6.10 Worker managed and operated cooperatives: Do these mean socialism?

Let's first be clear about the benefits of participant managed and operated enterprises and organizations to any society, whatever the economic system. These include:

  1. On-the-job related learning of workers as both managers and operators (productive habits, skills, knowledge and confidence, all of which can benefit the productivity of the enterprise or organization);
  2. Corresponding improvement in the quality of life of workers, their families and communities, well beyond the confines of the activity of the enterprise or organization; and
  3. Improvements in the quality of the goods or services provided that arise from the greater sum of the knowledge and experience that is brought to bear on their production and provision than would normally be the case in the more typical hierarchically managed enterprise or organization.

When the cooperatives in question are managed by the workers that operate them they establish that a world without capitalists is possible. By preparing working people for self-government, such cooperatives can be steps on the path to an alternative to capitalism. But workers' self-directed enterprises do not alone constitute such an alternative. A genuine green social democracy is also essential, meaning for example that all who participate in the creation of goods and services must also decide collectively how the enterprises' profits are to be allocated – including how the portions that go as taxes to local, state and federal governments are spent. Such democratic decision-making may take a variety of forms and paths but whatever the route must ultimately mean that working people have and exercise the political power to ensure an adequate share of the profits from their productive activity is allocated to the future health of nature and human culture. These latter are the fount of all human productivity. Only when this intergenerational responsibility rests in the hands of the people and is exercised by them rather than by a relatively unaccountable subset of the people has an alternative to capitalism and its inherent ills been achieved.

So long as the cooperative enterprises in question compete as private-for-profit entities in a capitalist market place the result falls short of socialism and certainly does not meet the aims of a green social democracy. As we argued in chapter 3, consequences of a capitalist market economy include the production of income and wealth inequality and corresponding political inequality as well as economic, social and environmental crises.

Those interested in the establishment of worker owned cooperatives within a capitalist market economy are well advised to read monographs like those recommended at the end of this section. These will clarify the essential roles of associated educational activity and financial coops in the success of worker-owned enterprises. In particular, see the monograph by Carl Davidson, who has acquainted himself and his readers with the Mondragon Cooperatives in Spain and a similar initiative in the US and Canada by the United Steelworkers Union. For a theoretical perspective on how worker managed and operated enterprises can be part of the transition to a non-capitalist society, see the recommended monographs by Harnecker, Lebowitz and Wolff in addition to that by Davidson.

On the other hand, there is no successful example yet of a leap from a capitalist society to one characterized by the absence of capitalist markets. At best we can use the knowledge gained from past experience to fashion a transition path away from capitalism, one whose prospects for a totally non-market economy depend on cultural and associated legislative change. In the authors' view, the key elements of a transition away from capitalism include constitutional and practical commitment to:

  1. Reduce income and wealth inequality over time, which can be accomplished in part by including steeply progressive income and inheritance taxes, while immediately taking all necessary steps to effectively reduce if not fully eliminate the power of money over politics;
  2. Translate productivity gains into reduced working hours of all those engaged in the market economy;
  3. Provide for an increase over time in the social wage (or social dividend) that supports the participation of all in the expansion of the non-market economy;
  4. Establish and maintain a bottom-up form of government beginning with direct democracy at the base and representative assemblies at each successively more centralized level of decision making (with every representative immediately accountable to the level that has elected them, including recallable);
  5. Transform the economy to one that ultimately consists exclusively of worker managed and operated units working to meet the aims democratically set by the people, in the meantime recognizing and facilitating the right of all employees to collective bargaining;
  6. In cases of the most serious breaches of labor or environmental laws by a private employer, expropriate the employer and offer the workers the opportunity to manage and operate the enterprise, based on their acceptance of the stewardship responsibilities and usufruct rights for the enterprise and its assets, and subject to the employees' right to retain their former employer(s) in the capacity of fellow workers and managers;
  7. Replace private for profit banking (personal and commercial) with public banking; and
  8. Retain in the hands of the people and their governments the ultimate intergenerational responsibility for the Commons, thus subordinating private property in the form of temporal stewardship responsibilities and usufruct rights during the lifetime of individuals to the collective intergenerational rights of all people and nature.

In relation to the current global system, this change to a transitional economy would be a revolutionary one, equivalent to the changes from the dominance of feudal to capitalist relationships. We have chosen to call this transitional period green social democracy rather than any of the historically experienced variants of socialism to avoid the confusion that the term socialism generates, including its utopian and frequently authoritarian connotations.

