How Communists and Catholics Built a Commonwealth

According to the International Cooperative Alliance, the international association established in 1895 to promote the co-op model, “cooperatives are businesses owned and run by and for their members.”

Boulder, Colo., is a town full of characters, and Richard Warner was one of them. Dr. Warner—a psychiatrist, anthropologist and transplanted Englishman, with ruddy cheeks and wavy hair—held a particularly zealous conviction that any patient with mental illness could recover and, further, that the best medicine is living as normal a life as possible. He could not tolerate any clinical ambition he perceived to be short of that. He wanted to care for people in a way that did not seem to add up, business-wise—at least until he borrowed an idea from Italy.

Dr. Warner died in 2015. His chief legacy is a company, Colorado Recovery, that provides services in the Boulder community to adults with serious mental illness. It is housed mainly in an office on a residential street, its Ionic columns and white fences tucked behind a pair of trees along the sidewalk. Some of the 150-or-so clients it serves in a given year live in a group home a short walk away. Other companies have wanted to buy Colorado Recovery over the years; some still call and make offers. But by the time of his death, Dr. Warner transferred ownership and control of Colorado Recovery to its employees, along with some families of its clients, who hold non-voting investor shares. The clients have a budget to design their own services. Dr. Warner knew that no buyer—whether an aggressive holding company or a well-intentioned nonprofit—would run it the way he had, so he turned it into a cooperative.

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“It’s a very unusual for-profit model,” says Ruth Arnold, Colorado Recovery’s chief executive officer. “It’s not really profit-driven. We’re charging as much as we need to survive.”

Dr. Warner’s widow, Lucy Warner, summarizes the model this way: “It’s sort of where radical and duh come together.”

Colorado Recovery’s structure is an anomaly in the U.S. health care industry, but it was an outgrowth of something larger and older. Since the 1970s, Dr. Warner had been watching a kind of business model that was spreading across Europe, beginning in a part of Italy better known for its antiquities than its innovations, a place where this kind of shared ownership had become a common practice. Warner was trying to build more than a company in Colorado. He was after a commonwealth.

Ipercoop Supermarket, Italy

Shared Responsibility

The Social Cooperative of Young Binders appears to be an ordinary print shop, housed in an office park in Imola, a town halfway between Bologna and Ravenna. Founded in 1983, it now does about $1.7 million in business a year, with services ranging from making copies to housing and cataloguing the archives of local manufacturing companies. Increasingly the company is getting into waste management as demand for printing on paper declines. More than two dozen workers depend on Young Binders for their livelihood; about half have disabilities that would make it nearly impossible to find work elsewhere. Many of those workers are also co-owners of the company. If you were to visit and ask who the disabled workers were, you would be shown the door.

In 1991 Italy passed a law to enable a corporate container for a kind of business that had been happening already for decades: cooperatives specifically designed to provide social services.

These “social cooperatives,” according to the law, could come in two forms. The first consists of co-ops that provide public services, usually as a contractor for government welfare programs—like in-home care for seniors or childcare. These replaced profiteering private ownership and top-down state control by sharing control over these services between providers and recipients. The second form includes enterprises that employ and train people with a range of “disadvantages”—people like those with physical or mental disabilities, for example, or the incarcerated. These can look like Young Binders, or a trattoria in the Trastevere neighborhood of Rome run by the lay Catholic community of Sant’Egidio, or a monastery-turned-guesthouse along a canal in Venice. When the painter Mark Bradford created his installation for the U.S. pavilion at this year’s Venice Biennale art exhibition, he carried out what artists lately call “social practice” with a social cooperative through which local inmates grow produce and make crafts.

Both types of social co-ops need to be solvent businesses. They are not charities. But rather than maximizing profit, their purpose is to harmonize the interests of the stakeholders they serve. They can include in their ownership structures a blend of workers, patients, volunteers, investors and donors. The model has proliferated exponentially. Social co-ops have a dedicated statute in Italy, but they are not an isolated experiment. This is a country where the two largest grocery-store chains are cooperatives—one owned by its consumers, the other by local retailers. Co-ops also own Unipol, one of the largest insurers, whose modern skyscraper towers over Bologna’s terracotta rooftops. In northern territories like Tuscany, Trentino and above all Emilia-Romagna, with Bologna as its capital, cooperatives organize the shape and tempo of the whole economy.

