[PEN-L:32909] Re: Re: United Airlines and market socialism

[Michael Perelman <michael@xxxxxxxxxxxxxxxxx>]

United Airlines does not seem to be a clean test of market socialism.
Workers got nominal ownership and three seats on the board.  Even so, the
article that Lou posted was correct in asserting that that the worker
owned firms would have to follow market laws and therefore not really get
a chance for socialism.  Marx suggested that huge capitalist forms would
create a shell from which socialist organizations could emerge.  I don't
buy that idea either.

I will leave it there rather than to start a new discussion about the
merits of market socialism.

On Mon, Dec 09, 2002 at 08:11:44AM -0800, andie nachgeborenen wrote:
> I venture into anything approaching dialogue with LP
> with great trepidation. Nonetheless, I'll make two
> comments. One is that I don't agree with Stone &
> Bowman that market socialism would "properly launched"
> tend to displace capitalism even if worker ownership
> were superior on efficiency grounds. This was a
> proposition originally entertained by JS Mill. I have
> a short paper on this topic ("Where Did Mill Go
> Wrong?") that I was thinking of someday working up for
> publication; I could post it to those who might be
> interested. I'd appreciate comments.
>
> The second is that it's an obviosu fallacy to conclude
> from the the bankruptcy of United that worker
> ownership, much less market socialism (not the same
> thing) would never work. LP would bridle at the
> suggestion that the much more spectacular failure of
> Soviet communism shows that planning can't work,
> although there the argument is much stronger --
> something like planning was ther tried on a society
> wide basis for a long time. The failure of a single
> enterprise with partial worker ownership for about 15
> years, little worker input, and no self-management,
> shows us even less, far less, about the prospects for
> worker self-managed market socialism. jks
>
> --- Louis Proyect <lnp3@xxxxxxxxx> wrote:
> > In a paper titled "Worker Ownership on the Mondragon
> > model: Prospects
> > for Global Workplace Democracy"
> > (www.workersnet.org/bowman_stone_monograph.htm)that
> > I first heard
> > defended at the Brecht Forum about 5 years ago,
> > Elizabeth A. Bowman and
> >   Bob Stone argue that worker ownership under
> > capitalism can eventually
> > bring about socialism. They say, "Once such a
> > cooperative sector of the
> > world economy is properly launched, it will tend to
> > displace capitalist
> > firms, ultimately saturating production with more
> > socialist property
> > relations and unraveling essentials of capitalism
> > itself."
> >
> > If anything, the degeneration of Mondragon itself
> > should make us think
> > twice about this approach. But the bankruptcy of
> > United Airlines, a
> > worker-owned firm, should even go further and make
> > us question whether
> > worker ownership buys the working-class anything,
> > even in terms of a
> > decent life under capitalism.
> >
> > This is from www.wsws.org, a website that blends
> > useful analyses such as
> > this with bonkers Healyite ultraleftism:
> >
> > So-called employee-owned companies are also
> > capitalist enterprises. They
> > operate to make a profit and are subject to all the
> > laws of the
> > capitalist market. They must meet competition on the
> > national and global
> > arena through the capitalist methods of cost-cutting
> > and downsizing.
> >
> > Even the claim that workers are the genuine owners
> > of United Airlines
> > and other "employee-owned" companies is false. It is
> > the banks and
> > financiers who funded the deal who are the real
> > owners.
> >
> > These "worker buyouts" follow a definite pattern.
> > Generally a company
> > that is in trouble turns to its unions for
> > concessions in an attempt to
> > force the burden of the crisis onto the backs of the
> > workers. There are
> > threats of mass layoffs or closure. Workers are told
> > they have no choice
> > but to give up huge cuts in pay and accept the
> > destruction of working
> > conditions.
> >
> > They are told they must agree not to strike. In
> > exchange they are given
> > shares of stock in the company, usually with the
> > stipulation that the
> > shares cannot be sold for a certain number of years.
> > More often than
> > not, the shares often turn out to be worthless.
> >
> > Take the case of McLouth Steel, a "worker-owned"
> > company in Michigan
> > that went bankrupt and closed in 1996, following a
> > 1988 buyout organized
> > by the United Steelworkers union. At the end,
> > McLouth workers with the
> > highest seniority were earning pay barely half that
> > of workers at other
> > major mills. When the mill finally closed, the
> > supposed worker-owners
> > were not even given advance notice. Most learned
> > about it through the TV
> > news and the newspapers.
> >
> > In the case of United, while the employees have been
> > given a nominally
> > controlling share of stock, 53 percent, real control
> > of the company
> > still rests in the hands of the same management team
> > as before. The
> > beneficiaries have not been the workers, but the
> > union bureaucrats. The
> > three airline unions each obtained one seat on the
> > company board of
> > directors.
> >
> > Workers paid for their stock by handing over more
> > than $5 billion in
> > concessions and agreeing to other cost-cutting
> > measures, such as the
> > replacement of some unionized jobs with contract
> > employees. The buyout
> > agreement created a low-cost subsidiary, United
> > Shuttle, where workers
> > are paid at a rate 30 percent below Southwest
> > Airlines, United's major
> > short-haul competitor.
> >
> > In a letter to the United Airlines board of
> > directors filed with the
> > Security and Exchange Commission, the Air Line
> > Pilots Association and
> > the International Association of Machinists
> > declared, "We believe that
> > our plan will catapult the company light-years ahead
> > of its competitors
> > by enabling it to serve the global community more
> > flexibly and
> > efficiently than any other major American carrier
> > and to compete head to
> > head with 'low-cost carriers' in the short-haul
> > marketplace."
> >
> > full:
> >
> http://www.wsws.org/correspo/1998/may1998/sj-m5.shtml
> >
> > --
> >
> > The Marxism list: www.marxmail.org
> >
>
>
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--
Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael@xxxxxxxxxxxxxxxxx