American unions are in full retreat, as organized labor suffers another defeat in Tennessee. [Obama weighs in on contentious union vote at Volkswagen plant, by Richard Cowan and Bernie Woodall, Reuters, February 14, 2014] And while organized labor has not been a reliable friend of the American worker, blue collar Americans facing offshoring, automation, and mass immigration need at least some kind of a defense. God knows neither the Democrats (I say with regret) nor the Republicans are up for the job.
Accordingly, just as the plight of the American worker amidst our continuing immigration disaster have led some conservative immigration patriots to consider the heresy of increasing the minimum wage, so I suggest they should look at the alternative system of corporate governance found in the German powerhouse that is driving the European economy.
German companies use a practice called “codetermination” which creates shared management of companies by both workers and capital. Workers elect representatives who serve on the board of directors of their company. There’s a useful Wikipedia discussion here.
While we can imagine the U.S. Chamber of Commerce screeching about the “violation of private property” when it comes to “their” workers, German law has a different view. The German model is that workers committees bind workers to the fate of their companies, actually giving them an input into how they were managed, undermined the more extreme anti-capitalist radical socialists.
More importantly, the German system views workers and managers as citizens, stakeholders in the building of a common society and a common nation.
As the saying goes, “where you stand is determined by where you sit.” Making workers partial managers in the company changes the incentives of the corporation. From the Wikipedia entry:
Codetermination aims principally to give worker a voice in the company decisions. This means matters of organization of the business, the conditions of work and the management of personal and economic decisions affecting the future of the company and jobs. [Emphasis added] Workers therefore choose Works council representatives and members of the board to represent them.”
Needless to say, we can imagine the objections from American CEOs, screaming about how they have right to do whatever they want with “their” companies. In fact, of course, most CEO’s only own a tiny fraction of the company, if that. Large companies are already problematic in terms of ownership because they are usually the “property” of stockholders who have no stake in the actual long term survival of the company. In contrast, there is a serious argument among economist in Germany that codetermination actually improves productivity.
This kind of system is critical for the National Question—whether the U.S. will survive as a nation-state, the political expression of a particular people. It changes the incentive system for business, making local workers and German citizens a precious asset, not just another piece of inter-changeable machinery. This leads to the famous German method of spending a great deal of money to train citizens to do a job for the rest of their careers. This creates a worker who can see directly how his or her interest is related to the welfare of the company—and of the entire country.
Would codetermination work in America? If history has taught us anything, it’s that large changes can start with small steps. After all, it was only a few nobles who pushed the Magna Carta under King John’s nose at Runnymede. But the long-term result was the kind of democracy that defines the Western world today.
Similarly, the German system developed slowly. It began in 1848 when the Frankfurt Parliament initiated its first limits on corporate power by setting up work councils. Many modifications were developed in the decades that followed, only to be swept away when the Nazis broke the unions. However, after World War II, the work councils were reestablished and strengthened continuously until 1976 when a major law required all companies with 2000 employees or more to have codetermination of governance.
It may seem heretical to suggest such a system here. But the status quo cannot be tolerated by patriots. The continuing manipulation of our economy by global financiers who have no stake in the long term prosperity of workers, companies, and the country is hollowing out America from within.
The German model provides a viable alternative that could safeguard American workers and our long-term prosperity. It might best be called patriotic capitalism.
The next great American political movement will be built around whoever can create a plausible alternative to our dysfunctional, unpopular, and profoundly unequal economic system.
It might as well be us.
Prof Richard Wolff explains how German capitalism has been the most successful and most profitable in all of Europe
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