In part because of its culture of cooperatives, Emilia-Romagna has the highest median family income in Italy.

Co-ops there carry out activities as varied as construction, garbage collection and production of a best-selling brand of boxed wine. You can visit a showroom of sophisticated dental chairs at a worker-owned factory or buy bonds from a dairy co-op backed by wheels of its Parmesan cheese. Cooperative networks enable small- and medium-sized enterprises to remain dominant in a region that exports world-renowned food and automobiles. In part because of its culture of cooperatives, Emilia-Romagna has the highest median family income in Italy, with the lowest unemployment rate and the highest participation of women in the workforce. The early industrial radicals’ dream of a fully democratic economy, a “cooperative commonwealth,” is unusually alive and well there. And this came about because of two otherwise opposing factions: the Communists and the Catholics.

Northern Italy: Land of Co-ops

Most visitors encounter Emilia-Romagna as a place of narrow medieval streets, Baroque churches and Bolognese sauce. The trains run more or less on time, and the hospitals treat foreigners without fuss. One tends not to notice the politics at work behind it all. But the politics are interesting. It’s a region that has been, since the late 19th century, a leftist stronghold.

Communists and socialists dominated the first national cooperative association, Legacoop, founded in 1886 in Milan, only 15 years after the unification of the nation of Italy itself. Catholics, searching for their own responses to the era’s conflict between capital and labor, formed another association, Confcooperative, in 1919. Confcooperative later led the development of the social co-op model, while Legacoop feared that social co-ops would be a vehicle for privatizing state-run services. Today, however, the two organizations have come to regard their ideological differences as negligible. They have initiated a merger.

“The Berlin Wall doesn’t exist anymore, but we in Italy realized it only recently,” remarks Gianluca Laurini, a Legacoop official in Bologna. “Ideology aside, a co-op is a co-op.”

At a time when the Catholic Church preferred monarchies over democracies, and when Communists were vying for their own absolutist schemes, in northern Italy both opted to back bottom-up businesses. There was no single blueprint. Some co-ops were banks owned by their depositors, some were stores owned by their customers, some were workshops owned by their workers. Communists did it for the liberation of the working class (especially through worker and consumer co-ops), and Catholics did it to affirm the dignity of all people (especially through credit unions and social services), but together they pushed a cooperative commonwealth further into everyday life.

The 1991 social co-op law is just one among several policy devices that Italian co-ops have designed for themselves. The national constitution itself has a provision, Article 45, that enshrines free, cooperative enterprise as a right—much-needed in the wake of Benito Mussolini, who regarded co-ops, rightly, as a threat to his Fascist regime. He dissolved both Legacoop and Confcooperative, and tried to replace them with a federation of his own, but after his demise they promptly reorganized and gained the political might to write their own rules. Cooperators from around the world now come to Italy to study these legal arrangements.

A law passed in the early 1970s, for instance, allows co-ops to hold tax-free “indivisible reserves,” making it easier to raise capital from members. During the following decade, co-ops gained the ability to own and manage noncooperative subsidiary firms. A 1992 law required co-ops to contribute 3 percent of their surpluses—profits, in capitalist-speak—to their associations, for the sake of financing new co-ops and the growth of existing ones. The result has been an ever-more self-perpetuating system, a network of companies that aid each other’s flourishing. While Colorado Recovery has had to struggle for survival mostly on its own, Italy’s co-ops have one another.

The eminent scholarly exponents of the Italian co-op sector are Vera and Stefano Zamagni—a historian and an economist, wife and husband. Vera once served as the equivalent of lieutenant governor of Emilia-Romagna; Stefano was an architect of Pope Benedict XVI’s economic doctrines, which more quietly prefigured Pope Francis’ concerns for the environment and critiques of capitalism. Both teach at the University of Bologna, Europe’s oldest university, founded in 1088 as a kind of cooperative among students who hired professors to teach them. When the Zamagnis talk about the origins of what modern Italian cooperation has accomplished, they start not with the 1948 constitution nor with the earliest Italian co-ops a century before that. They start with the Middle Ages.

