Month: January, 2014
Letter from Ho Chi Minh to the Indochinese Communist Party
worker | January 28, 2014 | 8:27 pm | Action, Communist Party of China, Ho Chi Minh | Comments closed
Ho Chi Minh

Ho Chi Minh

Kwelin, May 10, 1939

Dear comrades: In the past, in my opinion and that of a good number of comrades, Trotskyism has seemed a matter of struggle between the trends within the Chinese Communist Party. So they almost were not paying attention. But shortly before the outbreak of the war, more precisely since the end of 1936, and especially during the war, the criminal Trotskyist propaganda has opened our eyes. Then we started to study the problem. And our study has led us to the following conclusions:

1  The problem of Trotskyism is not a struggle between the trends within the Chinese Communist Party. Because between Communists and Trotskyists there is no tie, absolutely no tie. It is a matter that concerns the whole people: the fight against the country.

2  The fascist Japanese and foreign fascists know. So, looking to try to create disagreements, to mislead public opinion and undermine the popularity of the Communists, making people believe they are communists and Trotskyists in the same field.

3  The Chinese Trotskyists (like the Trotskyists in other countries) do not represent a group, much less a political party. They are nothing more then a criminal gang, the hounds of Japanese fascism (and of international fascism).

4  In all countries, the Trotskyists gave good nicknames to mask their dirty work of bandits. For example, in Spain, their names are Workers Party of Marxist Unification (POUM). Did you know that it is they who are the nests of spies in Madrid, Barcelona and elsewhere in the service of Franco? It is they who organized the famous fifth column, agency of the army intelligence of the fascist Italians and Germans. In Japan, they are called Marx-Engels-Lenin League (MEL). The Japanese Trotskyists attract young people to their league, then reported them to the police. They seek to penetrate the Japanese Communist Party in order to destroy it from within. In my opinion, the French Trotskyists, now organized around the Proletarian Revolution Group (1) set a goal to sabotage the Popular Front. On this subject, I think you are better informed than I am. In our country of China [referring to Indochina, N. E.], Trotskyists are grouped into formations like La Lutte, War against the Japanese, Culture and Red Flag.

5  The Trotskyists are not only enemies of communism, but also enemies of democracy and progress. They are the most infamous traitors and spies. Maybe you have read the indictments of the processes in the Soviet Union against the Trotskyists. If you have not read them, I advise you to do so and to read them to your friends. It is a very useful reading. It will help them see the true disgusting face of Trotskyism and Trotskyists. Here, allow me to extract some passages relating directly to China. The true repugnant face of Trotskyism.

Before the court, the Trotskyist Rakovsky (2) confessed that in 1934 when he was in Tokyo (as representative of the Soviet Red Cross) a high character of the Japanese government had told him: We have the right to expect from the Trotskyists a change in strategy. I will not go into details. I only wanted to say that we expect from the Trotskyists, actions that favor our intervention in the affairs of China. Responding to the Japanese, Rakovsky said: I will write to Trotsky about this. In December 1935, Trotsky sent to his supporters in China, instructions that repeatedly emphasized that phrase: Do not create obstacles to the Japanese invasion of China. And how have Trotskyists in China acted? They are in a hurry to know, is it not true? But, beloved comrades, I can not respond more in my next letter. Do not you recommend me to write short letters? Hope to see you soon.

1939: About Trotskyism (Letter to the Communist Party of Indochina)


(1) Revolucion Proletaria: Newspaper published by a group of French revolutionary syndicalists.

