The General Motors strike
has come along to remind us that capitalism contains an internal contradiction:
Two opposing forces confront each other in one company. On the one hand, you
have the management, representing the shareholders, trying to keep labor costs
as low as possible. On the other hand, you have the union, representing the
workers, pushing in the opposite direction. And when the parties reach an
impasse, you get a strike, like we have now.
GM stands to lose $100
million per day in the process ,
while workers will receive substantially reduced pay.  It’s not a
pleasant time for anyone.
One historical solution
to this problem is to bring in government arbitration in lieu of a strike. But
that requires a neutral government, and the state of American democracy is such
that we are unlikely to achieve that anytime soon.
We have to find a way to
get everyone pushing in the same direction. And there are two answers for that:
socialism, and distributism.
Socialism has become a
category so broad as to be almost meaningless. In the interests of combating
ambiguity, I’m going to use the Webster definition, which is: (1) any of
various economic and political theories advocating collective or governmental ownership
and administration of the means of production and distribution of goods; (2) a
system of society or group living in which there is no private property; (3) a
system or condition of society in which the means of production are owned and
controlled by the state, or (4) a stage of society in Marxist theory
transitional between capitalism and communism and distinguished by unequal
distribution of goods and pay according to work done. 
What socialism, thus
defined, promises is a society where everyone is basically an employee. Noting
in passing that there is reason to be apprehensive about a system where your
employer and the police are the same entity, the difficulties that can arise
under such a system are manifest. First, it essentially abolishes the market,
making the production and distribution of goods a matter of central planning.
But we simply haven’t developed the arithmetic to make conscious decisions
about such things economy wide.
Confidence in central
planning derives from the fallacy that the fact we can see solutions to problems
on an individual basis means that we can conceive of solutions to everything on
the same basis; a sort of fallacy of composition. We simply aren’t smart enough
to plan an entire economy. But socialism demands that some people be exactly
doesn’t really do away with the internal contradictions of capitalism. There
will still be policy makers, a managerial class that will look to benefit itself;
and everyone else, who will be seeking to maximize their own positions. And the
managerial class will be able to impose its will by fiat.
It will be said that this
problem can be anticipated by electing the managers by popular vote, but that
could be a drain on resources on this finite planet. There will be no one who
has interests directed toward the productive process as a whole; there will be
a perceived disconnect between individual prosperity and that of the entire
Say what you will about
capitalism, it does unite the interests of business owners and their
businesses. That drives business owners to willingly undergo a degree of
privation in the interests of their enterprises. But this feature would be completely
absent from a full socialist system. In a socialism where democracy prevailed,
the result would be several interests pulling in different directions; which
may be why socialism has usually resorted to the authoritarian model.
Thus recognizing the social
and economic benefit of the united interests of business owners and their
businesses, it should be considered how that unity of interests might be more
widespread, even universal. This brings us to the second solution for unifying
the interests of the population: distributism.
hasn’t resulted in a unified approach. But it has one characteristic feature,
which is spreading ownership of the means of production as widely as possible.
Worker cooperatives are one distributist model, but they have not become as common
as one might wish. A challenge they face is capitalization. Wealth not being
equally distributed in places like the United States, we do not find many who
would participate in a cooperative enterprise with the economic resources to
begin such a venture. Moreover, there are many who prefer not to be laden with business
An absurdity that hides
in plain sight in our economic system is that labor is paid for in money, but
that capital can only be purchased with money and not labor. And this is true
even though business revenue is largely derived from labor. Revenue will be
used, in part, to make further capital investments in a business, which will
increase the value of ownership shares. But labor sees none of that increase in
value, even though it largely contributed to it.
This situation creates a
conflict in the interests between capital and labor. Labor, not sharing in the
increase in value it contributes to a business enterprise, ends up with only an
indirect interest in that increase in value. But if we are to unify the
interests of capital and labor, if we are to get everyone pushing in the same
direction, a way must be found for labor to receive its share of the value it
contributes the company. The only ways that can be done is to distribute
proportional ownership shares to the employees or distribute the value by means
of cash payments.
Until that is done, we
will continue to be beset with conflicts between labor and management, or, with
the ascendancy of right-wing nihilism we have witnessed of late, labor action
will encounter brutal suppression.