Since then, says Vera Zamagni, “Italy has tried to substitute economies of scale with economies of network.” The northern Italian districts where cooperation now flourishes tended to be, in an age of emperors and princes, republican city-states. From these came some basic features of the modern market economy—double-entry accounting, insurance, municipal regulation, professional guilds. The Zamagnis distinguish this “civil economy” from the capitalism that would emerge elsewhere in Europe to fund colonial expansion and exploitation.

The system of interlinked, human-scaled co-ops in northern Italy is a remnant of habits that date back to the vibrant, participatory city-state republics that governed the region in the Middle Ages. The comparative lack of co-ops in the southern part of the country, in turn, seems to reflect the monarchic rule that long prevailed there. When the political scientist Robert Putnam studied variations among Italian regional governments starting in the 1970s, he also noticed this correlation. “Mirroring almost precisely that area where the communal republics had longest endured five centuries earlier,” he wrote, “the medieval traditions of collaboration persisted, even among poor peasants.”

Touring an Italian cooperative
Touring an Italian cooperative.

According to the International Co-operative Alliance, the international association established in 1895 to promote the co-op model, “cooperatives are businesses owned and run by and for their members.” This is part of the basic definition, recognized around the world, including in Italy. But in Italy one hears executives and boards also insist that their co-ops are not for their members—they are for future generations. They are for the community. One hears this from both the big-time manufacturing bosses and young back-to-the-land farmers. The members are stewards, like a family with an apartment in what was once a regal palazzo, like the people who sweep the tourists’ trash at a Roman ruin. This sense of history has helped make Italy’s co-ops among the world’s strongest, but history also tolerates their contradictions, their tendencies to drift into oligarchic control or capitalist conformity.

“I rebuke them every day,” Stefano Zamagni says. “When a cooperative loses its mission, it has no reason to exist.” But he is patient. With time, even partial manifestations of the cooperative commonwealth help the ideals spread.

The canon of international guidelines and principles for co-ops can be deceptive; it seems to claim that there is a formula. Shared principles really just string together the cooperative habits that diverse peoples have carried with them and that they bring to the common challenges of 21st-century survival. Economy is a form of culture. This is why a Kenyan woman I know who works at the Vancity credit union in Canada could start a lending circle with fellow Kenyans, while the idea baffles her native-born Canadian friends—even those at the credit union where she works. They did not grow up watching their mothers go to lending-circle meetings, as the Kenyans did.

Contradictions

If members from small, radical and allegedly pure grocery co-ops in the United States were to go on a field trip to visit an Ipercoop in Italy, they would find a dilemma. Ipercoop is the largest kind of store in the Coop Italia system, a national chain resulting from decades of mergers among local consumer cooperatives throughout the country. It is not pure. Picture, on one end of a sprawling strip mall, a gigantic superstore with globalization’s full variety of cheap, imported household goods beneath overhead banks of fluorescent suns. Employees, many of them part-time, are not especially well-paid or empowered in their workplace. Only 20,000 of nearly nine million consumer-members take part in meetings. But the in-house brands avoid controversial ingredients like G.M.O.s and palm oil, and suppliers—many of which are themselves Italian co-ops—must conform to certain codes of ethics in their labor practices. Things could be worse. But this is unapologetic consumerism, for a competitive price.

Would the visiting cooperators want this for their co-ops? Most probably would not. If it’s our company, we’d like it to be pure. But purity means accepting the fact that in addition to shopping at our co-op we are probably also stopping by Target or Walmart for bulk necessities, or condescending toward our neighbors who do so. Ipercoop stands for the impure claim that if people are going to do gross consumerism anyway, they can at least not funnel the profits to investor-owners somewhere else; its consumer-owners can add the leftovers to their savings. They can manage their own compromises.

