Introduction: For Coöperation

In response to an infamous provocation: “What is property?”, Pierre-Joseph Proudhon famously answered in 1840: “Property is theft!”¹

The paradox could hardly have been greater. The idea of theft, after all, presumes property. Proudhon’s detractors ridiculed his argument.

But Proudhon was onto something—something that remains crucial today: namely, that the government’s enforcement of its property rules can do extreme violence to our ideals of justice. It can rob us of our sense of self, of our own labor, of our very autonomy—and even, sometimes, of our lives.

Proudhon, the first self-proclaimed anarchist, militated for the abolition of property. Not just the equality of property or the fair distribution of property, he declared: “I demand, as a measure of general security, its entire abolition.”²

Proudhon proposed instead an economic regime based simply on possession. “Suppress property while maintaining possession, and by this simple modification of the principle, you will revolutionize the law, government, economy, and institutions,” Proudhon declared: “you will drive evil from the face of the earth.”³

By contrast to Proudhon, I would not draw the line merely at possession. Possession is just another type of property right. It is simply another variety of theft.

No, contra Proudhon, I would abolish a particular kind of property: today, in the United States, it is capital that must be eradicated.

One of the greatest sources of evil in society today is capital, understood as the investor’s alienable stake in an enterprise in which the only true interest is to maximize the return regardless of the wellbeing of others.

What must be abolished today, then, is not property, but the kind of property constituted by capital.

Shares of stock, the transferrable equity of a corporation, the alienable shareholder’s stake of corporate finance: that is a major source of evil in today’s extractive capitalist economy.

Capital elevates selfish profit over human welfare. It detaches the owner of capital from any real investment in the lives of all those who work for or are associated with the enterprise. It turns the possessor of capital into a mere speculator on other people’s lives.

The ordinary stockholder has one primary interest: to maximize the return on their capital investment, to draw larger dividends, to sell their stock at a higher value. Their interest is to extract more from the enterprise via their equity stake; to squeeze out more from everyone who is associated with the enterprise; to eke out more from the workers; to manipulate share price through stock buy-backs and other devices; to inflate future prospects—in effect, to make out like a bandit, to make out like a thief!

Definitions matter. By “capital,” I mean equity, shares of stock, in essence the alienable financial stake in a public corporation or enterprise. Capital is the transferable equity interest in an ongoing publicly traded enterprise.

This differs from other possible definitions of the term “capital.” Thomas Piketty, in his best-selling book, Capital in the Twenty-First Century, defines capital as any non-human asset. Capital represents, for Piketty, wealth.⁴ To Katharina Pistor, in The Code of Capital, capital represents only a limited set of assets that are legally privileged: assets become capital when lawyers bestow on them certain attributes of priority, durability, universality, and convertibility.⁵ Karl Marx, much before them, defined capital specifically as the money received from the sale of commodities that is then used as a mode of production to buy other commodities, equipment, or labor.⁶

None of that is what I have in mind—though those definitions may well have their place in empirical, legal, or economic analyses. For my purposes, capital is defined in its corporate finance meaning: capital is transferrable ownership shares of publicly traded companies.

Most people who own stocks today—whether directly or indirectly—hold them as a form of speculation to increase the overall return on their savings and to grow their wealth—if possible, to grow their wealth more than others, and more than the market, since that is the only way effectively to get richer, and richer than others.

But this is nothing more than gambling on other people’s livelihoods—more often than not, today, on other people’s misery. It is nothing more than an effort to extract wealth from an enterprise, from its consumers or workers, from all the people whose livelihoods depend on the business.

This kind of property—capital—has turned into a plague that has transformed ours into an extractive and punitive society. One marked by unconscionable (and growing) wealth inequality; by hyper-militarized policing used to enforce gross property inequalities; by a caste system that subjugates persons of color, building on the harrowing legacy of slavery and Jim Crow, of the genocide of Native peoples, of the age-long exploitation of Hispanic, Asian, and other migrants to this country.

This kind of property, capital, must now be abolished.

Whenever progress toward justice has occurred in history—however precariously—it has been achieved through limitations on kinds of property.

The abolition of slavery put an end to one kind of property: human chattel property.

The emancipation of women put an end to another kind of property: human marital property or coverture, a husband’s property in his wife.

The decline of feudalism, much earlier, put an end to serfdom: property relations that tied humans to land.

It is now time to abolish the kind of property, capital, that effectively ties human livelihood to equity.

Like those other kinds of property that were abolished, capital also bears a reprehensible relationship to human life, insofar as it is a form of speculation on the lives of others that ties their fates to share value.

