How We Get Beyond Capitalism
Posted on 2020-09-25, Richard Wolff, Democracy at Work
Many of you have asked me, how transitions happen, how we can understand, imagine, plan for and organize a transition from capitalism to a better system. This has been an issue that has interested people for a long time, as you can imagine, and one of the ways you get a handle on it, as I’m going to try to offer you today, is by looking at the last transition. The transition from feudalism in Europe to capitalism, and hoping to get some clues, as I think we can, from the earlier transition. So that we can think creatively about a transition now, and it couldn’t be at a more urgent transition time. Okay, let’s start with feudalism. The feudal system in Europe was a system that had basically two positions: the lord and the surf. Most production was agricultural. The lord presided over the land and gave pieces of it to people called serfs. The serfs had to swear a loyalty and a commitment to their lord. The lord promised to protect them. They often had a little ceremony where the lord tapped the surf on the shoulder and the surf promised to love honor and obey the lord which might strike you as familiar and make you understand feudalism in a new way. And the work was done this way. The serf did a lot of the work on the piece of land he got and he could keep that for himself and his family three days of the week. The other three days of the week he went to work on the land of the lord and whatever he produced there belonged to the lord. The work he did for the lord, the portion of his own growth of animals or crops that he delivered to the lord, those words were rent. That was the word used and the lord of the land was of course the landlord. You see where those words come from and so this feudalism existed in Europe from roughly 500 A.D. to roughly the 16th, 17th, 18th centuries, when it collapsed.
This is the important question. How did it collapse? How was the transition from feudalism, from these manors they were called where there was the lord of the land surrounded by the poor serfs who did the work on the land? How did the transition happen? And here’s what’s important: it happened over and over again. A little over here, a little over there, suddenly the lord of the land and the serfs under the lord couldn’t keep this system going even if it had been going for hundreds of years. Maybe a famine occurred, maybe bad weather happened, maybe the serfs got sick and tired of working for the lord and began to refuse, maybe a war happened between this lord and some other lord that destroyed the crops. A hundred different things could happen to upset it, and when it got upset, sometimes the lord either died, was killed, disappeared, the serfs either died, were killed, disappeared, and suddenly people had no way to continue the lord-serf relationship. Then they tried other ways to survive and one of those other ways was for one person who had a little something to offer a peculiar deal to another person who had less. And here’s the deal: I have some food I’ve stored away. I have a place for you to live. You come and work for me, I will give you at the end of each week enough food to survive and a place to stay and you will work for me and whatever you produce is mine. In embryo, this is the wage labor relationship. This is the capital-labor relationship in a word. It’s capitalism. It’s one person not swearing loyalty and none of that. It’s a deal. It’s a contract. I’ll work for you; you give me a wage and I will give you my labor: my brains my muscles and whatever I produce is yours. In that moment, feudalism turns into capitalism. There is a transition. It happens often, but the conditions aren’t right for it to last, so, for example, lord comes back, squashes and says no-no. You can’t do this. We’re going back to the old system did that happen often many experiments in capitalism happened some lasted a week some lasted a decade, but they needed the conditions to be ripe. For their system as a whole to change, here’s one of the things that did that in Europe in the 14th century. They had a terrible pandemic. They had something called the black death, the bubonic plague. It killed millions of lords and serfs. Leaving millions with no structure to live in, no feudal relationship, no manners, no lords, and serfs. Just individuals desperate to survive. And you know what many of them did? They became self-employed. They became little farmers. Little crafts people, living on their own. They weren’t a lord; they weren’t a serf. They were something else. And some of them also found another relationship. If they had nothing, they went to work for somebody who had something, and they cut a deal which we now call capitalism. One of them paid a wage to the other, who in return gave them their labor power, their ability to work and the fruits of the work that they did. Capitalism formed.