Fluorescent superstores are only the start of the contradictions in Italy’s cooperative commonwealth. At the headquarters of Sacmi, an international manufacturing conglomerate near Bologna, one finds a prosperous machinery factory behind a pristine office building with its own museum. Sacmi is a worker co-op in which only about a third of the more than 1,000 eligible Italian workers are actually members. Among the company’s dozens of international subsidiaries, the Italian worker-owners do not bother promulgating cooperative values or possibilities in any way. And this is one of the real co-ops—a dues-paying, upstanding Legacoop member. There are also tens of thousands of “false” co-ops in the country, firms that permit no oversight from the big associations and whose sole purpose is often to enable erstwhile employers to bypass workers’ collective-bargaining rights. Even the storied social co-ops can play this kind of role. As critics feared, their rise has coincided with a long process of privatizing public services, enabling local governments to deliver services without paying government-level wages.

“Cooperatives have transformed into institutional loopholes,” contends Lisa Dorigatti, a researcher at the University of Milan who has studied co-op labor markets. Even Pope Francis has noticed the problem. “Counter the false cooperatives,” he told a 2015 Confcooperative meeting, “because cooperatives must promote an economy of honesty.”

Today, the pioneering types of people who built Italy’s cooperative movement a century ago are not necessarily flooding into co-ops. They are not attending Coop Italia’s annual meetings or holding out hope of becoming a Sacmi member. If they are organizing co-ops, they are often treating the required board structures as a legal formality and governing themselves more like an open-source software project—whether they are writing code or growing vegetables. They are forgoing co-op language altogether, speaking instead about “political consumerism” and “solidarity purchasing.” Yet according to University of Bergamo sociologist Francesca Forno, “I think we are going back to the roots of cooperativism.” They want something more cooperative than an Ipercoop superstore.

Insiders and outsiders alike frequently mistake cooperative enterprise for a utopian project. But it never has been that, or it never remains one for long. Constructing a commonwealth is not an instant cure. It is recovery.

We in the United States would do well to learn Italy’s lessons.

Co-ops in the United States

We in the United States would do well to learn Italy’s lessons. The list is growing of cities that have recently drafted policies to promote worker-owned cooperatives. New York has put several million dollars into worker co-op development; Madison, Wis., has passed its own co-op ordinance, and so have Austin, Tex., and Oakland, Calif. Cleveland, Ohio, has its struggling, but widely promoted, Evergreen Cooperatives, with businesses like solar retrofitting and an urban greenhouse; other cities have dispatched field trips of policymakers to visit them. The country now has a few shining examples of functioning worker co-ops, which beckon hope for more. Advocates are hoping to find candidates among the millions of Baby Boomer-owned businesses now poised to close with no succession plan. This past May, Bernie Sanders led a group of Democratic senators and representatives to propose ambitious federal legislation on behalf of worker ownership, part of the party’s newfound appetite for progressive economic proposals.

I watch the news of these co-op developments closely. But when I first heard from Felipe Witchger, the young executive director of the Community Purchasing Alliance, I had never heard of him or his organization. And when I attended the group’s last annual meeting in a Washington, D.C., school’s multipurpose room, I realized what a lapse this was. (I delivered the keynote address at that meeting and was compensated for doing so.)

Seated around me were representatives of the 160 D.C.-area organizations—mainly churches and charter schools—that used C.P.A. for purchasing such unglamorous necessities as electricity, security, sanitation and landscaping. After three years in existence, the co-op had saved them nearly $3 million. (A woman seated next to me, a part-time church staffer, said she had cut out $17,000 on copier contracts alone.) Many of them were switching to renewable energy, and their purchase of 580 solar panels had already brought down the price of solar for everyone in the region. In the back of the room were staff members from a black-owned security company whose size more than doubled because of C.P.A. contracts. Witchger was talking with some of the group’s contractors about converting their businesses to worker ownership. But worker ownership was only part of the commonwealth he and C.P.A. members were building.

A new generation has rediscovered cooperative enterprise in the United States since the 2008 financial crisis. Perhaps it is a kind of Marxist hangover that inclines us to believe economic change must always begin with labor. Take the popular left-wing economist Richard Wolff, who has become a leading co-op promoter through his writings, radio sermons and an advocacy organization called Democracy at Work. The locus of production is so important to him that he would reserve certain governance rights solely to “producer” workers, who physically make a given widget, over the “enablers,” who answer phones, sweep floors and craft contracts and the like. This kind of laborist fixation does not do much to serve a post-industrial economy of increasingly automated production, permanent part-time, and peer-to-peer services over online platforms. It also inclines us to neglect how pockets of commonwealth might emerge from zones of economic life other than factory floors—from schools, from churches, from taking out the trash.

