AskProfWolff:  Financing Worker Co-ops

AskProfWolff: Financing Worker Co-ops

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This is a response to Peter Osuchowski—one
of our Patreon supporters—and it’s a pleasure as always to get these questions and to provide,
as best I can, an answer. Peter asks, quite rightly, about the financing
for worker co-ops. To start a worker co-op, and just as much
to convert an existing capitalist business into a worker co-op, that requires money,
and the question is where will the money, where will the financing, where will the capital
come from if we’re going to be pursuing a transition from a capitalist economic system
to a democratized enterprise system where the workers themselves own and operate in
a democratic way the business of producing goods and services. Before going into the question of a socialist
banking system—which Peter asks about—I want to make it clear that because worker
co-ops have been around quite a while and have had these financing problems, they have
also found financing solutions, and a brief review of them will be the way to get into
Peter’s question. First, there are commercial capitalist banks
that have in the past lent to worker co-ops which have been able to repay those loans,
to pay interest during the while that the loan was in effect. So, there are in fact commercial capitalist
banks who have a good history of lending to worker co-ops and are prepared to do so again. You need to be connected to them—We might
be able to help you in that regard; “We” I mean Democracy at Work—but they exist,
and so they can be found. The second thing is to understand that there
are diverse sources of capital. I know of examples were worker co-ops got
going because a local social organization or a local church of one kind or another or
a local philanthropy or a local nonprofit was willing and able to put forward some or
all of the money needed by a worker co-op to get going. Sometimes that was a grant, sometimes that
was a loan, and sometimes it went to help money put up by the individual workers involved
here who were willing to be at least partly the investors in a worker co-op. Then, the third more recent development has
been using the internet. GoFundMe, one way or another, has been a way
to collect money from people who want to see worker co-ops grow and flourish as an important
alternative to the capitalist enterprise—a way forward for social development beyond
capitalism—and that way of raising money has been remarkably successful. But yes, Peters, right! It would be important to organize a systematically
committed institution—call it a socialist bank, call it a worker co-op bank, it doesn’t
matter. The idea is it could be itself a co-op committed
to raising money from people who believe in co-ops and then lending it to the actual co-ops
with a modest interest rate to give the co-ops a boost, and the modest interest rate that
could pay the expenses for such a “socialist” thing if you like or a “post-capitalist”
bank and a little bit for the bank itself so it could grow and service more and more
co-ops. It’s a good idea. It’s now on the agenda in the same way that
worker coops are. Thank you, Peter, for the question, and I
hope it is an answer you will find interesting and worth pursuing.


  1. First! Richard, pleasure to hear from you. Take care and thanks for your insights. Capitalism reform must arrive. Yes to co-ops

  2. If workers knew how to run a business then they probably wouldn't be workers. Educate the workers first. Education is the key. Don't let AI win, improve yourselves. Don't be a resentful cry baby bigot. That's not cool no matter how many people agree with you. Hitler's ideas were popular too.

  3. Best Prof. Wolff,

    Thank you for this video! I'd like to ask a (or actually a couple) question. You have mentioned previously in some lectures that the Soviet Union showed, initially, great economic growth. Later on though, the economic development stagnated, which affected the average citizens access to basic goods, and discontent grew in the population. Could the initial growth of the Soviet Union be attributed to socialism, or is it to a larger extent explained by the fact that the Soviet leaders worked to modernize and develop the country with the technology available at the time, unlike the reactionary monarchy? What caused the stagnation? I'd really appreciate answers to these questions, since I believe it could help us to pick up proven successful strategies, and avoid previous mistakes.

    Many thanks in advance!

  4. Thank you Professor Wolff! That localized funding sounded a little like Distributism? Curious your thoughts?

  5. I'm not against this, but all human groups, even more so in cliquey never-ending high school mentality drama worshipping narcissist America, are pretty darn exclusive. I would describe clique culture as sub tribal. Not to mention that Americans are certainly more insular than cooperative. As a worker, I'd often be forced to rely on hierarchical management to protect me from vulture like abusive coworkers. You've got too long to go, and I've seen too many living in tent camps, eating from dumpsters, and dying from hypothermia. Basic incomes are the only way forward right now.

  6. Can't we build a socialist safety net from inside of capitalism and grow it like roots through a concrete sidewalk? There are waves of people waking up and wanting a more socialized system, but of course capitalism won't deliver it unless we take it using their own rules against them. Set up a capitalist enterprise called "Socialism, Inc." that aims to deliver people their basic needs (toilet paper, diapers, food, toothpaste, etc.) at absolute bargain basement prices and only from human-humane manufacturers. Have people check off the things they want and then use the masses of pre-orders to negotiate ridiculously low prices. The more people put a 'bid' towards a product that others are bidding on, the more bulk you can order and the lower the price gets – and you aren't stuck with unwanted merchandise because you only buy what you/they need and nothing sits on a shelf waiting for a customer. It's basically a trade-off of having hundreds of stupid choices at your local grocery to having less choice, but a guarantee that the product is produced FAIRLY and at a reasonable price. Get big enough and you could set up your own co-op manufacturing plants and distribution systems. Distribute an app that helps the people make their choices and then tells them how best to vote in their local elections in order to get human-humane politicians. Make it democratic, self-sustaining, profit-adverse (a non-profit? or would that be too limiting?), and completely financially and decision-makingly (?) transparent — what a shock to the system that would be. Eventually grow so big you flick the neo-liberals and neo-conservatives away and people can get back to the business of living instead of working for someone else's enrichment.

