sense--simple private ownership.

July 16, 2006 11:44 AM  
Blogger Jesse said...

The most interesting thing about Emilia Romagna isn't the sheer number of worker-owned and -managed businesses. It's the way those co-ops and other very small enterprises cooperate with each other to produce precisely the sort of manufactured goods that in other regions are made by large corporations. It's a radical experiment in replacing hierarchies with networks -- and while the local Communist governments have been happy to facilitate the process in various ways, it emerged from below rather than from above. Indeed, it basically began with almost piecework-style subcontracting from the big corps -- classic capitalist behavior -- and took off when the little shops started cooperating with each other as well as the giants. At that stage in northern Italy's history, the red rulers had begun to pay lip service to decentralization, self-management, etc., but retained their capacity for repression and bureaucracy.

Here's a good paper on the phenomenon:

http://www.bcca.coop/pdfs/BolognaandEmilia.pdf

There have been some efforts to bring this model of manufacturing to the States. I described a recent example in this brief article:

http://www.reason.com/0602/ci.jw.outsource.shtml

In general, the Italian co-ops are very entrepreneurial, very dynamic, and very different from the classic stereotype of the low-budget, low-tech, crunchy cooperative.

July 16, 2006 1:59 PM  
Blogger Kevin Carson said...

Jesse,

Thanks for the links. The small-scale origins you describe remind me of Jane Jacobs' story of bicycle factories in Japan.

For some reason, it makes me wonder how feasible a worker takeover of, say, Nike's sweatshops would be, followed by networking among the sweatshops and their materials suppliers. Considering the enormous markup between production cost in the sweatshops and Nike's retail price, could they cut out the middleman and sell cheap but high-quality shoes to peope in their own region, while increasing their own wages? If so, Nike might find the "outsource everything" mantra backfired a little.

July 16, 2006 10:21 PM  
Blogger eugene plawiuk said...

Interesting I found this article at GNN and blogged about it too

July 17, 2006 6:23 AM  
Blogger alan said...

Econoclasta's comments are pretty lame.

Another matter, there is entirely too much emphasis on the role of the Communist Party in the development of the Emilian model, an emphasis that is very much taken at the expense of progressive Christian Democrats, Catholic parties and Catholic unions.

July 17, 2006 6:53 PM  
Anonymous Wild Pegasus said...

I don't see where workplace democracy solves the knowledge problem of large-scale enterprises that Kevin has highlighted. Bosses may know little, but I doubt a majority of workers do, either.

I'd be interested in how much cooperative welfare there is in the region.

- Josh

July 18, 2006 6:11 PM  
Blogger Kevin Carson said...

Josh,

Where the workers have the advantage in knowledge is their own work processes, and how to improve them. The disadvantage of the bosses is the difficulty of aggregating this distributed knowledge, which becomes more difficult and costly the larger the organization and the more rungs of hierarchy. Another advantage of worker self-management concerns the agency problem--workers internalize more of the effects of their own actions.

July 18, 2006 11:44 PM  
Anonymous Unprivileged said...

Hi there Kevin,

Just out of curiosiry, would you consider the cooperatve market economy in Emilia-Romagna an existing form of Mutualism? Is there any studies regarding the degree of State intervention in the economy of Emilia Romagna, compared to other Corporate Capitalist governments?

July 18, 2010 10:30 PM  
Blogger Kevin Carson said...

Unprivileged: I'd say there are features of E-R that are extremely mutualist-ish, and that there are more economic relations of a mutualistic nature than is the case in the great majority of industrialized area.

July 18, 2010 11:16 PM  

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