In U.S. history, worker co-ops have represented a miniscule proportion of the cooperative sector. (More than two million workers are part of employee stock ownership plans, but these offer little-to-no worker control.) Far more of the sector has consisted of formations like credit unions, consumer-owned electricity co-ops and business-to-business purchasing co-ops like C.P.A.—or Ace Hardware or Best Western. Part of what helped C.P.A. become so successful so quickly was that it built on this legacy, taking help from co-op veterans and existing co-op financial institutions. Even if one’s goal is to build a new generation of worker co-ops, perhaps the best way to start is with other, more familiar kinds—kinds that come with history and muscle-memory and maybe even a replicable track record for financing.

The largest worker co-op back in Boulder, just up Broadway from Colorado Recovery, is Namasté Solar, a solar-panel installation company with more than 100 member-owners. It’s a certified B Corp with an award-winning workplace culture and six weeks of vacation for employees every year. Since converting from a partnership to a co-op in 2011, it has been a thriving business, and it has no trouble finding investors willing to finance growth without demanding control. But its real, systemic effect has happened outside the worker-ownership structure. Also in 2011, Namasté first spawned a spin-off, Amicus Solar, a purchasing cooperative that helps small solar companies across North America stay competitive against large corporations. That, in turn, spun off a co-op that pools maintenance services. Now, the Namasté team is helping to create the Clean Energy Federal Credit Union, which specializes in loans for homeowners nationally who want to adopt renewables. One thing led to another.

When we know the diversity and dexterity of past models, they can help find creative new combinations for the present. The trouble is, the ideal and the unfamiliar tempt us more than the unfinished commonwealths of the past, whose salvation remains incomplete in ways we know too well. People long for new worker co-ops but forget to vote for their old credit union’s board. Unlike capitalism’s penchant for perpetual disruption, cooperation works best when it can work with what is already at hand.

Cooperators today neglect the local, unnoticed, compromised co-op legacies at their peril—the big, rusty cooperative grain elevators across the rural United States, or the big, ugly aisles of an Italian Ipercoop. These are achievements that can give the commonwealth of the future a head start and can help it cross lines of political party and social class. Small, pioneering experiments help new generations make the commonwealth their own. But we also need to build on what we already have, where we already are, even if that includes fluorescent superstores. If there is any democracy left in them, can’t old co-ops be made new? Young cooperators can learn from this challenge. At the same time, the cooperative establishment needs to step up more to invest in and support new ventures, including risky ones. The future of their legacy depends on it.

If advocates for a commonwealth in the United States were to encourage not just worker co-ops but agricultural, utility, purchasing and credit co-ops as well, they would see their political base become drastically wider—not just Bernie Sanders, a longtime champion of worker ownership in Vermont, but Mike Pence also, whose base has included Indiana electric co-ops and credit unions. That kind of bridge-crossing can seem unpleasant in hyper-partisan times, but it is possible. If Italy’s Catholics and Communists could unite around the practical work of building a commonwealth, perhaps Democrats and Republicans can, too.

If Italy’s Catholics and Communists could unite around the practical work of building a commonwealth, perhaps Democrats and Republicans can, too.

Now, co-ops in Italy have to reach across an even wider gulf than simple political divisions. Social co-ops have taken a lead in employing and integrating new migrants from Africa and the Middle East, who have transformed the demographics of the country within a decade. As many as 100,000 migrants are now applying for asylum each year. The newcomers do not claim the same medieval inheritances that the native-born Catholics and Communists had in common. Migrants are creating co-ops of their own now in Italy, bringing their cultures and habits with them. People seeking an inclusive, responsive economy must continually relearn the lessons of commonwealths past—to work with what they have and seek out the fullness of what they might share with one another.

