Preston’s Extremely Capitalist Experiment In Socialism

It’s a pity that the senior economic correspondent of The Guardian doesn’t quite understand the socialism and capitalism he speaks of. Here he’s praising Preston’s attempt to set up a series of workers’ co-ops. Entirely fine to do so by the way, nothing wrong with people deciding that they’ll do the business rather than inviting in outside capital and thus capitalists.

But the thing is that’s the only useful definition of capitalism there is – the use of outside the organisation capital. If people wish to pool resources to get something going then good luck to them and if the people working in the organisation are the people providing that capital then sure, we can indeed call that socialism not capitalism. But as soon as we’re gaining that outside capital we’re in that world of capitalism. Outsiders, not working in the organisation, are providing the capital, d’ye see?

So, which is this? Socialism or capitalism?

Think of it as a socialist Dragons’ Den. Using cash largely provided by George Soros’s Open Society Foundations, the city will fund and provide rent-free premises to 10 new firms owned and run by their workers. The scheme, worth up to £1m in cash and kind (compare that with the council’s annual budget of about £20m), will be run independently; and after their kickstart, the co-ops will be required to stand on their own two feet. Although given advice and expected to work together, none of the new enterprises will be told what to do.

George Soros sticking the capital in is not capitalism in what sense? Sure, it might be patriarchal capitalism, Lady Bountiful capitalism, charitable capitalism, but it’s still capitalism.

All of which rather exposes the problem with proper socialism. It finds it exceedingly difficult to produce the capital needed to fund an organisation. That’s why people do turn to outsiders to provide that capital. As soon as that happens then we’re in a capitalist world again, aren’t we?

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Jonathan Harston
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Jonathan Harston

Even state socialism looks like capitalism to me. If I get the resources to do my job from the state instead of from a bank or other investor, that’s still capital sourced from outside my activity. In writing this (and an earlier comment about rates lists and renters) I’ve realised that most of my ancestors were probably “socialists” by the capital source definition. Youngster would work for parents or near relatives, saving up wages, then use that saved-up wages (which by any definition is their own capital) to start their own buisiness, create children, and repeat the cycle. Often finishing… Read more »

Leo Savantt
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Leo Savantt

There is an element of socialist redistribution in this scheme, some part of the capital which Mr. Soros has amassed indirectly comes from the pockets of UK taxpayers as a consequence of him shorting sterling in 1992. The link is somewhat tenuous of course, but it exists. It could also be argued that some of the money going into this scheme is the result of criminal activities, bearing in mind Mr. Soros’s 2002 conviction for insider trading. However, it is fair to say that, whether benevolent or malevolent, this is a capitalist scheme involving the movement of, ill or fairly… Read more »