Too much of the political conversation is centred around distribution. For the left, this means steeper rates of progressive taxation and social spending. For the right it is the inverse, lower taxes—particularly at the high end of the wealth pyramid—and reduced social spending. The specific rates and policies have shape-shifted over the years but this dichotomy sets the parameter of political debate in the main. But it is a shallow dichotomy which provides tremendous benefit to the economic elites because it does not lay a finger to the seat of their domination. Let’s remember, how the pie gets sliced is almost irrelevant next to who owns the oven.
If there is one Marxist teaching that is conveniently taboo in mainstream discussion, it is that wealth and power exist first and foremost as economic relations. After Jeff Bezos’ joyride into suborbital space, the first people he thanked were his employees and customers who unwittingly “paid for all of this.” Of course, if those same people had a choice as to where their generated surplus was allocated, they probably wouldn’t sign it over to the vanity project of an eccentric billionaire.
It is the economic relationship between Bezos and his employees that puts a material surplus squarely on his lap to play with. This relationship gives him command over market conditions and a vast army of labour, as well as a grotesquely outsized political sway. It is a Herculean task to pry this surplus from his lap with taxation because liberal governance grants enormous influence to “job creators” by way of the corporate lobby and political donations.
Marx said “to be radical is to grasp the matter by the root.”1 While taxation rates help to manicure the lawn, the enormity of problems posed by global capitalism demands an entire re-seeding. Progressive forces must apprehend the relations of production that first give rise to the corporate capture of government, the K-shaped economy, environmental destruction, the state of perpetual warfare. By transforming the economy from one that is authoritarian and competitive into one that is democratic and cooperative, matters of distribution and political equality resolve themselves on the new terms.
A Catalogue of Crises
Taking inventory of the problems that have plagued our capitalist society for decades, we see worker-owned enterprises (cooperatives) present themselves as a panacea. Waste and environmental decline, crisis-level mental health outcomes, community loss, job insecurity and high costs of living are a few that spring to the foreground.
On environmental outcomes, there is a structural benefit to workers owning their own workplace. The owners are not impersonal investors from gated communities afar, but members of the community in which they operate. Cooperative economic relations encourage superior environmental stewardship because worker-owners are more likely to avoid polluting their communities and the planet than impersonal investors and owners.
Multiple studies demonstrate the pro-social tendency of cooperatives to prioritize environmental goals, reduce waste and allocate resources efficiently—especially when compared against capitalist firms. As one example, a cooperative bank in the UK was able to reduce downstream emissions of clients by 70% by providing financing for renewables, energy efficiency upgrades and carbon offsets.2
In terms of mental health and community, the accelerated decline of both are not unrelated. It should be no surprise that a chronically-online society increasingly devoid of face-to-face interactions is manifesting symptoms of a “loneliness epidemic,” negatively affecting local communities and individual well-being. The negative mental health symptoms we observe today validate the psychoanalyst Erich Fromm’s five fundamental needs for mental well being: relatedness, rootedness and unity, transcendence, sense of identity and frame of orientation.
Because of democratic decision making and a shared destiny amongst stakeholders, cooperatives offer the individual a community unto itself and create a vested interest in civic participation, addressing each of Fromm’s fundamental needs. The superiority of this model compared to capitalist corporations is reflected in higher rates of job satisfaction and happiness at work. At a national scale, widespread adoption of the cooperative model would enhance social cohesion, community engagement and improve productivity.
Artificial intelligence and automation are frequently cited as factors aggravating conditions of employment insecurity and precarious work. Productive technologies should not be feared, though. Workers that own their firms are incentivized toward technological efficiency and practical AI deployment because it saves labour time without impacting income. There is a longstanding capitalist contradiction regarding technological progression: employers covet it for the productivity gains, employees fear it over the ensuing layoffs. When employees become owners, this contradiction is resolved.
Furthermore, worker cooperatives have demonstrated greater staff retention and job security, even in times of economic recession. Whereas capitalist firms often have an express fiduciary duty to prioritize the interests of the investment class over their workers, worker-owners are far more likely to set funds aside in periods of strong economic performance in order to stabilize incomes during periods of weakness. The structural difference between conventional corporations and cooperatives also sees workers accrue greater employment benefit coverage for their families and up to 80% above-market pay. A comfortable living wage is the demonstrated norm in mature cooperative formations.
In one stroke, the cooperative model alleviates almost all of the civilizational problems pressing so hard on us today. Even political polarization, drug addiction and crime could be expected to crash downward with increased community building, financial security and social cohesion amongst the population. Rather than pitch socialism as a stoic alternative, cooperatives offer a visible pathway to transcending capitalism altogether; a world where wage labour is viewed as dimly as serfdom or slavery is right now.
Laying the Soil
But it is never so easy. For the apologists of capitalism, the usual retort is something along the lines of: “Nothing is stopping the formation of cooperatives right now. The market will decide if they are the superior model or not.” This falsely assumes some kind of fair marketplace where the best ideas, products and formations inevitably rise to the top. In reality, we live within a global system that doles out multi-trillion dollar subsidies to capitalist firms each year. Publicly funded and well-endowed schools of commerce glisten on campuses wherever a university is to be found. Banks raise low-interest debt and investment for hedge funds and publicly-listed companies, while giving relatively draconian terms to small businesses—and even worse for cooperatives, which are often denied loans.
Rosa Luxemburg described cooperatives as “small units of socialized production within the midst of capitalist exchange.”3 Worker owned enterprises must compete with conventional firms in the capitalist market but they do so with far less tools at their disposal. While they offer enormous pro-social and environmental benefits, this does not count toward GDP or rate of profit—the only measures of capitalist value, even in a world on fire.
The struggle to breathe under an avaricious economy thirsty for profit account for many of the shortcomings of the cooperative movement, including cases where wage labour and outsourcing is resorted to. But this does not mean cooperatives are a dead-end, they just have the wrong substrate. The history of capitalism, too, is pockmarked by failed attempts of merchant-run cities and bourgeois revolutions to shed their aristocratic chains, only to lose momentum and become subsumed again by dominant feudal relations.4
Socialism will transcend capitalism in the West when a future revolution applies the lessons of China’s nation building state-owned enterprises and public planning; when the unimpeded direct democratic rule of the people has been won. Once community and environment take their place among the measures of wealth, new economic relations between associated producers and consumers can be organized. As Karl Marx said:
If cooperative production is not to remain a sham and a snare; if it is to supersede the capitalist system; if united cooperative societies are to regulate national production upon a common plan, thus taking it under their own control, and putting an end to the constant anarchy and periodical convulsions which are the fatality of capitalist production—what else would it be but communism, “possible” communism?5
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Footnotes:
Karl Marx: Selected Writings, Second Ed. trans. David McClellan (Oxford University Press, 2000): 77. ↩︎
Melissa Scanlan, Prosperity in the Fossil-Free Economy: Cooperatives and the Design of Sustainable Businesses (Yale University Press, 2021): 261. ↩︎
Rosa Luxemburg, Reform or Revolution? ↩︎
John Bellamy Foster, “Capitalism Has Failed, What Next?” Monthly ReviewVol. 70, No. 9. ↩︎
Karl Marx, The Civil War in France. ↩︎