The plague itself brought to an end, slowly took centuries, feudalism couldn’t quite ever come back which ought to make you wonder whether the pandemic we’re in now might not have a comparable effect on the capitalism we now have. But, now let me show you what the hints are, and why they’re relevant to capitalism. Capitalism also has always had, like feudalism, moments when it broke down. When, for whatever complex of reasons, people didn’t connect to each other as employer and employee, which is the core relationship of capitalism. Just like lord and surf was the core relationship of feudalism. Let me give you just a few examples. The Shakers, that religious community in early United States. They didn’t relate to one another as employer and employee, you know. How they related in the way we nowadays call worker co-ops. All the people in a shaker village got together and decided, one person, one vote, how to produce, what to produce, how to produce, where to produce, what to do with the fruits of their labor. No employer-employee. That was a socialist experiment if you like, going beyond capitalism, but the conditions weren’t right for that to spread. It spread a little, but it couldn’t become the dominant system. Let me give you another example. More modern, the Mondragon Corporation in Spain. A catholic priest in 1956 starts a co-op: no employer-employee. We are our own bosses here, said father Arismendi in that area, in Mondragon, a little city in the north of Spain. And here we are in 2020, and the Mondragon Corporation is one of the 10 biggest corporations in Spain. It’s a family of a couple hundred worker co-ops where there are no employers over there and employees. The workers are their own bosses. Wow! That is a non-capitalist experiment that has been able to grow and last well 70 years. Remarkable. Here’s another one. The province of Emilia Romagna in Italy. Around the city of Bologna, in the north of Italy, forty percent of that region is worker co-ops. People have refused huge numbers to be in an employer-employee relationship. They want worker co-ops and that’s what they have. And they have coexisted there for decades with capitalist enterprises that still have the old employer-employee relationship at their core. They’ve been able to exist and grow, so they’re going beyond capitalism. Then there’s the Soviet Union and China. They tried, and Vietnam and Cuba. And they tried, very interesting, all these experiments. Some worked, some didn’t. Just like the experiments going beyond feudalism: some worked, some just didn’t. It took time for the conditions to ripen, so that there could be a general transition. The Soviet Union fell apart after 70 years, that’s an experiment that taught the lesson. Something about how they tried to go beyond capitalism didn’t work out and we have to learn from that. And what we have learned is that the focus on power in the state can be too much, and that if the state has too much power that’s a problem. That’s an important lesson from the experiment that happened there, and it is an experiment that’s been learned by many, which is one of the reasons why today looking at the experiments that have happened so far, there is a growing disinclination to think about the next system in terms of what the government does. And more of an interest in saying the hint, the clue to how transition happens, now is to go after the core relationship that what really sealed the fate of feudalism, was the decision and the commitment of millions of people that they thought that the employer-employee relationship was more productive, was better for most people than what lord and serf had been.
The great father of modern capitalism, intellectually, Adam Smith, that’s what he said, that’s what he wrote: capitalism, is a more productive system than feudalism so what’s beginning to happen is a recognition that what has to change, what has to be learned from the successful but also the failed experiments in transition, is to focus more on the core relationship that what has to happen is you put aside the employer-employee relationship just as earlier people put aside the lord-surf or if you like the master-slave. Put those aside. The new breakthrough, the new system, the better way to live and work would be if you democratize the enterprise. You do away with these two positions master-slave, lord-serf, employer-employee. Why have that? Why not make it instead a democratic community at the workplace, the way we want a democratic community at our place of residence where we live. Why not have it also where we work. One person, one vote, and we all together decide what to produce, how to produce, where to produce, and what to do with the fruits of our labor. We don’t need to be divided between owner, board of directors, boss and peons at the bottom. We didn’t need a king anymore, some centuries ago, and we basically got rid of them. Except as figureheads. Why are we keeping kings inside the workplace? Kings and courtiers who steal most of the money and leave us to do most of the work. We can do better. That was the idea in the minds of all those people in feudalism who clawed their way with many experiments into what they thought would be a better world. The world of employer and employee and now that we’ve had three centuries of capitalism under our collective global belt, we too have every right to yearn to do better. To try to go further, and to see and learn from the experiences of social transitions in the past. What has to be our focus now, and I submit to you having learned from the successes and failures of transition from capitalism to the next system, whether you call it socialist or not, is that we need to focus on hanging the core relationship at the workplace. No more employers running the show, telling everybody else what to do. That’s not democratic. that’s hierarchical, and we don’t want it. We want to do better, and just as people before us, did better by changing that relationship from lord-surf to employer-employee, we’re tasked with taking it the next step to democratize the enterprise. Worker co-op is the core of the next transition.