There are several systems of government that have been tried over the years and decades. Some of them offer specific benefits while others turn out to be completely unstable for societies and nations. In this essay I consider Wolff’s criticisms of the capitalist system in the US, and the viability of the alternative he proposes in the cooperative model of Mondragon, Spain.
An interesting point that Professor Richard D. Wolff mentions is that previously, times were better and the unions were on the rise. Even though there seems to be more systems of support today, they are not as effective. In the beginning of the 19th century, the unions were very effective and served people. Then, the government created social security and the benefits were much greater than today. The modern government focuses on relationships between individuals, businesses, countries, and continents in terms of how the resources are being used in order to meet the wants of people. There is a lot of emphasis on the forthcoming of total spending into the economy and its repercussion on the output, whether negative or positive. In the beginning of the 19th century, there was a labor movement that is described by the organized approach from people to the businesses and governments. The population requested better conditions, and the nation had the support of socialists and communists, as these parties were strong and gave the people needed support through demonstrations and mutual cooperation.
The major decision made was that the government went to the businesses and agreed on a deal. The businesses would give their resources to the government and their trade off was that there was a guarantee that capitalism will be held back. Governmental supports, banks and loans are all part of the system of such cooperation. Unemployment became even worse, as people were separated into those with great resources and those who were on the poverty line. Professor Richard D. Wolff reminds us that Roosevelt was a major figure who took care of things. The working class was separated into two parts. One was in support of unions and the other was given benefits. These were not two distinct classes, but existed together – In the last 50 years, the percentage of the taxation to the government has drastically changed. Previously, the businesses had to pay a dollar and a half for every dollar that the government received from individuals while presently, the businesses pay only twenty-five cents. Another significant point that Wolff makes relates to the cooperation between America and the Soviet Union. This took place before the WW II but did not bring any results because Joseph Stalin was much different, from the message that got to the United States. Wolff offers to bring back unions, so that they are made stronger in support of the greater society.
He stresses that modern economics, social powers and political parties should learn from history. A Spanish corporation called Mondragon is brought in as an example. The people who work at an organization want to be a working family that is united by values and common goal to work and make money. The employees have a share in the company, so when decisions are made, everyone has an input. This makes the business much more personal but at the same time, the decisions are unified which makes people one strong force. People at Mondragon have many skills and they know how to work all kinds of machinery. This way they have a stable employment and they are able to give back to the community. They get to vote whether their managers can keep their jobs.
This fact provides ultimate job security and the bosses cannot make more than 5 times the average worker. This sort of philosophy is very beneficial but it does not get enough of attention from the modern society. Because the system and the way to conduct business are so unique, many people are cautious as to the future of such an organization. One specific feature of the business is that it defines the atmosphere and the group of people who live and work in the area. There is complete absence of animosity or corporate hierarchy, which allows for better communication, and energy is not wasted on unnecessary stress. The employees have a high work security because the population and the government depend on the corporation to provide products and services to the public. This leads to high output and makes people happy.
It is a rule in capitalism that the higher the cost, the higher the prices, and in case it costs more to manufacture a product than sell it, then there is not enough output for the employer to hold an organization and pay salary to the workers. It is possible to decrease the price, which will lead to more spending and the total number of goods sold will be much higher. In the cooperative profit is not the major concern. The way Richard Wolff talks about politics and the work of corporations is very convincing and definitive. The concrete examples of the past and present demonstrate a perspective that allows comparing and seeing what functions well within a society. Unfortunately, there is also a problem of the inability to look deeper into the situation and predict or prevent.
From one perspective, it would be better to rely on governmental allocation of resources and economy support, but people must also be given an opportunity and ownership rights. It is a great idea that Mondragon does not only provide benefits to the employees, they receive bonuses and profits from sales of products as well. The pension of the employees is much higher and provides for stable future. This environment puts people in a position that gives a sense of self-assurance. Very often, one supplier can overtake one kind of technology or production and thus, determine the prices and output. But in Mondragon, there’s a system which is set up in such a way that cooperatives cannot compete. This was reached by the unique politics of the organization. Mondragon is involved in so many fields of production, there is even manufacturing of washing machines, and this makes the internal politics and adds stability to the company. The hierarchy is not controlled by managers but by workers, this guarantees equality among staff.
Presently, several places in the world do not believe in capitalism. The governments control the demand and supply and hence drive the economy either uphill or downhill. Nonetheless, there are avenues that are analyzed for better cooperation between the population and the government, especially businesses. The mutual support will make sure that the public receives proper products and services and the government will have a population that is happy and does not cause stress. For this case, it has to focus more on the total demand side, as it injects more funds into the economy increasing the investments and eventually the whole economy. Unity between corporations is important because it brings a sense of common goal and people become more connected. Everyone is employed, so people feel secure and needed.