The Instigator
Capitalistslave
Pro (for)
The Contender
traolach
Con (against)

If people were properly educated, capitalism would disappear

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Voting Style: Open Point System: 7 Point
Started: 3/27/2017 Category: Economics
Updated: 1 year ago Status: Debating Period
Viewed: 578 times Debate No: 101419
Debate Rounds (4)
Comments (2)
Votes (0)

 

Capitalistslave

Pro

I couldn't fit the entire resolution in the title, but here it is:
"If people were properly educated and the government wasn't involved in the economy, capitalism would disappear."

I am arguing that this is true, my opponent will argue it is false. I'll take burden of proof solely.
Rules of debate:
1) No insults, ad hominem, or personal attacks. Be civil
2) The total number of rounds used for argument should be the total you see here minus one since I am not using round 1 for argument. This is to keep the total number of rounds used for argument even between us
3) The last round of argument should just be rebuttal to your opponent's arguments. There should be no new arguments in this round. New facts and information can be presented, but only in rebuttal to your opponent's arguments

Definitions of relevant terms:
Definitions are courtesy of wikipedia
Capitalism: "an economic system based on private ownership of the means of production and their operation for profit. Characteristics central to capitalism include private property, capital accumulation, wage labor, voluntary exchange, a price system, and competitive markets."
Private property: a legal designation for the ownership of property by non-governmental legal entities. Private property is distinguishable from public property, which is owned by a state entity; and from collective (or cooperative) property, which is owned by a group of non-governmental entities."
Cooperative: "an autonomous association of people united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled business." I would add that cooperatives are cooperative, as opposed to, private property.
Worker cooperative: "a cooperative that is owned and self-managed by its workers"


Now, for this debate, I need my opponent to agree that worker cooperatives are not capitalistic. I argue that they are not because they are cooperative property, and not private property which is a necessary part of capitalism, as defined above.


If my opponent has objection to any of the above definitions or rules, say so in the comments before accepting the debate so that I can change it if I agree to what you suggest should be the definition of terms or rules. I am also willing to change the total number of rounds to 5, or less than 4 if my opponent wants a different amount of rounds.
traolach

Con

In compliance with the above statement, this round will not be used for argument.
Debate Round No. 1
Capitalistslave

Pro

If people were properly educated about worker cooperatives, it would lead to a rise in the amount of them.
First, I'd like to point out that worker cooperatives are generally more successful than capitalist firms. 80% of worker coops survive the first 5 years of being in business, while only 41% of capitalist businesses do[1]. In other words, worker coops have a failure rate of 20%, while capitalist businesses have a failure rate of almost 60%, about three times the rate. Additionally, 78% of people who know about worker coops, prefer to shop at those than capitalist businesses[2] One must wonder, if these numbers are true, why aren't worker coops overtaking capitalist businesses? It's really quite simple. Very few worker coops are ever created, whereas many more capitalist businesses are. I believe one reason for this is because of this fact: 89% of people don't even know what a cooperative is[2] let alone a worker coop. If everyone knew what a cooperative was, there would likely be many more people who would shop at them, and they would boom so much that they would possibly overtake the capitalist economy we have.

If the government wasn't involved in our economy, more people would likely realize how bad capitalism is
Once more, capitalist businesses have a 59% failure rate within the first 5 years of being in business, and that likely goes up as you increase the amount of years. However, a major problem about our government, is that it is a strong supporter of capitalist businesses. It just doesn't want to allow big capitalist businesses to fail when they're supposed to, and they make stimulus packages and bail companies out when they fear that these capitalist businesses will do the intrinsic factor of capitalism, which is failure. If, however, these companies were allowed to fail and ruin the economy more, people would likely see the problem and instability of capitalism. They would likely want to try a different economic model, and start doing research themselves on them. They may come across worker cooperatives, and see that they fail at a much smaller rate than traditional businesses, provide higher wages to their workers, and provide more employment options than capitalist businesses.

Worker cooperatives provide more employment, higher wages, and are more productive, so why wouldn't people switch to them if they knew about them?
The latter two points I brought up in the last sentence of the last paragraph are facts shown by this comparative study performed by Gabriel Burdin and Andres Dean, where they looked into how cooperatives performed in the Uruguayan economic crisis between 1999-2001. Tt was found that "average employment and wages in WCs[worker cooperatives] tend to be greater than in CFs[capitalist firms]." [3, pg. 522] The wage being higher definitely makes sense, since in a worker-cooperative, there is no person at the top taking a percentage of the business profits as their own, personal, income. Instead, this income is spread across the workers, which would mean their wages would be higher. Additionally, it's been found that the average employment in a single worker coop is 10[4] while traditional businesses have only just over 4 employees on average[5]. Worker cooperatives generally are created to benefit workers, and so they tend to employ more people than capitalist businesses, since capitalist businesses will employ the minimum amount of employees possible in order to maximize one's own profits. Worker coops, on the other hand, have a goal of improving workers' lives, and so they are more likely to employ more people. Thus, this can help end unemployment by making worker cooperatives become a larger sector of the economy.