It is only by decapitating this property that we can end the scourge of extractive capitalism and put in place a new political economic regime of coöperationism.

This ambition must be understood as continuing W.E.B. Du Bois’s project—and the promise—of Abolition Democracy.⁷

The only way forward today is through a genuine legal, political, and economic revolution that replaces the logic of capital extraction with coöperative, mutualist, and non-profit enterprises.

The legal structure that grounds the corporation must be replaced with a new framework that equitably circulates the wealth generated from production and consumption.

The many of us who create, invent, produce, work, and serve others need to displace the few who extract and hoard capital, and put in place a new coöperationism that favors the equitable and sustainable distribution of economic growth and wealth creation.

These alternative legal forms have existed for centuries and surround us today. They include worker coöperatives for producing and manufacturing, credit unions for banking, housing coöperatives for living, mutuals for insuring, producer, retailer, and consumer coöperatives for commercial exchange, and non-profit organizations for good works and learning.

Coöperationism is also the only way to address head-on the global climate crisis. The goal of coöperation is not to maximize the extraction of capital, but to support and maintain all of the participants in the enterprise and to distribute wellbeing, which depends on an ecologically healthy environment. The logic, principles, and values of coöperationist arrangements can serve to slow down our consumption-at-all-cost society.

A future based on coöperationism is no mere fantasy. Coöperationist enterprises surround us today and thrive. In many respects, they already outperform and outlast conventional publicly traded firms. They also often show themselves to be more resilient during economic downturns.

Existing coöperationist enterprises permeate the economy: Land O’Lakes,⁸ Sunkist,⁹ and Ocean Spray are producer coöperatives.¹⁰ State Farm and Liberty Mutual are mutual insurance companies.¹¹ R.E.I. is a consumer coöperative, and Ace Hardware a retailer coöperative.¹² Isthmus Engineering and Manufacturing in Madison,¹³ Cooperative Home Care in the Bronx,¹⁴ and AK Press in California are worker coöperatives.¹⁵ The Navy Federal Credit Union,¹⁶ with over $125 billion in assets and 8 million members, is a member credit union. And non-profit educational, cultural, and social institutions surround us.

Existing coöperationist enterprises can be as large as multinationals. The Mondragon coöperative consortium headquartered in Spain—a diversified enterprise manufacturing heavy equipment—employs over 70,000 workers and brings in annual revenues in the billions of euros.¹⁷

Existing coöperationist enterprises can dominate the competition and be technological leaders in their field. Swann-Morton, a worker coöperative in Sheffield, England, is a world leader in manufacturing and selling surgical blades and scalpels, and exports to over 100 countries around the globe. Founded in 1932 on the principle that “claims of individuals producing in an industry come first,” Swann-Morton has estimated annual revenues today in the range of $50 million.¹⁸

There are today myriad coöperationist enterprises run by and for members, workers, producers, or consumers, that fuel our economy and defy the extractive logics of capital.

Take but one example: the Mondragon coöperative consortium, headquartered in Catalonia, Spain, which manufactures automotive components, construction and industrial equipment, household equipment, and machine tools.¹⁹

Mondragon is composed of over 100 independent worker coöperatives, which, including subsidiaries, employ over 70,000 workers in about 65 countries.²⁰ The consortium also includes a banking enterprise.

The individual member coöperatives are fully worker owned. In each, the pay disparity between employees is capped, with highest-paid directors earning a maximum of four-and-a-half times the salary of the lowest-paid worker.²¹

The distribution of profits is decided by a general assembly at each member coöperative: at least 10% goes to a social fund, at least 20% goes to the reserve fund, and a maximum of 70% is deposited directly to the members’ individual accounts.²² The member coöperatives utilize the principle of “one worker one vote regardless of the share of capital owned.”²³

The consortium recently brought in revenues of 6 billion euros.²⁴

The modalities for coöperationist enterprises are simple and, by now, well understood and worked out—whether they involve credit unions, insurance mutuals, non-profit organizations, or worker, producer, consumer, and retailer coöperatives.

For member-owned coöperatives, the capital in the business is replaced by the aggregated membership stake in the ongoing enterprise.

In a consumer coöperative, like R.E.I., all of the users (the consumers of the enterprise) are invited to become coöperative members for a small fee, in the case of R.E.I. only $20. Those membership fees accumulate, in the aggregate, to form the members’ stake that effectively replaces equity capital. With 7 million eligible voting members at R.E.I. as of December 31, 2019,²⁵ the members’ equity stood at $312 million. Including retained earnings, the total members’ equity surpassed $1 billion.