(2) Revolutionary leader in the Balkans before the First World War, Ukrainian Prime Minister from 1919 to 1923, was then Soviet ambassador in Paris and one of the founders of the Left Opposition. Expelled from the CPSU in 1927 continued his work to capitulate in 1934

Mass line, mass work, Marta Harnecker, Willamette Reds and why Trotskyism is wrong
worker | January 28, 2014 | 8:05 pm | Action | Comments closed

Here is a link to an interesting article

Book Review: The Brothers– John Foster Dulles, Allen Dulles, and Their Secret World War
worker | January 28, 2014 | 7:59 pm | Action | Comments closed

– from Zoltan Zigedy is available at:

In a different time, a time when we escape the cultural waste excreted by decadent capitalism, a time without Fast and Furious 23 and the abominable cable television mini-series Spartacus, some creative and capable filmmaker might make a fascinating bio-pic out of the lives of the Dulles brothers, Allen and John Foster. Until then, we must make do with a new biography of the important duo (The Brothers, Times Books, 2013) written by Stephen Kinzer, and another, hopefully soon-to-be-available book on the subject by David Talbot.

Kinzer’s book gives a fascinating, but unsatisfying look at the lives of two public figures who wielded an unprecedented concentration of global power. For the better part of a decade– from 1953 to 1959– the two brothers together shaped nearly the entire US policy toward the rest of the world. As director of the Central Intelligence Agency, brother Allen decided the US clandestine activities toward friends and foes alike. At the same time, he shaped the extent and few limits of the newly founded agency.

Brother John Foster did the same for the US’s overt role in the world. As President D. D. Eisenhower’s Secretary of State from 1953 until Dulles’s death in 1959, he served the same goals and interests as his brother.

To read more, go to:

State of the union: Inequality!
worker | January 28, 2014 | 7:03 pm | Action, Analysis, Economy | 2 Comments

By James Thompson

As we anxiously await our annual peptalk by the president which is usually referred to as the “State of the Union” speech, many commentators and pundits are already producing vast quantities of hot air in an effort to excite the audience. However, in spite of their best efforts, many in the audience are frantically searching for something interesting to watch and give them hope or at least entertain them on TV tonight.

Inequality is a problem

On January 25, 2014, our learned professor of economics, Paul Krugman, wrote a Keynesian analysis of our current economic situation “Obama should focus on rising inequality.” It is his peptalk in preparation for the supreme peptalk. He starts with a quote from Keynes from 1936:

“The outstanding faults of the economic society in which we live are its failure to provide for full employment and its arbitrary and inequitable distribution of wealth and incomes.”

Prof. Krugman instructs us that “If, as has been widely reported, Pres. Barack Obama devotes much of his state of the union address to inequality, everyone should be cheering him on.”

He predicts instead that the “usual suspects on the right will, as always when questions of income distribution comes up, shriek ‘Class warfare!'” He also predicts that more sober voices will argue that jobs should take center stage in the grand follies of the state of the union address.

Prof. Krugman goes on to argue that inequality “help set the stage for our economic crisis, and that the highly unequal distribution of income since the crisis has perpetuated the slump, especially by making it hard for families in debt to work their way out.” He notes that high unemployment has destroyed workers’ bargaining power and has become a source of rising inequality and stagnating incomes “even for those lucky enough to have jobs.”

Prof. Krugman fails to explain these and other mysteries to the huddled masses clutching their newspapers or iPads reading his often repeated lines. He fails to explain that high unemployment is detrimental to the condition of the working class for many reasons. When unemployment is high, this means that the working class has fewer jobs and that the distribution of these jobs will be uneven. As a result, workers have overall less purchasing power. When workers purchase fewer goods and services, many companies choose to downsize or close in order to preserve capital which results in more loss of jobs. There is a spiral effect to this economic cyclical activity which eventually leads to another crisis. The crisis comes about when the amount of goods available for purchase substantially exceeds the amount of goods purchased. Economic crises are crises of overproduction as clearly demonstrated by Karl Marx in his scientific study of capitalism “Capital.”

Why is there inequality?

Back to the issue of “inequality”, no one is posing the crucial question which should be President Obama’s major challenge tonight “Why is there inequality?”

