AskProfWolff: PG&E Bankruptcy and Worker Co-ops

AskProfWolff: PG&E Bankruptcy and Worker Co-ops

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This is Richard Wolff with a response to a question sent in from our Patreon community and in particular from Matt Slagle. Good question! Very much worth a response! Matt asks about the tremendous controversy in California over the performance—or better put the malperformance, the bad performance—of a major public utility there: Pacific Gas and Electric PG&E as it’s known. As many of you know reading the papers, listening and watching the news, there have been unspeakable fires caused by that electric utility and likewise power outages as the response of the utility to the inadequate way it has been providing its services. So, Californians get to choose between the fire risk and the electricity outage. It has produced a firestorm—pardon the pun—of criticism long overdue and well-deserved by PG&E. But importantly, this criticism has not stopped short as mostly in the past these kinds of criticisms did. It has not stopped short of questioning the very existence of PG&E as a capitalist corporation; a corporation that puts forward explicitly that profit is its bottom line, that profit is its goal, that profit is what it promises to the wealthy who buy shares in the company, etc. These criticisms have gone further and said that’s not the way we should handle something as important as our basic energy sources, and something that should not be handled where the first order of business the priority the bottom-line is profit because that risks our health and our safety, and nothing proves it more than the failures of PG&E. And these critics have gone on to suggest that the company ought to be taken over, removed from the private profit drive and incentives, and made instead into a genuinely public service company whose first priority isn’t private profit but public welfare, public safety, public use of energy without the risk of fire or outages. And so these critics have promoted the idea of a consumer co-op. That is an electric utility owned by the people who use it, you know, like a credit union exists as a banking institution owned by the people who deposit their money there. No private profit to be earned, but people instead to be served as the bottom line, the ultimate goal, the top priority. And the question Matt asks is kind of what’s the relationship between a consumer co-op— which is what’s being suggested for PG&E—and a worker co-op which is something different, and that difference has to be underscored. A consumer co-op makes the production of a good or service shaped by, owned by, controlled by the people who consume the service. A worker co-op makes the industry or the firm or the enterprise owned and controlled by the people whose labor makes it work. And so the question is which one is appropriate in which circumstances. Since this is a short answer to a very big question, let me give you my blunt response: why choose? The best operation we could have is both of them. Make the work a cooperative venture and the consumer a cooperator with the workers. In other words, let’s have industry and firms—and not just in electric utilities but in all the important areas of social life—let the work that has to be done be shared as a community together with the people who depend on the work, the enterprised ones, the consumer. Let’s have it be a cooperative in which the workers as a group and the consumers make decisions together.

36 comments

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  2. Would enacting a Hippocratic oath – first priority, do no harm – for corporations address the problem of privatized profits with socialized costs, harms and risks? Didn't US corporations have to periodically satisfy a state entity that their existence was in the public interest, once upon a time?

  3. In California, the municipal utilities like ladwp and smud had less issues than pge and sce. Privatization means less workers, less pay… That's how investors get profits. Ladwp makes money for the city, reducing taxes.

  4. good. Every city should have its own power operation independent from these daffy brained monopolies who are too big to function.

  5. OHOHOH, THIS FANTASY OF COOPERATIVE AND DEMOCRATIC UNITY IS GETTING ABSURD. YOU CAN BETTER LET RUN A COMPUTER THE PLACE THAN STUPID HUMANS.

  6. Gotta Love the Wolff! However, despite whatever …ISUM you believe in ~ Infinite Growth on a Finite Planet is not possible no matter what GOD or …ISUM you subscribe TOO. Population Overshoot & Resource Depletion? Just a thought…

  7. What CA needs is definitely a worker/user co-op public utility. All residents of CA should be required to provide enough of their savings (capital) to build new distribution facilities for gas and electricity that would provide free utilities to all the Californians who cannot afford it. I hope they have that much savings, cause it's gonna cost a bundle.

  8. Notice how he mentions “taking over” pg&e, then skips over how this will be done, continuing his proposals to turn it into his coop model. Is this a govt seizure and restructuring? He will never talk about the “how” and all of the property rights violations and threat of violence to make it happen. Anyone want to unpack this suspiciously avoided, yet crucial, element of implementing wolff’s ides? Everyone says he is not proposing for more govt, yet, this sounds like more govt.

  9. Only pure, pristine, unadulterated Republican Capitalism can save California, and America for that matter. Worker/Consumer Co-ops are black holes; that not even light can escape from, let alone money.

  10. Is there any socialists or communists that advocate Wolff’s ideas of govt seized mop then restructured as a coop that have actually started a business themselves? Anyone with actual experience in the market outside of just being a consumer? I’m having a hard time finding someone who actually has spent the time and energy to create a mop, ran it for years, and still advocates worker owned mop. I’m under the belief to even have an opinion on these matters, one should have experience in what it takes to create it. It’s easy to pontificate on what others should do with their creations, yet another to apply the same supposed altruistic ideals to something you’ve created.

  11. Where I live in the province of Saskatchewan we have a government-owned utility called the Saskatchewan power Corporation that supplies electrical power to the entire province. Our electrical rate for Residential: $0.1565 per kWh.

  12. As a California resident, I can say that the necessity of terminating PG&E as a private company isn't even a matter of debate. The only real question is how we dig out all of the corrupt people responsible for it and then see that they are justly impoverished for the rest of their miserable lives.