In a worker coöperative, each worker-member is required over time to contribute the equivalent of a portion of their salary, which becomes their stake in the enterprise. At Mondragon, for example, each worker at a member coöperative must contribute one year’s salary, which can also be borrowed at low interest from their credit union, Caja Laboral. A member then opens an individual account at the credit union that is credited with yearly profits (or losses) at their coöperative; the account accrues interest similarly to a savings account.²⁶ The worker-member contributions, aggregated, serve as the equity of the coöperative that can be invested in equipment, machinery, research and design.

By 2020, practically all the kinks of coöperationist enterprises have been worked out. We know how to make coöperation possible. We know how to make it work.

Defenders of capital will respond that equity investments funnel resources to the most productive and efficient economic producers, thus ensuring enhanced economic growth and prosperity for all. If wealth is properly directed to the more performing enterprises, they argue, it will create more jobs and will spread out the benefits of economic production. The rising tide will lift all boats: the increased return on capital will be spent as consumption, fueling the economy, creating jobs, and spreading the wealth.

But these arguments are purely ideological. They have no empirical basis. If anything, they are belied by social reality. The condition of the average American worker, the shrinking middle class, the growing impoverished majority in the United States—these utterly betray the ideological claims of capital.

The best empirical evidence shows mounting levels of inequality within the post-industrial, Western, capitalist societies and growing indebtedness within the major economies—to the point where many of the supposedly wealthiest countries have effectively hocked their common.²⁷

The idea that capital investment is magically lifting all boats is fantasy. The reality of the COVID-19 economic crash and its stark inequalities based on race, class, and poverty, show the lie of the claims of capital.

What of the $38 billion in corporate equity in the United States?²⁸ Where would all that money go? After all, capital represents money that individuals ultimately own and place in the markets—either directly through brokerage accounts, holdings of mutual funds, or retirement accounts, or indirectly through pensions or savings accounts that are then invested in the market (or loaned out for investment purposes) by banks. What would happen to it all?

Well, first, a substantial portion of it would be converted into membership contributions that would be placed in the coöperative enterprises and accrue wealth for the consumers, workers, or other coöperative members.

Another substantial portion, second, could be lent to coöperative and mutualist enterprises as ordinary debt (bond obligations) to support expansion of the enterprises (whether to buy equipment and facilities for manufacturing, or goods and commodities for consumption, etc.).

As for the rest, this may be surprising, but it is basically borrowed wealth that does not amount to that much. Well over two thirds of it in the United States, in effect, is canceled out by national debt.

At the end of June 2020, the national debt in the U.S. exceeded $26 trillion and was mounting at a stunning clip, up more than $3 trillion in the first six months of 2020. In total, that’s about $212,000 in debt per American taxpayer, or $80,000 per citizen.²⁹

Our capital prosperity in this country is a figment of our national debt. If we think about capital accumulation holistically, the equity in private hands in the United States is offset by the collective debt we owe as a nation.

In effect, our prosperity, concentrated in the hands of the few, is nothing more than borrowed wealth.

How then could we eliminate capital?

Well, it is as easy as rewriting the laws of incorporation or revising the tax code. With a stroke of the pen, we could prohibit capital and mandate instead coöperationist corporate charters; or we could effectively disfavor capital to the benefit of coöperationist arrangements by, for example, taxing capital returns at a steeper capital gains rate.

Mechanically, the process of abolishing capital is simply a matter of repealing and replacing the law of corporations. Politically, it might be more complicated. It might even require a revolution. So be it.

We abolished human chattel property. We can abolish equity capital.

The Black Death—the plague epidemics of fourteenth century Europe—contributed to the demise of serfdom relations as a kind of property.

The Reconstruction Amendments brought about the end of another kind of property—human slavery.

Today, the COVID-19 pandemic has revealed the unsustainability of our extractive punitive society.

This is a day of reckoning. It is time to bring about the demise of another kind of property. It may not solve all the problems of injustice, but it will be one gigantic step in the right direction.

It is time to replace capital with coöperation. It is time to displace our extractive capitalism with a legal, political, and economic framework that favors coöperation and collaboration between those who create, invent, produce, make, work, labor, and serve others.

In the end, rather than corporations that extract capital for the few shareholders and managers, we need mutuals, coöperatives, unions, and non-profits that distribute the wealth they create widely to everyone in the shared enterprise—and continually guard against the gross disparities and inequalities, especially along racial lines, that now characterize our economy.