According to a recent press release, the United Steelworkers Union is partnering with the Mondragon corporation of Spain to investigate the possibility of starting Mondragon-style manufacturing cooperatives in the United States.
For those who are unfamiliar with Mondragon, it is a network of employee-owned cooperative companies that was started in a poor region of Spain in 1956. The profits were reinvested into starting more cooperative enterprises, and the network gradually expanded over the course of the last fifty years to the point where it reported 16 billion Euros in sales in 2008. As a result of its corporate structure, it is owned by its employees who elect the directors on a one-member one-vote basis, and profits not reinvested in the enterprise go to the employee owners. Otherwise, it functions as any private company, competing in the marketplace for business against all comers.
As such, news of a USW-Mondragon partnership should be particularly heartening for those of a libertarian bent. For most of the 20th century, the main-line labor movement has been a driving force behind increasing government intervention in the economy, whether through pushing for protectionist trade measures or bailouts for the faltering American auto industry. However, despite the enormous amount of power these unions wield in many industries, they lack the sense of responsibility and husbandry that comes with the ownership of an enterprise. As long as people other than the employees own a company, the workers are incentivized to wring as much as they can from it on a short-term basis. Things are fine and dandy for them until the company suddenly goes belly up or moves over-seas, at which point the goose that lays the golden eggs is cooked.
In order to prevent that end-game, it is in the best interest of both the owners and the union to go hat in hand to the State looking for a bailout and/or a pseudo-monopoly. However, with an employee-owned company the employees directly benefit (income-wise) if the company is profitable and are hurt if it loses money (no dividends that year), so they are incentivized to think of the enterprise’s long-term prospects. The whole “wages vs. profits” struggle of a privately held company is a moot point in an employee-owned cooperative since the profits go to the employees anyway. Furthermore, the company cannot be off-shored since only employees can hold equity in the company; as such, moving a steel plant to Mexico would simply not make sense.
The success of such an enterprise could transform the nature of the main-line unions from organizations that function in a certain state of denial about the functions of the market into organizations promoting the development of a less speculative, more productive economic system. One in which the creative power of the free market is combined with the many benefits of universal ownership to bring prosperity to every corner of the globe. To see unions in such a dynamic, creative role would be a breath of fresh air after fifty years of vision-less accommodation to the corporate-welfare state status quo.
I took a few Marxist economics courses in college and the theoretical bent of the professors who taught it(i.e. their school of Marxism) held that what makes an enterprise Communist has nothing to do with politics, but moreso with the way that the profits for an enterprise are determined to be distributed. If workers who are inputting labor into the creation of a product that produces profit for a company have a direct say in the distribution of said profits, the enterprise is theoretically Communist. These professors would also argue that every regime that has put on the Communist label were in fact not so from the economic perspective. They were actually state Capitalists whereby instead of private business management determining the way profits were distributed, it was instead the state serving the same function. The workers actually had little say in this – and thus technically this was not Communism.
Now if we look at Communism from this perspective, which is not political, but strictly deals with the ownership of the enterprises that are producing the goods and services for a place – how could that be integrated with a theoretical free market?
The person who’s done the most work on the integration you are suggesting is Kevin Carson. His book on Organization Theory is one of the most insightful works of political economy that I’ve encountered. A short introduction to his thought can be found here: http://mutualist.org/id4.html and here: http://mutualist.org/id10.html .
Essentially, though, the idea is that worker-owned enterprises still compete with each other, and you have entrepreneurial incentives. The difference is that, instead of society split between an owning and a working class, ownership is spread through society without State intervention. Thus you avoid the monopoly inefficiencies inherent to both the communist and the corporate capitalist models, while making efficiency increases good rather than bad for individual workers, due to their ownership of their enterprises.