Marx also proved in his work on capitalism that the aim of capitalists is to produce continuing increasing profits. Profits are based on the amount of wealth extracted by the capitalist from the wealth produced by the worker. In other words, when a worker works, he/she is paid a wage by the capitalist which is usually less than the wealth she/he produces. The capitalist steals the difference between the amount of wealth produced and the amount paid out in wages and this is the basis of profits. In order for profits to increase, wages must fall. This is the basis of the inequality between the capitalist and the worker.

In 1936, another economist not well known to people in the US wrote about another aspect of inequality under capitalism. On page 213 of his book “Political Economy,” A. Leontiev wrote in a section entitled “The law of uneven development under imperialism”:

“In the capitalist system individual enterprises, individual branches of industry and individual countries develop unevenly and spasmodically. It is evident that with the anarchy of production prevailing under capitalism and the frenzied struggle among the capitalists for profits, it cannot be otherwise.
This unevenness of development is manifested with particular acuteness in the epoch of imperialism, and becomes a decisive force, a decisive law.”

This uneven economic development also contributes to inequality.

Leontiev’s work is based on the work of Lenin, particularly “Imperialism, the highest stage of capitalism.”

While Keynes identified inequality as a problem, Leontiev, Lenin and Marx understood the reason for it.

So, we can expect an upbeat view of inequality from the president. We will be likely to hear of economic reforms to address the problem which have been trotted out repeatedly over the history of capitalism. Anything threatening in the slightest way the position of the wealthy will be hysterically attacked by their right wing lapdogs. The left-wing lapdogs will defend the meaningless reforms tossed out by the president and will attempt to spin the reforms as a breakthrough. Even if the reforms were meaningful, it must be remembered that any reforms can and will be taken back by the ruling class when it is convenient for them.

However, such reforms are like spraying perfume on a pile of manure in an effort to make it smell better. The reality is that instead of improving the smell of the manure, it will actually make it smell worse. So it goes with most reforms with the exceptions of Social Security, Medicare and Medicaid as well as the Veterans Administration.

How can inequality be fixed?

What will fix the problem of inequality is another question for the president to answer tonight. One answer would be to throw out the pile of manure, i.e. capitalism itself. Unfortunately, there is a lot of manure to clean out and advancing the economic system towards socialism will take time. In the meantime, meaningful reforms could be proposed and fought for through the legislative process. Some examples of meaningful reforms might include: 1. Universal health care. This would be a true job creator and at the same time reduce corporate waste. It would be highly beneficial to workers and this has been recognized by many elements among organized labor which have endorsed it. 2. Legal services for all. If all people had equal access to quality legal representation, mass incarceration would be reduced. This would also be a job creator. 3. Free higher education for all. The exorbitant costs of higher education for students these days contributes to inequality. 4. Reduce the military budget by 75% and transfer the savings to programs that benefit people such as 1, 2, and 3 above. 5. Public funding for the arts, culture and sports should be dramatically increased. This would also be a job creator. 6. Inheritance should be made illegal except in the case of permanently disabled dependents. Estates of deceased persons should become the property of all the people. 7. Tax incomes above $500,000 a year at a 90% level. 8. Tax the profits of private corporations at a 75% level. Severely penalize any individual or corporation caught transferring funds overseas to avoid US taxes. 9. Severely penalize any individual or corporation caught moving industries overseas in order to chase low wages. 10. Fund meaningful unions and severely penalize any individual or corporation caught attempting to bust any union. 11. Enact and enforce the Employee Free Choice Act. 12. Enact and enforce legislation to criminalize and severely penalize discrimination in any form, e.g. racism, sexism, ageism, classism, etc. 13. Close all overseas military bases to include Guantánamo. 14. Raise the minimum wage to $20 an hour. 15. Long-term care for all. Provide quality assisted living and nursing home care to all people. 16. Comprehensive and equitable immigrants’ rights to include a quick, easily accessible application process for full citizenship. 17. Decriminalize petty drug use and provide comprehensive drug rehabilitation services for all.

