The Economist’s Ryan Avent seems to be having a bit of a crisis of confidence this morning:
I’d like to set his mind at ease. It’s perfectly possible for the workers to seize the means of production and then sell their company’s output on an open market. Indeed, right here in the capitalist West we have a number of worker-owned firms. Lefties like to talk about Mondragon in Spain because it’s more ideological, but banal companies like Publix are owned by current and former workers and that’s perfectly compataible with there being a market for grocery stores.
We should probably do more of this. When it comes to the U.S. Postal Service, for example, I think conservatives are right to say that it should be privatized and the postal marketplace should be deregulated. But liberals are right that it would be bad to screw over USPS workers and retirees like this. So the natural thing to do would be to privatize it as a worker-owned firm. Then a management team appointed democratically by worker-owners could decide on the appropriate path forward.
I doubt this kind of thing will serve as a model of the economy at large, though. I think about what would happen if I woke up one fine morning to learn that the shareholders of the Graham Holdings Company (formerly known as the Washington Post Company) had generously decided to disavow their ownership in the means of production, leaving the shares in the hands of the staff of the various firms the company owns. I’d be very happy because shares of stock are worth money, and like most sensible people I’d rather have more money than less money. But what I’d want to do is sell the shares as soon as possible, because owning stock in the company you work for is a little crazy. Just in virtue of the fact that we work at GHC, all GHC employees are already subject to a fair amount of idiosyncratic GHC-risk. If we are lucky enough to get some extra money, the smart thing to do is to diversify our risk by owning stock in other companies.
Which is to say that rather than having workers seize the means of production, I think the more helpful mode of redistribution is higher taxes and more generous social insurance possibly including a sovereign wealth fund.