What’s wrong with capitalism?

The core of capitalism is leveraging existing capacity to get more capacity. The way this expansion is achieved is usually either through exploitation (e.g. paying someone less than the value of their work, and taking the difference as profit) or extraction (e.g. taking something of value without regard for the negative effects of the process of taking). It’s a highly complex set of economic processes based on the simple premise of profit-making.

Some see inequality and exploitation as an acceptable cost for the materialistic benefit we receive from capitalism.  However, it is becoming impossible to ignore that capitalist processes are causing human suffering on a massive scale, and rapidly making the planet unable to support human life.

Why socialism? Isn’t that problematic?

Socialism has a rich history, filled with successes and failures – spectacular in both directions. 

Capitalist powers have killed millions through war and starvation, in addition to some remarkable technological feats. So let’s be clear: the reason the word “socialism” has a negative charge is because capitalists have spent millions of hours and billions of dollars trying to discredit it.

Socialism simply means that workers collectively control every part of the process of production, and that they deserve to do so because labour creates all value. At its best, socialism is a way to put economic activity as a whole to work for the good of humanity and the ecological systems that sustain it.

We acknowledge the limitations and mistakes of previous versions of socialism. But we think there is value in building on that tradition, learning from it, and adapting the best of its efforts to prepare us for the intersecting crises of our time.

Entrepreneurs doing socialism? Isn’t that contradictory?

If entrepreneurship is defined as profit-seeking, then yes. But if entrepreneurship is defined as the creation of value and the creative act of meeting the needs of people by organizing production and distribution, then no. Entrepreneurship of this kind is the very heart of a socialist economy.

Do you need to be so confrontational?

The wars, inequality, unnecessary mass suffering, and climate catastrophe unleashed by global capitalism are real. If a house is on fire and you know who the arsonist is, it is equally important to stop them from lighting more fires as it is to put out the current blaze.

This isn’t personal. While there are many who identify with the pursuit of profit, we don’t think anyone is a bad person for taking part in capitalism per se. We seek to allow individuals to understand themselves as a part of a system and provide them the opportunity to choose if they want to be a part of that system. 

What’s the difference between a socialist economy and a solidarity economy?

The solidarity economy has its roots in the Global South – Brazil among others – where it was a way to distinguish grassroots economic activity from traditional socialism, which focused more on government-centred approaches that emphasized the public sector, nationalization and centralized planning. The latter approach has tended to feature bureaucracies and a lack of democratic input and oversight, which is one of the tensions between the solidarity economy and socialist economies.

The approach is much the same in the US and Canada. However, because socialist movements are so marginal, the implicit contrast of the solidarity economy tends to be counterposed to centralized public sector services that were won by popular movements. . For example, public health care in Canada was won by social movements, but its administration has been characterized by centralized bureaucracies dominated by the economic elite, leading to erosion of both services and confidence in health institutions.  

In the context of a public sector that is being eroded, cooperatives – sometimes referred to as the solidarity economy – are being called upon to fill the gaps. This often means jobs that have less security and lower pay than public sector work. In many cases, operations that are called the “solidarity economy” end up being part of what we call the “Non Profit Industrial Complex” (NPIC): a web of organizations driven by the passion (and compassion) of their employees, competing for government grants and foundation funding. 

In the NPIC, low wages, lack of union representation and flimsy job security are often justified using the language of social innovation — responsiveness to community needs, democracy, and creativity. Consciously or not, they are part of an agenda to tear down what is good about public services, which were the reasons movements demanded them in the first place (universality, workers rights, high standards, good paying, stable jobs) by using the things that no one asked for but which the capitalist class imposed for its own reasons (heavy layers of administrators, centralized institutions and so on).

In the North American context, the solidarity economy is often pitted against what is left of social democratic institutions – unwittingly or otherwise. While solidarity economy movements are full of conscientious people who are aware of these dynamics, the tensions are real, and serious practitioners grapple with them regularly.

So why are you talking about a socialist economy?

