Socialism Versus Capitalism: The Cooperative Model

I have two favorite coffee-shops. One, is located around the corner from where I lived in Baltimore and it’s very special to me because I loved living in that city and still cherish all of its memories. This coffee-shop is run as a collective and its self-proclaimed goal is to “subvert the logic of capitalism.” A cooperative means that the people who work there own the place. This is a small cafe, which means that it only has a few owners.

This coffee-shop is very quaint and special. There are a few things you start noticing over time, though. The floors and the tables are always far from being clean. The service is extremely slow and the snacks are not very carefully prepared. The baristas / owners have a tendency to condescend. The cafe doubles as a progressive bookstore, which is great. However, the baristas enjoy making snarky comments about the books one tries to buy from them. (“Pshhh! This is totally old. Are you just discovering it now?”) They also tend to throw out customers who don’t look like they belong ideologically. N. and I were asked to leave when a public screening of a popular progressive documentary started. We were in the middle of our drinks and had to pack up and leave (I was also blogging) under the collective glares and loud comments about “those Russians.” I attribute this to the fact that N. had gone there straight from work and was wearing a business suit and a tie. There was also a general dislike of the “Russians” that, as far as I have been able to gather, stems from the Russian-speakers’ visceral dislike of the word “Communist.”**

The other coffee-shop I love is a capitalist enterprise. The owner, a.k.a a vicious capitalist who squeezes out profits from his employees, is a gentleman in his sixties who started decades ago as a waiter and saved up to open a business of his own. He now lives and breathes his cafe. He is always there, serving drinks, cleaning up, mopping the floor, talking to customers. The place is spotless, the service is extremely fast, the owner knows every customer by name and greets us even after we’ve been away for months like we are his long-lost relatives.

Mind you, the cooperative cafe I described is only owned by a few people. Just imagine this collective ownership model extended to a large enterprise. You think this system makes the workers happy? No, it doesn’t. Happy workers aren’t mean to customers and have no need to bicker endlessly about whose turn it is to serve clients.

This has been my experience with collectively owned businesses every single time. As we all knew only too well in the Soviet Union, if something belongs to everybody, it really belongs to no one. If you believe in the cooperative business model, be prepared to see the quality of goods and services plummet. If you are ready to make that sacrifice for the sake of “subverting the logic of capitalism”, you are definitely entitled to that preference. I, however, have to admit that I after spending the first 22 years of my life in a country with horribly scarce and low-quality products and abysmally poor service, I’m kind of over that. (The last years of the Soviet Union saw an explosion of cooperatives, as you probably know. This model was abandoned as soon as it became legally possible because – surprise, surprise! – it does not work.)

As somebody who possesses no entrepreneurial spirit whatsoever, I really admire people who start their own businesses, work hard and enrich themselves as a result while providing me with stuff I need. Undoubtedly, the capitalist system has a multitude of defects. The collective ownership of the means of production, though, (i.e. socialism) is nothing but one huge defect. I’ve seen it fail miserably time and again in different countries and in different economic and cultural environments.

I know that after I publish this post and come to work, colleagues will grab me by the arm and whisper, “You don’t really mean you like capitalism, right?” And then a passionate lecture on the evils of colonialism will ensue. People love lecturing me, a colonial subject, on how colonialism is not a good thing. Which makes as much sense as me telling a gay person in a hectoring voice, “Have you thought about the plight of gay people? Because I read a book about it. . .” But I’ve seen what I’ve seen and I know what I know. I can’t pretend otherwise because this is not a popular point of view.

** I want to remind everybody that the Communist genocide claimed lives of about 11 million Ukrainians in 1931-32. I think, as a result of that, Ukrainians can be excused for disliking Communism as much as the Jewish people abhor Nazism.

What’s Socialism?

As a person who grew up in the Union of the Soviet Socialist Republics, I am always puzzled by the way that the word “socialism” is used in North America. Time and again, I hear, for example, that Canada is “Socialist.” I thought that maybe there is a different meaning to this word but I just can’t find the definition of “socialism” that North Americans rely on when they say that Obama, for instance, is a Socialist.

Here is what Wikipedia has to say about Socialism:

Socialism  is an economic system characterized by social ownership or control of the means of production and cooperative management of the economy, and a political philosophy advocating such a system. “Social ownership” may refer to any one of, or a combination of, the following: cooperative enterprises, common ownership, direct public ownership or autonomous state enterprises.

This is precisely the definition that I am familiar with and use. Social control of the means of production and cooperative management of the economy. None of this even remotely exists in Canada and / or is advocated by President Obama. So I’m guessing that there must be some radically different definition that people use.

I’m genuinely confused, folks. Does socialism in North America stand for something like “advocating strong welfare programs and a strong social safety net”? If so, then what do you call actual socialism?

Does the “99% vs 1%” Slogan Make Sense?

Reader n8chz says on the subject of whether the “99% vs 1%” slogan makes sense:

I take it as a political statement that the middle class have more interests in common with the lower class than with the upper class.

My question is, really? Is this a convenient myth we are telling ourselves, or is this actually true?

There is a grievous lack of a social safety net in this country. Let me remind you, however, where the money for this social safety net comes from in the countries of Western Europe and in Quebec that have it. It is financed by the very high taxes paid by the middle class.

In Sweden, the income tax rate is 57.7%. In Germany, it’s 42%. In Belgium, it’s 50%.

We like to pretend that if we prevent the hedge fund managers from paying smaller taxes than they should on their investments, that is going to make a massive difference to the economy. It’s all a convenient illusion, though. Every more or less socialist system in existence right now is based on taxing the middle class heavily.

This is precisely why the #Occupy movement is so invested into promoting the myth that we are all 99% and that we have the same interests and goals. You can nationalize every single private jet and every single private island in this country outright, however, and that is not going to finance a passable social safety net even for as short a time as the next 50 years.

It’s so much fun to protest and wave catchy slogans on Wall Street while feeling like you are bravely fighting for the cause of the dispossessed. It is a little harder, though, to agree to be taxed at the same rates that one’s Western European and Quebecois sisters and brothers do.

I have a question for my middle class readers. Are you willing to give away between 50% and 60% of what you make in taxes to pay for the universal free healthcare, very cheap or free higher education, very high unemployment benefits, free amazing daycare for the poor, etc.?