Comments are automatically closed two weeks after an article's initial publication. See our comments policy for more.
Andrew Berscheid
2 months 1 week ago

I don't suppose it might be worthwhile to mention the millions of Catholics killed under communist regimes in the 20th century?

Nathan Schneider
2 months 1 week ago

Not really, since these Italian communists and socialists didn't have anything to do with that—not any more than it is necessary to bring up the brutality of certain Catholic conquests in other times and places when discussing the Catholics here.

J Cosgrove
2 months 1 week ago

since these Italian communists and socialists didn't have anything to do with that

It is communism and socialism that leads to dysfunctional economic organizations which then result in oppressive activities to counter worker reaction to these dysfunctions. Communism and Socialism can never work because they defy the natural law or human nature. Thus, they will always lead to oppression. So anyone who espouses socialism or especially communism must accept responsibility for what has happened when communism is implemented even if they themselves have been unsuccessful in implementing it locally.

So yes anyone who espouses communism must acknowledge that they espouse a system that leads to the slaughter of millions, over 100 million in the 20th century.

any more than it is necessary to bring up the brutality of certain Catholic conquests in other times and places

This is really an apples and oranges comparison. In one we are talking about a philosophy which has led to over a hundred million dead in just one century compared to some incidents that don't flow from the Catholic religion. Communism and socialism will always lead to oppression. I do not believe Catholicism leads to oppression and massive killing. Though some rulers who have self identified as Catholic have fought unjust wars that killed many or oppressed their subjects. But it wasn't Catholicism that led to this.

You might be specific when making such a statement especially in terms of numbers killed. And please do not bring up the crusades.

J Cosgrove
2 months 1 week ago

The headline should be

How Communists and Catholics Built a Commonwealth through the principles of Free Market Capitalism

As far as free market capitalism is concerned, how an economic entity is organized internally or financed is irrelevant as long as there are no special privileges or external pressures favoring it. When this is so, the cooperative is part of the free market capitalism system.

Mr Schneider keeps bringing up cooperative as if they are something unique and a more effective way of organizing economic activities. They aren't but some have certainly worked in some cases and are to be applauded when they do. But they are certainly not a cure for worker discontent or else we would have seen much more of them by now. No one is preventing a cooperative from forming.

Every organization is based on cooperation. One of the most competitive organization in todays modern world is the professional sports team and its success is based on extreme cooperation. But as we all know, some of the members are more valuable than others and are compensated accordingly.

Michael Basile
2 months 1 week ago

My take from Schneider's review of cooperatives developments and models is that grand ideologies can be laid aside to allow for experimental blendings of economic and social forms of enterprise. Historically, there are many successful precedents for such not only in Europe, but also in south and east Asia: e.g., Mondragon societies on the Iberian Peninsula, Grameen Bank loans to cooperatives in India and beyond, and Sarvodaya communities in Sri Lanka. There are more. Schneider advises that such models of cooperation can be initiated, supported, and encouraged by government policy as democratic models inspired to combine social with economic collaboration that derives from local circumstance and the drive to localize ownership with work. The point of cooperative enterprise is not to thwart capitalism by supplanting it with covert communistic subversion, but to rather afford communities and their enterprising members with opportunity to act together for mutual support, benefit, and education. Doing so encourages initiative that can overcome the inertia that waits for government bailout or multinational corporate takeover.

Joseph J Dunn
2 months 1 week ago

Mr. Schneider’s article brings us squarely to the dilemma faced by Aquinas and every pope and commentator on economic justice. If the ultimate destination of property is the promotion of the common good, then there must be some method for allocating some portion of today’s property toward the promotion of the common good. The downfall of communist, collectivist, socialist societies lies in their focus on allocating the products of production among members, citizens, participants. The math is simple, the motivation pure, at least at first. There can even be economic growth, which can be achieved by simply increasing the population and raising production apace.

But that is not promoting—improving—the common good. For this, someone must allocate some of today’s product (wealth) to development of new products and services. That involves risk, and possible failure. Committees are inherently risk-adverse. Majorities are formed only with slow and patient care, especially in new ideas. The collectivist model fails here, if it has not already failed to allocate among present constituents with absolute fairness and equality of result.

