Some thoughts on the economy

Both Prof. Noam Chomsky and Prof. Richard Wolff of America are proponents of syndicalism, that is free self controlled workers cooperatives of the kind of the Mondragon Cooperative in Spain.

But the basic defect of such workers cooperatives is that they will only think of their own interest, rather than of the interest of the country as a whole, including the consumers.. Moreover, when a new capital intensive technology appears, they will be face...d with a serious dilemma. Accepting it may throw many workers, and therefore its own members, out of work. Not accepting it would mean that they may become uncompetitive, since other workers cooperatives doing the same kind of manufacture may accept it, and thus be able to reduce its cost of production by laying off some workers and thus saving labour costs. Also, it would impede the advance of technology..

The theory of workers cooperatives, in which the cooperative seeks profits for itself ( and therefore for its members ), suffers from the same defect which Adam Smith's theory of laissez faire suffers. It only replaces the individual industrialist by the cooperative. But the 'invisible hand' behind the cooperative would really mean that industries which are labour intensive gradually become more and more capital intensive ( with the advance of technology ) in search for more profits, by laying off many workers. However, in the process unemployment is generated, and therefore the market shrinks as less and less people have adequate purchasing power ( because the purchasing power of a worker laid off is drastically reduced ). How then will the goods manufactured be sold ?

A centralized system of production under a central government enables national planning, and thus a scientific and all round, coordinated progress on all fronts of the economy. Its aim is not just making profits, but raising the standard of living of the people.

The advocates of workers cooperatives are opponents of a centralized economy as they fear that a government running such an economy would become dictatorial and undemocratic. But that need not necessarily be so. If the government comes into the hands of genuinely patriotic, self sacrificing and modern minded people it would lead to rapid all round economic progress and giving a high standard of living to the citizens of such a country