These programs would help reduce the problem of inequality but until the manure is thrown out, inequality will continue to be a problem.

Statement of the WFTU on the creation of CELAC
worker | January 22, 2014 | 9:03 pm | Action, International, Labor | Comments closed



With great satisfaction, WFTU welcomes the creation of CELAC as a process of extraordinary strategic meaning for the sake of our region, by recognizing the basis identifying us, without the mediation of foreign hegemonic interests, and as an expression of the need for claiming people´s sovereignty.

Beyond the diversity of creed and ideologies, there has been recognition that the economic model and policies imposed from Washington are already exhausted, and the necessity of prioritizing the most significant interests of the country by a systematic effort, in a coordinated and committed way according to the people´s desires.

We are very concerned with the way in which the world economic situation is endangered, in the middle of the economic crisis, the turbulence of the financial markets and the difficulties with tax policies in many places. The volatility of prices in basic goods and the pressures exerted against food security are key problems to be solved.

We are aware that worldwide consequences of these problems fall mainly in the working class, and especially in poorest people. Although Latin America and the Caribbean, according to key international organizations, is not the most affected region, the main records of labor market, inequality and poverty, are showing that vulnerability and the region´s main problems have not been solved yet.

Again and again it is repeated that Latin America and the Caribbean is the most unequal region on Earth, but still we have a lot to do in order to break the vicious circle of inequality and poverty.

In this environment, we are conscious that in nations facing such facts, with sociopolitical models more radicals and leaning to change, their people and governments suffer from an increasing aggressive actions on the part of United States government and its allies, which adopt new and assorted ways, ranging from the allocation of big amounts of money for subversion, to the increase of military installations, with the evident proposal of pushing for setbacks, and in order to intervene militarily in case they feel that their interests and greed over the natural resources of all kind, are at stake; particularly oil and natural gas, all of which provoke war of pillage in other regions.

Because of all above mentioned issues, today more than ever, the appeal for unity of the working class takes validity, facing the attempts for subversion and lulling of our struggle, by mean of a conciliating and compromising speech, with neoliberals’ ideas, that already demonstrated their failure and have been rejected, because, among other facts, the labor policies regarding the so called flexibility in employment, make it precarious, and the same happens with wages, the workers´ living conditions and the limitations of the freedom to organize themselves.

Neoliberal policies have not solved any of the problems that are the core of people´s aspirations.

♦ We have to strengthen the class oriented trade union movement, in order to encourage unity of action of workers and their people, in favor of mobilization and conformation of proposals beyond the eminently vindicating and economic union framework, generating alternative programs and proposals where aspirations of the whole population be reflected.

♦ It is unavoidable for us to oppose an attempt to criminalize the trade union movement, due to its positions defending national wealth, social transformations leading to respect and promote actual human rights, social and environmental justice, fostering full and dignified employment, sustainable way of living, basic health services, education, housing, among others.

Likewise, we cannot forget our opposition regarding violence by organized crime, but also of the use of the State´s armed forces against the population.

♦ It is necessary for us to override the root causes which limit a greater degree of workers´ participation in the process leading to regional integration, even with the diversity of our positions and affiliations, and under the key premise around unity, common points permitting us to go ahead in a joint and articulated way.

♦ We should insist that every country must adopt its own decisions in an environment of peace, stability, justice, democracy and respect for human rights.

♦ Our uncompromising rejection to the presence of military installations requires firmness from CELAC, and also in relation to extortion on the part of rich countries conditioning economic assistance to the acquisition of military equipment. Money that is allocated for weapons should go for the solution of problems related to services and social protection, needed by people and workers.

♦ The integration of our countries should help in the commitment to build an international order more just, equitable and harmonic, founded in the respect for international law and the principles of the United Nations Charter, among them the sovereign equality of States, and the peaceful solution of conflicts, favoring justice, peace, development and understanding among peoples.

