Prejudice masquerading as economic thinking

How is it that we are not allowed to sell our own bodies and minds into slavery, yet we can legally rent them out? Why does the law not recognise human associations which produce wealth, but only enfranchises those who own and control it?

The answer, according to David Erdal, is power - rooted in brutal social and legal relations established in the era of the enclosures and the formation of the urban working class. A powerful polemic about the alienation of work and its fruits, and the absurdity of the law in relation to work, are at the heart of his new book Beyond the Corporation.

Subtitled Humanity Working – motto of the Mondragon Corporation, a federation of worker co-operative businesses based in Spain – Erdal puts foward a well-tempered, point-by-point rebuttal of the standard arguments against employee control of firms, and celebrates the successes of employee ownerships including John Lewis Partnership and his old family firm, Tullis Russell Papermakers, in the UK; Science Applications International Corporation in California; and the worker co-operative conurbations of the Emilia Romagna region in Italy. Along the way, he analyses the destructiveness, inhumanity, inefficiency and lack of accountability at the heart of rentier capitalism, and makes the case for an alternative system of shared reward and authentic economic democracy.

This book is inspired, provocative, and disturbing. The inspiration comes from the author’s powerful and passionately justified belief that progress and happiness flow from the autonomy, solidarity and self-confidence produced by workers’ ownership of their work.

Beyond the Corporation proposes a narrow workerist base for the economic democracy Erdal advocates, and he believes that there can be such a thing as a fundamentally fairer capitalism, based on shared ownership. Wealth and power are not represented as things socially reproduced in cycles of production, circulation and consumption. From such a productivist point of view, the claims of non-workers, and the potential of consumer, distributive and community co-operation in the battle for economic justice, don't appear.

Erdal may simply be sticking to his topic, with a good editorial team at his back. He exhibits the biases of a recovering Leninist; before being disillusioned with totalitarianism, bringing Tullis Russell into employee ownership and being involved with the wider UK employee owned sector, Erdal was a narodnik communist organiser and Workers Revolutionary Party member. In the same way that a recovering anarchist could never bring himself to view the state as anything much more than a vehicle for capitalist imperialism, Erdal insists on the need for sound leadership, and calls forth a breed self-interested but altruistic, enlightened owners who will invest in the education of their understandablly cynical employees, changing them slowly into confident and capable worker-owner-delegators.

After the philanthropists have done their good thing, a cadre of good professional managers is also needed, to direct worker-owned enterprises and, crucially, to reinforce the ‘feeling’ of ownership among the workers through the disciplines of employee engagement. Thus, Erdal rejects Beatrice Webb’s view that worker owners couldn’t effectively delegate management authority within an enterprise, while seeming to assent to her opinions about the impossibility of autonomous workers managing their own activity. In this he would be at odds with worker co-operative thinker-practitioners like Bob Cannell, who argues against the view of businesses as ‘organisations’ employing ‘human resources’, and the pernicious influence of systems thinking on the management of enterprises – which, he says, are better understood as nothing more or less than sets of complex human interactions, (de)formed by power and capitalist economic relations. Cannell says that we have become blinded by the orthodoxy of managerial professionalism, which makes us unable to see the difference between the function of management and a specialist caste of managers, who (in the UK, certainly) are a tribe of mini emperors without clothes.

Erdal also ignores most of the UK worker co-operatives, which are among the most radical in Europe. They number several hundred, the largest being Cannell’s own Suma, with a turnover of around £26m and 140 worker-members (although in turnover terms it may soon be overtaken by the green technology co-op, Dulas). Given the hostile terrain on which UK worker co-operatives have always operated, with the possible exception of the decade from 1973 to 1983, it's hardly surprising that chronically undercapitalised grass roots co-ops struggle to grow - and remarkable that a significant number of them have nevertheless done so, through three or four business cycles during last 25 or 30 years, which is longer than the lifespan of the vast majority of small businesses. Remarkably, therefore, it seems that even the most ‘anti capitalist’ of our worker co-ops aren’t that bad at business after all (even if being crap at capitalism could be construed as a criticism, pace Beatrice Webb).

Beyond the Corporation prefers co-operative exemplars from almost anywhere but here, and so doesn't draw on a rich and radical indigenous current of self-management culture and theory. Although he could never be accused of preferring toffs to workers, Erdal’s UK case studies are mainly paternalistic, top-down, trust-owned businesses like Scott Bader and John Lewis.

There’s another article to be written about what this bias represents – a predilection for technocracy and large-scale enterprise, perhaps. Early in the book, Erdal asks:

“What if the notion of employee ownership was just a hippy dream, more appropriate for idealistic candlemakers than serious, large-scale, blue-collar industry?”

What he has against candlemakers and hippies isn’t clear, although it’s clearly anachronistic and irrelevant - but it is of a piece with a school of thought in the employee ownership milieu that’s dismissive of the UK’s industrial worker co-operatives (Italian and Spanish ones being, presumably, more potent and properly workerist, as in the Situationist slogan “I’d rather have sex with an Asturian miner!”)

Perhaps it’s a reaction to the ‘near enemy’, or an aversion to the UK’s consumer retail co-operatives, with whom most of our worker co-ops are currently allied (although strangely, the advocates of employee ownership have stronger ties with the consumer co-op financed Co-operative Party than our own worker co-ops). More importantly, it’s in the tragic traditions of the UK labour movement, going back to the fallout from defeat of the South Wales miners in 1910, the suppression and failure of worker co-operatives in the 19^th century, and the hegemony of statism and sandwiches-at-No.10 trade unionism in the 20^th. This has resulted in a long eclipse for communitarian and commonwealth currents in the British workers movement. In the present century, this political split is echoed in the gulf between employee or trust-owned firms and the worker co-operatives, which has fossilised into a sterile standoff  between the Employee Ownership Association and Co-operatives UK, their respective trade organisations. The failure to connect is debilitating for the prospects for worker emancipation in this country. But nobody’s really to blame. To paraphrase the Dutch communist Anton Pannekoek - Tony Pancake - the movement is not weak because it is divided; on the contrary, it’s divided because it is weak.

David Erdal is to be praised for the warmth, commitment, clarity and honesty of his writing. He gives us a sense of how overcoming the legacy of things we one believed can be a lifetime’s work – and how that effort may bring us to realise that in the most important respects, we were right all along. His arguments against the way things are, and in favour of how they could be, are informed by good research, years of experience and real intellectual rigour. Beyond the Corporation may not, in the end, take us far beyond the corporation, but it’s an important contribution to the debate about real world workers' autonomy. It should be picked up and shared by anyone interested in economic justice, radical democracy or the abolition of wage slavery.

Beyond the Corporation: Humanity Working by David Erdal

Published by the Bodley Head, London

UK £14.99, Canada $35.95