For those content with the status quo, collectivism is fine. But for those who hope for tomorrow’s new medicine, or a more efficient energy system, better building materials, more drought-resistant grains, for better education tools—for some promotion of the common good—capitalism at least provides a method of saving and investing, and allocating for the risky experiments, for covering the cost of the inevitable failures and flops, for bringing new products and services to mankind.

J Cosgrove
2 months 1 week ago

Normally, I agree with most of what you say but the following is so far from the truth that I have to object

For those content with the status quo, collectivism is fine.

This assumes as Marx did that capitalism will reach a point where the technology and information is great enough that the society could coast on the current level of knowledge to live a happy life, While you rightly point out that there is always something better and the search for this will be shut down, what is not true is that the current level can be maintained.

It assumes that those who administer the state are disinterested and will selflessly govern in the interest of the many. This is so far from the case that the real fear is the power of government not because it will control our lives and remove our freedom. That it will do. But an more valid fear is that it will lead to massive disintegration of the society as market forces disappear and the selfishness of the bureaucracy favors themselves over the people. Witness Venezuela, once was the richest if not the richest country in South America.

There is an economic area called Public Choice Theory that covers this. E.g.
.

how politicians' and bureaucrats' self-interest, utility maximization, and other non-wealth-maximizing considerations affect their decision-making

One of the best ways of expressing this is in the ideas of Jerry Pournelle who just died last week. Jerry was known for his science fiction but was a prolific writer on many topics. He had a Ph.D in political science and formulated what is called "The Iron Law of Bureaucracy"

In any bureaucracy, the people devoted to the benefit of the bureaucracy itself always get in control and those dedicated to the goals the bureaucracy is supposed to accomplish have less and less influence, and sometimes are eliminated entirely

No where is this more visible than in current universities where administrative staff now out numbers faculty when at one time they represented about 10-15% of employees. The result is sky high tuitions and the indebtedness of graduates which then influence social and economic behavior, nearly always negatively.

Joseph J Dunn
2 months 1 week ago

I thought it unnecessary to state the historically obvious, that socialist-collectivist-communist economies sooner or later fail, at which point they morph into dictatorships or oligarchies where the strong make all the decisions, and the ranks of the dispossessed expand. I do maintain that for those content with the status quo, collectivism is fine. I say that because within the U.S., I believe our institutions are strong enough to sustain a capitalist economy, even with some collectives in our midst, because we have demonstrated the ability to come back from the brink. Western Europe, to a lesser extent, but surely Britain, have also rejected the false promises of collectivist economies, after more harsh experiences. Is it possible that collectivism might overcome capitalism here? I suppose so, but I take comfort that history says No. This is also a humanist philosophical position, I think consistent with Hayek, and many others, who find in the human spirit a thirst for progress, for personal responsibility and self-improvement, for innovation, for taking risk, for helping one's neighbor in constructive ways (avoiding a welfare mentality), and who recognize the obligations of stewardship (including investment) that come with holding private property. Thomas Merton lived in a collective monastery, but he appreciated the contributions of capitalism. Lincoln Steffens and other reformers were equally aware of capitalisms's strengths. As I read Nathan Schneider's piece here, I see no mention of innovation, other than some collective investments of small portions of income into other collectives, which tend to be doing things already mastered, not investing in the new, risky, and probably expensive technologies we will need to make progress in the areas I pointed to earlier, some of which you highlight, and a few of which Pope Francis has written about. Resources are always finite, and some method of allocation is therefore needed, and development always involves risk. So we'll need capitalism for a long time into the future. Peace.

J Cosgrove
2 months 1 week ago

My understanding of the term collectivism is a complete reorganization of society not just some independent small groups who organize freely. The family is a cooperative in a sense and so are sports teams. I am not sure the term collectivist would apply to them.

A collective as you describe it is just another form of an organization and will succeed or fail based on its merits. As I said above such an organization is completely in sync with free market capitalism and not new or unique and definitely in general not more effective. If all the farmers in a section of Iowa decided to form a cooperative, then nothing is to stop them if they own the land and have the financial resources. They will succeed or fail based on economics. We could certainly live with this type of organization in our midst. But that is not what is usually understood by the term "collectivism."

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