For us, declaring support for a socialist economy is a way of saying that we want the universality and redistributive function of public services while creating a vital web of local democratic institutions that mobilize the creativity, priorities and problem-solving abilities of local communities.

we’re declaring our intention to find a pathway to producing all of our society’s goods and services through means that reflect the power of workers, and of communities. Where land, intellectual property, housing and production are managed as a commons for the benefit of all, not for individual profit, pools of capital, hedge funds, the rich, or a corporate elite.

So you’re opposed to the solidarity economy?

We are in solidarity with the solidarity economy, and we participate in it enthusiastically. We are critical of some of the tendencies within it, and more importantly of the forces that seek to co-opt its vitality for less than noble ends. 

We all live contradictory lives and exist within institutions that are profoundly compromised in one way or another. 

Our goal is to create a clarifying current and identify what we think is the only real choice in the face of ecological, social and economic crises: to declare our intentions and create plans to totally transform the system before it destroys the planet and its ability to sustain life.

Aren’t cooperatives politically a mess?

In Canada, we have to make distinctions between consumer cooperatives of various sizes, credit unions, and worker cooperatives. There is a veritable gulf between worker cooperatives, which are small and tend to be under-resourced, and other types of cooperatives, some of which are multi-billion dollar businesses. 

Worker cooperatives are a progressive force, albeit a small one. 

Consumer cooperatives are only as politically progressive as their active membership. Often they are captured by a professional class of administrators who will be familiar to people who deal with political parties.

While we are critical of the ways many cooperatives have failed to participate in the creation of pathways away from capitalism – or even its worst excesses – we have to still note that even the worst cooperatives compare favourably to their private sector counterparts by many metric (e.g. longevity, environmental impact, progressive internal policies, support for community initiatives, etc.).

Don’t worker cooperatives just end up self-exploiting?

It’s true that many worker cooperatives are born from desperation: businesses that are closing or failing, taken over by workers, or workers trying to make ends meet in businesses with razor-thin margins. There are examples of cooperatives paying their worker-owners less than minimum wage, and it’s not pretty. Competing businesses will usually treat workers as disposable and cut corners on workplace safety, product quality or workplace and environmental conditions further up the supply chain.

These are strategic challenges that have to be considered and addressed by worker cooperatives. To be successful in traditionally low-margin sectors, they must in one way or another defy the “race to the bottom” of marketplaces where price and quality are the only criteria for buyers. Usually this means weaving a web of solidarity – it could be an urban land trust that provides lower rent for a commercial space, consumers who are willing to pay a premium for ethical sourcing, loyal customers who are part of a cultural or political movement, or any number of other factors that can insulate businesses from the instability and brutality of the dominant market. 

There are also opportunities for worker co-ops to form in higher-margin sectors like IT. If they can get access to financing, capital-intensive industries like manufacturing could open up to worker cooperatives. If successful, they could become powerful weavers of the web of solidarity.

It comes down to strategy, and using solidarity to defy the flattening effects of price competition.

But you’re not saying cooperatives – even worker cooperatives – are the force that can transform society, are you?

We think they play a key role. Unions and workplace organizing are the places where conflict between workers and capital is most direct: where people who are exploited confront their exploiters and seek to change the balance of power.

Worker cooperatives are directly affected by the wages paid in the sector they work in because it affects their margins. They have a direct economic stake in supporting workplace organizing, particularly in businesses that are their competitors in the marketplace.

Worker co-ops are not on the front lines of labour organizing, but they do have control of their business, how it is structured, and how they allocate their resources. This means that they have a potentially greater role to play in formulating a strategic vision and policy agenda for their sector.

For example, the worker owners of New Roots are setting new standards for what workplaces should look like in tree planting. Some of their members are also part of the Tree Workers Industrial Group (TWIG), a network of tree planting workers that seeks to improve conditions and wages – and establish unions – in for-profit tree planting companies.

Consumer cooperatives can play a major role as well, particularly due to their large scale. However, the political culture (or lack thereof) around them is the current major obstacle.

How can I get support for my project? 
Send an email to projects@socialsteconomy.ca. We will work with you by assessing your needs and connecting you to experts in the field.