  7. Can you do a video on how; if a rich person buys 1 million in stock portfolio and it goes up to 5 million over their lifetime, they can pass it to their heirs 100 percent tax free. and the heirs only have to pay tax on gains on the stock portfolio (If) they sell it for more than the value they inherited it at. So this generational wealth can virtually go untaxed for decades or even lifetimes.

    The rich and powerful have literally created a tax code which fucks the labor force and working poor and middle class, and benefits themselves. And how many in Congress own stock portfolio's. Seriously, I'm amazed people don't revolt.

  8. ROTFL you just described financing worker co-ops the same way ANY OTHER capitalist venture might be able to begin lmao.

  9. Your theory of sharing the new found wealth with the employees is noble, ethical, and moral, but what if your competitors don't do it, undersell you, and put you out of business. What's your answer to that one?

  10. Here in San Diego we have a CO-OP grocery store that has been kicking ass, providing amazing food, hiring the most people, and making money for many years, People's CO-OP, in Ocean Beach, it is a beautiful thing growing and growing!

  11. How about:

    A workers party (call it whatever you want, if not a party), not starting out as a mass organization, but a dedicated group of people who are less concerned with losing their jobs or establishing roots than organizing. Their goal is to build to a mass party once some stability in the party is made.

    This party will work on the basis of simple majority voting with free internal debate, but once a decision is made, everyone is on the same page to try the decision out. We can update things as we go, but endless deliberation and factionalism is less useful than at least trying something

    Plus this would help stop disruptive people or organizations from messing with us, it only takes one bad faith actor to ruin a consensus model

    A workers party built around the conducting interviews or “market research” or “polling,” so we constantly stay in touch with the community until we can go big. Run on the issues the community cares about—but not parroting the liberal line, offering a revolutionary solution instead. Reforms for now, but never downplaying revolutionary change.

    So, since prohibition of immigration, abortion, guns, drugs, and sex work only empowers capitalists and the police, while doing nothing to solve the problem, we offer other solutions based on evidence and Marxist analysis. Full employment, good pay, benefits for all, proven to reduce crime without more policing. Find ways to unify workers with different mainstream ideas. A liberal who wants universal healthcare but also an assault weapons ban (which are less likely to kill us than cops and are statistically one of the least deadly weapons, and gun control is disproportionately applied to people of color like all laws, getting innocent people killed like the war on drugs does), is no closer to socialism than a conservative who opposes NAFTA but wants to build a wall (immigrants don’t commit more property or violent crime than citizens, and pay a hell of a lot of taxes).

    Both these hypotheticals can be united, if we materially improve their lives while making principled arguments, in that order.

    We have to provide a breath of fresh air into the stagnancy of ever more technocrat policing.

    Using this anthropological strategy to we can find out what kind of co-ops to form, once we get the money. We’ll come back to that

    In the mean time, the party plans actions like protests, runs candidates, and conducts acts of solidarity (soup kitchens, clothing drives related to mass line), to raise awareness. Bourgeois elections are spectacle, so let’s use this free publicity

    The party also uses multimedia on social media with patreon or whatever links to get donations, showing the party accomplishing real goals, offering real news and analysis, using plain proletarian English, Spanish, and whatever languages we can.

    That’s one source of income. Then, pursue funding from wealthy liberals or whoever, credit unions, banks, all the stuff Prof mentioned

    Independent and united political action plus a clear goal and platform is basically necessary for the success of socialism and the revolutionary seizure of power.

  12. HILARIOUS ! Venezuela is Starving to Death. The Only example that you Neo-Marxist scumbags can give of Socialism working is the Free market economies of Northern Europe. LOL ! " I think standing in line for Food is a GOOD THING ! " Crazy Bernie Sanders ( 1978 )
    How about those National Socialists in Germany in the 1930's ? Worked out Great.

  13. Is there such a thing as a co op creating long term wealth for some of its employees? Is there any way for some to become super rich doing such? Moreover, is there a place for the super rich under Socialism?

  14. Coops today are pretty flawed, they still operate within a capitalist market and thus you still tend to have the same contradictions within the Co-ops that you can face in a private business. I think the most important part of democratization would be the nationalization of banks and financial institutions on a large scale and not just establishing a singular banking institution dedicated to financing co-ops.

  15. Prof Wolff, all the sources of capital needed to start a co-op or transform a business into a co-op that you mentioned ironically implies that socialism needs capitalism to exist.

    Church Donation – ultimate source capitalist workers who tithe
    Philanthropy – Rich capitalist donating surplus
    Non Profit – capitalist workers/business donating money
    Individual Workers putting up their own money – workers earned money from capitalist system
    Internet Gofund me – capitalist workers/businesses and organizations who benefited from capitalism donate money.

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