For further reading on the same issues from different perspectives see the following monographs: (1) Carl Davidson (2011, Changemaker Publications) New Paths to Socialism: Essays on the Mondragon Cooperatives and Workplace Democracy, Green Manufacturing Structural Reform, and the Strategic Politics of Transition, 126 pages, available for download (eBook or print) for $5 at http://www.lulu.com/spotlight/changemaker ; (2) Marta Harnecker (2012) Conquering a new popular hegemony: Marta Harnecker on 21st Century Socialism 33 pages, available for free online at http://links.org.au/node/3038 ; (3) Michael A. Lebowitz (2010, Monthly Review Press) The Socialist Alternative: Real Human Development 191 pages, especially pp. 73-76 "Self-interest and Yugoslav self-management"; (4) Richard Wolff (2012, Haymarket Books) Democracy at Work: A Cure for Capitalism 201 pages; and (5) Peter Ranis (October 1, 2012) "Worker cooperatives: Creating participatory socialism in capitalism and state socialism" 2 pages available at http://www.democracyatwork.info/articles/2012/10/worker-cooperatives-creating-participatory-socialism


This website was launched September 1, 2010 in support of a green social democratic alternative to neoliberal capitalist policy and practice. The primary result is a work by Charles and Karen McFadden of seven chapters, grouped under the title, Towards a Green Social Democratic Alternative to Capitalism available here in pdf and html formats.

Below under the heading What’s New can be found the most recent materials posted on this website, including opinion pieces, book reviews, articles and selections from the 2017 edition of the main work.  For the interest of new and returning visitors, new materials will be included quarterly.

What's New


Authors' Preface

1.6 The epochal nature of the period we are entering

6.0 The socialism we need against the "socialism" of the 20th century

6.8 Additional concerns about 20th century variants of "socialism"

6.9 The people united!

7.1 Policy alternatives and political movements to advance them


Charles and Karen McFadden, Is revolutionary transformation on the agenda

Charles and Karen McFaddenHumanity on the Brink

Charles and Karen McFaddenMovements of Resistance to Movements for System Change

Charles McFaddenTranslating Green Principles into Education Policy and Practice

Charles and Karen McFadden, The Role of Revolutionaries in the Labor Movement


Charles and Karen McFadden, “The Shape of Water” as an Antidote to the Age of Trump 

Charles McFadden, Decolonizing the U.S. & Canada: The People United for a More Just Sustainable Future

Karen and Charles McFaddenCan emergent early 21st century neo-fascism be defeated without coming to grips with late 20th century restructuring of capitalism into a global system

Karen and Charles McFaddenA Dominant Capitalism or a Sustainable Environment? Why we can't have both.


William I. RobinsonThe Crisis of Global Capitalism and Trump's March to War

William I. RobinsonTrumpism, 21st Century Fascism, and the Dictatorship of the Transnational Capitalist Class


George HewisonWINNIPEG 1919 & THE COLD WAR

George HewisonArt Manuel - "Unsettling Canada

George HewisonThe NDP and LEAP


Albert Einstein, David Swanson, Jill Stein, Chris Hedges, William I. Robinson, and others Selected articles for Winter 2018



1.7 The dynamics of capitalism as a system and the limits of single issue reforms

2.11 The economy in transition towards a new deal for labor and the community

3.1 The challenge of a moribund economic system

3.7 Public banking: A cornerstone of a green social democracy

4.7 Economics and culture

6.5 Using the non-market economy as an opportunity to begin moving beyond capitalism


1.6 The epochal nature of the period we are entering

2.0 Theoretical Perspective: Defining Green Social Democracy

2.5. Socialism and green social democracy in historical materialist theory

4.3 Culture in historical perspective

5.1 Contrasting a green social democratic world with the currently prevailing, but challenged neo-liberal one

6.2 Socialism and capitalism as coexisting social systems


2.11 The economy in transition towards a new deal for labor and the community

5.7 Defeating neo-liberal capitalism: The role of social movements

7.3 Justice: Creating a just society, based on the right of all to a dignified, secure existence

Creative Commons License

Creative Commons License: Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0) applies to all work posted on this website except that which appears with authors whose last name is other than McFadden, in which case standard copyright should be assumed to apply.