It has been found in a study conducted by Ben Craig, of the federal reserve bank of Cleveland, and John Pencavel, of Standford University, that worker cooperatives within the plywood industry are more materially productive than traditional firms[4, pg 124]. The reasons they believe for this are because:

1) "A co-op mitigates the agency cost associated with a corporation's division between ownership and control". Since co-ops are owned by the workers, they are much more likely to be informed about the business decisions than if they weren't owners, thus there is no need to spend extra time from business owners to educate them on this matter.[4, pgs 124-125)

2) Worker co-ops eliminate "the separation of interests between workers and owners."[4 pg 125] As one can imagine, there are many instances in which a conventional firm would be presented with opportunities where they can make a decision that more benefits them and harms the workers. The workers would be opposed to this, and normally what happens in a conventional firm, is that bargaining goes on and this takes up precious time that could be devoted to work. In a co-op, this bargaining would not take place, since worker-owners would likely choose what benefits the majority of the workers, whereas in a traditional business, the owner would choose what only benefits themselves.

3) Workers are able to monitor each other better than in traditional businesses where the monitor is a single manager [4, pgs 125-126]. This makes sense as well, since in co-ops, the workers are the ones who make the decisions of the company, and would be involved in hiring and firing other workers. Co-workers are more often among their co-workers than a manager is, so they would be able to monitor their co-workers more effectively than a manager. This provides incentive for each worker to provide their best work and not laze around.



Conclusion of this round:
Thus, because worker coops pay their employees more, have higher employment rates and thus can help end unemployment, and are more productive than capitalist businesses, it's easy to conclude that people would prefer cooperatives to capitalist businesses if they only knew about them and didn't have a government that favors capitalist businesses. Additionally, this is already proven that people tend to prefer cooperatives because 78% of people who know about cooperatives state they prefer cooperatives. It should be pretty obvious that if the system wasn't rigged in favor of capitalist businesses, if people were educated about worker coops and coops in general, they would likely easily overtake the capitalist bussines, and thus transfer our economy into what is known as a cooperative economy, which is a socialist economy[6]

I'll turn this over to my opponent, and wish them luck. I look forward to seeing if they can point out any flaws in my arguments.

Sources:
[1] https://www.uk.coop...
[2] www.geo.coop/story/new-survey-reveals-perceptions-and-myths-about-co-ops
[3] http://disjointedthinking.jeffhughes.ca...
[4] http://institute.coop...
[5] https://smallbiztrends.com...
[6] https://en.wikipedia.org...
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Debate Round No. 2
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Debate Round No. 3
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Debate Round No. 4
2 comments have been posted on this debate. Showing 1 through 2 records.
Posted by Surgeon 1 year ago
Surgeon
What a confused topic. Has it come to this for the left leaning thinker? Is the only way to argue against Capitalism to accept the principle of the private ownership of property, but then redefine it so in the subjective view of someone arguing against it, it isn't really private ownership.

The 'co-op' doesn't really exist, but the people within it do and are the stakeholders. They own a stake in a private enterprise. Private or Public (in your terms "Capitalist") companies don't exist, the shareholders do, they own a share in the capital of that business. Whatever the relative merits of co-ops vs private vs public companies there is no denying that they exist in a market paradigm and compete for customers and capital with many buyers and sellers. I also do not think your argument holds up overall, you have to demonstrate that the marginal efficiency of capital is better, that the returns are better, that the employers and employees are more fulfilled, motivated, happier in a co-operative enterprise as opposed to a public or privately owned one.

This is just a way of skirting around the fundamental issue. The only alternative to a capitalist free market model, is where all economic decisions, exchange, ownership, control is owned by one person (that is, the finance or economic minister of a socialist regime), who may delegate some of this activity to various people in various departments of the the same regime (which collectively we euphemistically call 'the government'). So we move from millions of people interacting in open and voluntary system, to very few people deciding by fiat their own forced economic reality of prices, supply and demand. This effectively dismantles the market. We all know how well that works!
Posted by Surgeon 1 year ago
Surgeon
What a confused topic. Has it come to this for the left leaning thinker? Is the only way to argue against Capitalism to accept the principle of the private ownership of property, but then redefine it so in the subjective view of someone arguing against it, it isn't really private ownership.

The 'co-op' doesn't really exist, but the people within it do and are the stakeholders. They own a stake in a private enterprise. Private or Public (in your terms "Capitalist") companies don't exist, the shareholders do, they own a share in the capital of that business. Whatever the relative merits of co-ops vs private vs public companies there is no denying that they exist in a market paradigm and compete for customers and capital with many buyers and sellers. I also do not think your argument holds up overall, you have to demonstrate that the marginal efficiency of capital is better, that the returns are better, that the employers and employees are more fulfilled, motivated, happier in a co-operative enterprise as opposed to a public or privately owned one.

This is just a way of skirting around the fundamental issue. The only alternative to a capitalist free market model, is where all economic decisions, exchange, ownership, control is owned by one person (that is, the finance or economic minister of a socialist regime), who may delegate some of this activity to various people in various departments of the the same regime (which collectively we euphemistically call 'the government'). So we move from millions of people interacting in open and voluntary system, to very few people deciding by fiat their own forced economic reality of prices, supply and demand. This effectively dismantles the market. We all know how well that works!
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