♦ CELAC needs to stay away from Bretton Woods agreements, by creating, more than a common account unit, and a regional monetary, commercial and financial system incorporating a chamber of payments compensation with a financial fund for the development of entities like Banco del Sur (Bank of the South).

♦ Member Governments of CELAC should reject IMF mechanisms and other international financial institutions that impose programs going against interests and rights of the working class, by mean of astringency, privatization and pillage policies of wealth belonging to our people.

♦ We condemn the implementation of Free Trade Agreements and other ways of association with United States, Canada and the European Union, which have removed jobs, and have subjugated our national economies to uncertainties and imbalances of international markets.

♦ In the Community of Latin American and Caribbean States (CELAC), we have to influence in order to get fundamental structural changes for the transformation of the whole world economic and financial system, trying to avoid another crisis like the one we are facing today.

♦ The external debt should be canceled. It has been already paid many times.

♦ We hope that CELAC will encourage coordinated investment policies, technological innovation, rational use of natural resources and the environment, fiscal, tax, commercial, migration, educational, health and security and social prevention measures, towards the creation and stabilization of jobs, and the protection of jobless people.

♦It is very important for CELAC to guide national economic policies towards productive investments, according to national interests, urging investors to comply with labor rights and be subjected to national courts in case of violations.

· Promote a wage policy which greatly increases payments to all workers, and by that means to push the consumption of goods and services, and encouraging at the same time investments and jobs.

♦ We demand CELAC to sponsor a free and public education, in order to forge characters based upon culture in its broadest meaning, with values such as, identity, solidarity, reciprocity, and to develop scientific knowledge according to workers’ and people´s needs.

♦ We urge each country to have a high quality and free health care system, covering all the requirements of people.

♦CELAC should impose itself since the beginning, going ahead in the formation of alternatives regarding food, energy and financial sovereignty, in the defense of environment and against the effects of climate change; claiming the need for the existence of peace, against the militarization and State terrorism, and where the attention and the search of solutions to the serious social problems we are facing, be the base of our determination.

CELAC governments should assure:

· Rights for a free and democratic trade union organization, facing violators of rules of Covenant 87 of ILO.
· Tutelage for representatives and trade union activists against any reprisal affecting their families, their jobs or labor conditions.
· Prohibition and nullification of high-handed or unprovoked firing
· Guarantee for labor justice, specialized in the Law of Labor

Cooperatives: A Cure for Capitalism?
worker | January 17, 2014 | 8:36 pm | Action, Analysis, Economy | Comments closed

by Zoltan Zigedy is available at:

Co-ops– cooperative economic enterprises– have been embraced by significant groups of people at different times and places. Their attraction precedes the heyday of industrial capitalism by offering a means to consolidate small producers and take advantage of economies of scale, shared risk, and common gain.

At the advent of the industrial era, cooperatives were one of many competing solutions offered to ameliorate the plight of the emerging proletariat. Social engineers like Robert Owen experimented with cooperative enterprises and communities.

In the era of mass socialist parties and socialist construction, cooperatives were considered as intermediate steps to make the transition from feudal agrarian production towards socialist relations of production.

Under the capitalist mode of production, co-ops have filled both employment and consumption niches deferred by large scale capitalist production. Economic activities offering insufficient profitability or growth have become targets for cooperative enterprise.

In theory, cooperatives may offer advantages to both workers and consumers. Workers are thought to benefit because the profits that are expropriated by non-workers in the capitalist mode of production are shared by the workforce in a cooperative enterprise (less the present and anticipated operating expenses and investments, of course). Many argue as well that the working conditions are necessarily improved since workplace decisions are arrived at democratically absent the lash associated with the profit-mania of alienated ownership (though little attention is paid to the consequences for productivity and competitiveness against capitalist enterprises).

Consumers are said to benefit when they collectively appropriate the retail functions normally assumed by privately owned, profit-driven outlets. Benefit comes, on this view, by purchasing from wholesale suppliers, collectively meeting the labor requirements of distribution, and enjoying the cost-savings from avoiding a product markup (little attention is paid to limitations on participation dictated by class, race, or gender; the wholesale quantity discounts enjoyed by capitalist chains are also conveniently overlooked).