  13. California lawmakers and regulators might consider requiring that electric utility lines be put underground wherever fire is a constant risk. The risk of damage from earthquakes would seem to be about the same. The cost differential of installation might be high but would the maintenance costs be much lower over time.

  14. PG&E probably will be taken private, the stock that was placed into the wildfire claimant settlement fund made worthless, its assets then stripped out for great profit and then the carcass offered to the State for a legislated tax deduction. The American Way.

  15. Imagine what all you guys could do if you all pooled recourses as a collective and started your own means of production from ground up together. I wonder what’s holding everyone back?

  16. Yes, this is called multi-stakeholder co-op. You can even hold a share for a community environmental partner.
    Interestingly, Michael Porter's work on "stakeholders" (not shareholders) is supportive of this approach.

  17. This a little off-topic, but I would like Prof. Wolff to address the effects of competition on wages in worker cooperatives in a hypothetical rise in coop organization competing against capitalist firms.

    For example, what if multi-billion dollar businesses like Walmart or Amazon started paying workers exponentially higher wages as a means of thwarting an interest in socialistic firms with more horizontal payment structures given the fact that the coops appear on the scene with fewer assets? How exactly could worker coops compete in the face of promises of significantly higher pay from companies who are more than capable of affording it, even at the cost of taking a bit of a hit in their bottom line?

    I think the real-world effects of competition on wages in worker coops is an issue that's not being taken seriously by socialists who advocate competition against capitalist firms as a means of overturning capitalism. Perhaps I'm wrong, but nevertheless I firmly believe we need a serious conversation about this, rather than relying on theory alone.

  18. when will people realize that the profit motive is no longer a suitable way to run society? and when will we stop using “human nature” as a defense for a greed-incentivizing economy?

  19. Sure, go ahead and sue them out of existence for fires that their necessary equipment may or may not have caused. Sue all of the power companies out of existence, see how that works out. PG&E might be gone, but the fires aren't going away. Now you have one less company to facilitate competition in that industry. You don't think a state-run supplier would cause fires with their equipment in that tinder box of an environment? You'll rage, but you know I'm right.

  20. Why were there no workers co-ops in socialist China?

    Hope you have recovered from the beatings from Epstein a few weeks back.

  21. Just texted someone in CA and asked about any effeort to make PG&E a public utility. Seattle City light is, for example.
    Consumers have a say.

  22. Guys, there are some trolls in the comment section. Bother them not, for they are being "paid" by their capitalist masters to pester the Inevitable system.

  23. Two questions for Professor Richard Wolff
    Dear Professor Wolff
    First of all, I would like to warmly greet you, and the entire Democracy at Work team, for your work in promoting Marxism. I’d especially like to single out David Harvey about his lectures on Marx Capital.
    My name is Michał Nowicki, although on the Internet I am known rather as Camarade Michael and I am the author of the Rebirth of Communism YT channel. I've been watching films with your participation for about a year now, and we've even translated some of the films to Polish. I also quite often refer to your lectures in my videos. Thanks to mine and my comrades’ publicity, you have slowly become a person well-known in Poland both among people with leftist views and among anti-communists.
    Just like you, I am a Marxist, although we share different views as to Marx's famous eleventh thesis on Feuerbach. We Polish communists describe ourselves as continuators of the Bolshevik tradition and our model is rather Lenin and the October Revolution than Roosevelt and New Deal.
    Our social status in the capitalist system is also different. I am a worker and have to admit that a scientific career for Marxists is simply impossible in an anti-communist country such as Poland.
    I have two questions for you about my country – Poland.
    The first question concerns Polish capitalism. Recently we celebrated in Poland the 100th anniversary of Poland regaining independence. We divide this 100-year period into 50 years of capitalism (1918-1939) (1989-2019) and 45 years of socialism, plus of course World War II.
    Why is Polish capitalism so backward/retarded? We can observe the same atrocities/defects both before the war and after 1989. Mass unemployment, starving children, problems with access to housing and much more. With all my criticism towards capitalism, I must admit that it was in some ways an innovative system in the US or Western Europe. For example, in the welfare state era an average American worker could afford a decent life.
    In capitalist Poland, a worker’s life is always miserable. In capitalist Poland there is no innovation, no ideas we’d call here literally a ‘Polish technical thought’. In capitalist Poland, Polish car factories were even being massively closed. Both before the war and after 1989, Polish capitalism is completely dependent on Western countries and our role is reduced to the one of assembly workers.
    In short, the capitalist system is a curse for Poles, and I am all the more surprised by the fact that many Poles love this system so much. Me and my comrades, we believe that in the capitalist system Poland will always be a third category country, there will always be misery in us and I am not even able to understand how this system can be supported in Poland.
    The second question will be much shorter. Why did many Westerners, including American Marxists, support counter-revolutionary forces in Poland, led by Lech Walesa, whose goal was to restore capitalism?
    Thank you in advance for your answer, which we will definitely translate to Polish. I hope that one day you will visit our country, where we will organize a debate with some Polish equivalent of the anti-communist freak like Jordan Peterson.
    Communist Greetings
    Michał Nowicki
    https://www.youtube.com/watch?v=vQS7UdPYEI8

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