In 2010 Richard Wolff published Capitalism Hits The Fan! The Global Economic Meltdown and What to Do about It. He hosts a weekly radio show on WBAI in New York and has had wide exposure in alternative media outlets. In Democracy at Work, Wolff addresses what he feels is the most viable path to a post-capitalist society. His analysis is informed by Marxism but is relatively jargon-free. He briefly but ably discards the right-wing view that disasters such as the Great Depression of the 1930s were caused by too much government intervention – but he also takes issue with Keynesianism. He explains how, during the 1930s, under pressure from a US working class in which socialists and communists played a leading role, Franklin Roosevelt was forced to adopt social-democratic programs, financed by taxing the rich. He contrasts the response of Roosevelt in the 1930s, a response barely tolerated by large segments of the US ruling class, with that of Bush and Obama during a period in which the US working class was more quiescent.
Wolff gives an accessible overview of the financial crisis that hit in 2009 and of the current “Great Recession.” He provides a good antidote to much of the obfuscation, capitalist apologetics, and blaming of deregulation as the sole cause of the crisis that one hears in the mainstream media, and provides a deeper critique focusing on processes inherent within capitalism itself. Between 1945 and the early 1970s the standard of living of the US working class continually rose, as it benefited from a historic labor shortage. From the early 1970s on, what Wolff calls “a set of broad economic changes” transformed US capitalism. These included changes in technology, especially computerization, women surging into the labor market, and immigration, along with the feedback loops of financialization fueled by greater worker productivity combined with stagnating wages, which forced the working class to rely on credit to maintain its standard of living.
Wolff does not delve into current theoretical debates on Marxist crisis theory, such as the question of the “tendency of the rate of profit to decline.” Nevertheless, addressing the non-specialist, Wolff makes an important contribution to the public dialogue.
In the second half of his book, Wolff discusses his “cure for capitalism.” His definition of capitalism and socialism, reflecting the influence of thinkers such as Louis Althusser and Etienne Balibar, focuses not on who owns the means of production, but rather on how society organizes the production and distribution of the surplus. He contrasts the goal of working-class control with the practice of the former Stalinist states, which he terms “state capitalist” because the surplus was controlled not by the working class but rather, as under “private capitalism,” by a managerial elite. He calls for a system of “Workers’ Self-Directed Enterprises” or WSDEs as the core of a future post-capitalist society. A WSDE differs from a capitalist firm in that the employees would democratically decide on production, distribution, and other goals. The drive would be to fulfill human needs rather than to reproduce capital.
Wolff goes on to discuss relations within the WSDE and also external relations with governments, other WSDEs, and communities. He says WSDEs would usually be small-scale enterprises, often smaller than a few thousand workers, but he leaves open the possibility of much larger firms. Internally, Wolff sees a differentiation between employees directly producing a surplus (the “producers”) and workers who provide necessary but ancillary services (the “enablers”). While both types of employees would have democratic input and control over the firm’s direction, only the “producers” would vote on decisions as to allocation of the surplus. Other than this Wolff posits a myriad of ownership possibilities for the employees, including equal stock ownership and direct democracy. There would also be varying relations with governments, possibly including renting or leasing plant and equipment, as well as various tax schemes and planning methods. There may or may not be market relations with other firms.
Wolff implies that there could be a period of co-existence between WSDEs and capitalist firms in which the two sectors would compete, perhaps not unlike the period of the New Economic Policy in the Soviet Union of the 1920s. Wolff refutes the commonly held myth that capitalist firms would be inherently more “efficient” than firms organized on other bases. Indeed, he rejects the capitalist notion of “efficiency.” WSDEs would focus on what are democratically decided to be desirable human needs relating to quality of life such as workplace accessibility, health and childcare, and education for cooperation rather than competition.
One might wish for more attention to the political obstacles in the way of reaching this goal. It seems likely, from examples such as the Russian or the Spanish civil wars, that to achieve a transition to a post-capitalist society will require a titanic revolutionary struggle. Wolff alludes to such difficulties in discussing the trajectory of the Soviet Union, but the book overall seems to downplay the necessary political dimension.
In closing Richard Wolff makes an appeal to the “organic intellectuals” of the Occupy movement, those looking for a way out of the current crisis and beyond traditional “statist” versions of socialism – including also those offered by European social democracy. Democracy at Work offers a stimulating yet relatively painless read for those bewildered by most expositions of economics.
Reviewed by Kate Frey