A case can also be made for the cooperator’s dedication to quality, safety, and health- promotion.

In reality, cooperatives in the US are largely indistinguishable from small businesses. Like small private businesses, they employ few people and rely heavily upon “sweat equity” for capitalization. Like other small businesses, US cooperatives operate on the periphery of the US economy, apart from the huge monopoly capitalist firms in manufacturing, service, and finance.

Cooperatives as a Political Program

Since the demise of the Soviet Union and Eastern European socialism, many on the US Left have rummaged for a new approach to the inequalities and injustices that accompany capitalism. Where more than a decade of anti-Communist purges had wrung nearly all vestiges of socialist sympathy from the US psyche, the fall of the ludicrously-named “Iron Curtain” found Leftists further distancing themselves from Marxian socialism. Hastily interning the idea of socialism, they reached for other answers.

It is unclear whether this retreat was actually a search for a different anti-capitalist path or, in reality, grasping an opportunity to say farewell to socialism.

In recent years, several Leftists, “neo-Marxists”, or fallen Marxists have advocated cooperatives as an anti-capitalist program. Leading advocates include the Dollars and Sense collective centered around the University of Massachusetts, Amherst, GEO (Grassroots Economic Organizing), Professor Gar Alperovitz, Labor Notes, United Steel Workers of America, and media Marxist-du-jour, Professor Richard Wolff. Some are organizing around the idea of a “New Economy” or a “Solidarity Economy”, with cooperative enterprises as a centerpiece.

Now coops are not foreign to Marxist theory. After World War I, the Italian government sought to transfer ownership of unused land from big estates, latifondi, on to peasants, especially veterans. As much as 800,000 hectares were thus passed on to poor peasants. Through this process and land seizures, the number of smallholders increased dramatically. Socialists and Communists urged the consolidation of these holdings into collectives, agricultural cooperatives. Certainly more than 150,000 hectares ended up in cooperatives. In those circumstances, the rationale was to increase the productivity, to save the costs, to enhance the efficiency of peasant agriculture in order to compete with the large private estates. Cooperatives were not seen as an alternative to socialism, but a rational step away from near feudal production relations toward socialism, a transitional stage.

Likewise, in the early years of the Soviet Union, Communists sought to improve small-scale peasant production by organizing the countryside into collective farms, producers’ cooperatives. They saw cooperative arrangements as rationalizing production and, therefore, freeing millions from the tedium and grind of subsistence farming and integrating them into industrial production. Through mechanization and division of labor, they expected efficiency and productivity to grow dramatically, speeding development and paving the way for socialism.

Again, cooperative enterprises counted as an intermediary for moving towards socialist relations of production. Thus, Marxists see the organization of cooperatives as a historically useful bridge between rural backwardness and socialism.

But modern day proponents of cooperatives see them differently.

“The ‘evolutionary reconstructive’ approach is a form of change different not only from traditional reform, but different, too, from traditional theories of ‘revolution’” says Gar Alperovitz of cooperatives and other elements of the “Solidarity Economy” (America beyond Capitalism, Dollars and Sense, Nov/Dec, 2011). Like most proponents, Alperovitz sees cooperatives as pioneering a “third way” between liberal reformism and socialist revolution. However, a minority of advocates (Bowman and Stone, “How Coops can Change the World”, D&S, Sept/Oct, 1998, for example) see cooperatives as the “best first step towards that goal [of a planned, democratic world economy]. They suggest that the correct road is through “spreading workplace democracy” and on to socialism.

Whether postured as a “third way” or a step towards socialism, it is difficult to get a clear picture of the extent and success of the cooperative movement; it is equally challenging to gather a sense of how it is suppose to function in a capitalist economy.

As for numbers, Alperovitz (“America beyond Capitalism”, D&S, Nov/Dec, 2011) muddies the waters by citing the numbers of “community development corporations” and “non-profits” (Alperovitz, 2011) as somehow strengthening the case for cooperatives. The fact that community development corporations have wrested control of neighborhoods from old-guard community and neighborhood groups and embraced developers and gentrification causes him no distress. Of course “non-profits” count as an even more dubious expression of a solidarity economy. In a city like Pittsburgh, PA, mega-non-profits remove 40% of the assessed property from the tax rolls. These non-profits not only evade taxes, but divide enormous “surpluses” among super-salaried executives. They beggar funding from tax shelter trusts and endowment funds, completing the circle of wink-and-a-nod tax evasion. Of course there are, as well, thousands of “non-profits” that pursue noble goals and operate on a shoestring.

Alperovitz alludes to credit unions as perhaps sharing the spirit of cooperation without noting the steady evolution of these once “third way” institutions towards a capitalist business model. Insurance companies also share this evolution, but they are too far down this path of transition to capitalist enterprise to be credibly cited by Alperovitz.

Alperovitz leaves us with “…11,000 other businesses that are owned in whole or part by their employees.” In this slippery total of whole or partial worker ownership are included ESOPs– Employee Stock Ownership Programs, a touted solution to the plant closing surge that ripped through the Midwest in the 1980s. Alperovitz pressed vigorously for ESOPs in the steel industry in the 1980s as he does cooperatives today. When asked to sum up their track record, one sympathetic consultant, when pressed, said: “I don’t think its been a real good record of success. Some have actually failed…” (Mike Locker, “Democracy in Steel?”, D&S, Sept/Oct, 1998). But we get no firm number for cooperatives in the US.

Another advocacy group for cooperatives gave a more candid picture of the cooperative movement in the Sept/Oct, 1998 issue of Dollars and Sense (“ESOPS and Coops”). A study by the Southern Appalachian Cooperative Organization claimed that there were 154 worker-owned cooperatives employing 6,545 members in the US. In sixty percent of the 154, all workers were owners. Median annual sales were $500,000 and 75 percent had 50 or fewer workers. Twenty-nine percent of the coops were retail, twenty-eight percent were small manufacturing, and twenty-three per cent food related businesses.

Interestingly, the same article claims that there were approximately 11,000 ESOPs in 1988 (source: National Center of Employee Ownership). If we take Alperovitz’s 2011 claim seriously, there has been little growth in the ensuing thirteen years of “…businesses that are owned in whole or part by their employees…”.

From this profile, we can conclude that cooperatives in the US are essentially small businesses accounting for a tiny portion of the tens of millions of firms employing less than 50 employees. As such, they compete against the small service sector and niche manufacturing businesses that operate on the periphery of monopoly capitalism. Insofar as they pose a threat to capitalism, they only threaten the other small-scale and family owned businesses that struggle against the tide of price cutting, media marketing, and heavy promotion generated by monopoly chains and low-wage production. They share the lack of capital and leverage with their private sector counterparts. Cooperatives swim against the tide of monopolization and acquisition that have virtually destroyed the mom and pop store and the neighborhood business.

Some of the more clear-headed advocates acknowledge this reality. Betsy Bowman and Bob Stone concede the point: “…Marx argued in 1864 that capitalists’ political power would counteract any gains that coops might make. This has proven true! When capitalists have felt threatened by cooperatives, they have conducted economic war against coops by smear campaigns, supplier boycotts, sabotage, and, especially, denying credit to them.” (Bowman and Stone, D&S, Sept/Oct, 1998).


Until recently, cooperators and their advocates had one very large arrow in their quiver.

When pressed on the apparent weakness of cooperatives as an anti-capitalist strategy, they would counter loudly: “Mondragon!”.

This large-scale network of over 100 cooperative enterprises based in Spain seemed to defy the criticisms of the cooperative alternative. With 80,000 or more worker-owners, billions of Euros in assets and 14 billion Euros in revenue last year, Mondragon was the shining star of the cooperative movement, the lodestone for the advocates of the global cooperative program.

But then in October, appliance maker Fagor Electrodomesticos, one of Mondragon’s key cooperatives, closed with over a billion dollars of debt and putting 5500 people out of work. Worker-employees lost their savings invested in the firm. Mondragon’s largest cooperative, the supermarket group Eroski, also owes creditors 2.5 billion Euros. Because the network is so interlocked, these setbacks pose long term threats to the entire system. As one worker, Juan Antonio Talledo, is quoted in The Wall Street Journal (“Recession Frays Ties at Spain’s Co-ops”, December 26, 2013): “This is our Lehman moment.”

It is indeed a “Lehman moment”. And like the Lehman Bros banking meltdown in September of 2008, it makes a Lehman-like point. Large scale enterprises, even of the size of Mondragon and organized on a cooperative basis, are susceptible to the high winds of global capitalist crisis. Cooperative organization offers no immunity to the systemic problems that face all enterprises in a capitalist environment. That is why a cooperative solution cannot constitute a viable alternative to capitalism. That is why an island of worker-ownership surrounded by a violent sea of capitalism is unsustainable.

The failures at Mondragon have sent advocates to the wood shed (see ). Leading theoretical light, Gar Alperovitz, has written in response to the Mondragon blues: “Mondragón’s primary emphasis has been on effective and efficient competition. But what do you do when you are up against a global economic recession, on the one hand, or radical cost challenges from Chinese and other low-cost producers, on the other?”

What do you do? Shouldn’t someone have thought of that before they offered a road map towards a “third way”? Are “global economic recessions” uncommon? Is low cost production new? And blaming the Chinese is simply unprincipled scapegoating.

Alperovitz goes on: “The question of interest, however – and especially to the degree we begin to face the question of what to do about larger industry – is whether trusting in open market competition is a sufficient answer to the problem of longer-term systemic design.” Clear away the verbal foliage and Alperovitz is admitting that he never anticipated that open market competition would snag Mondragon. Did he think that Fagor sold appliances outside of the market? Did he think that Mondragon somehow got a free pass in global competition?

Of course the big losers are the workers who have lost their jobs and savings. It would be mistaken to blame the earnest organizers or idealistic cooperators who sincerely sought to make a better, more socially just workplace. They gambled on a project and lost. Of course social justice should not be a gamble.

The same sympathy cannot be shown for those continuing to tout cooperatives as an alternative to capitalism. If you want to open small businesses (organized as cooperatives), be my guest! But please don’t tell me and others that it’s somehow a path beyond capitalism.

Comrades and friends: It’s impossible to be anti-capitalist without being pro-socialist!

Zoltan Zigedy

Release Margaretta D’Arcy Now!
worker | January 16, 2014 | 10:27 pm | Action, International | Comments closed

15 January 2014

Peace activist Margaretta D’Arcy, who was arrested at her home in Galway City today (15th January) and brought to Limerick Prison to serve a three-month sentence. Ms D’Arcy suffers from Parkinson’s disease and is also being treated for cancer.

She refused to sign an undertaking that she would keep away from unauthorised zones at Shannon Airport, as a result of which her three-month suspended sentence has been activated.

Margaretta D’Arcy and Niall Farrell were sentenced in Ennis District Court in December 2013. Each received a three-month prison sentence, suspended on condition that they enter into a bond to uphold the law for two years and stay out of unauthorised zones at Shannon Airport.

Shannon Airport is a major hub for US warplanes on their way to sow death and destruction in Afghanistan, Iraq and other countries in the Middle East. It is also a transit point for aircraft carrying US military drones, and it is believed that victims of “extraordinary rendition” were transported through the airport.

We would request upon all peace and democratic forces around the world to write to the Irish Government demanding her release.

Alan Shatter, Minister for Justice:

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