Tuesday, July 26, 2005

Alternate Economics: Venture Communism

I'm of two minds about the name of this idea. First, I have to say I really love the name. A name with that much cognitive dissonance wrapped up in just two words brings joy to my heart. "Yeah, I'm a venture communist," you can tell your friends, and enjoy their slack-mouthed gawping. Describe in detail how you have acquired capital and land for the people's revolution, how your wealth has increased based on your labour-currency, how sharp business practices will lead to the worker's paradise.

On the other hand, there are existing groups that could be described as venture communists. The first one that comes to mind are party officials in the People's Republic of China. You know, People's Army officers who run karaoke bars or munitions plants for their own personal aggrandizement and profit. Nasty bastards, in other words. Perhaps a new name could be found to distinguish venture communism from Chinese free-market dictatorship.

On to a quick analysis! Here's venture communism in the words of Dmytri Kleiner, who apparently invented it:

Venture Communism is an investment model designed to be a form of revolutionary worker's struggle. The Venture Commune is a type of voluntary worker's association, designed to enclose the productivity of labour and enable the possibility of the collective accumulation of Land and Capital, which, in the endgame, will eventually allow the workers to buy the entire world from the Capitalists.

I have to give him points right off the bat for not calling for a violent revolution. That has never been particularly successful for leftists, at least as far as avoiding horrible tyranny is concerned. Here's how he sees it working.

A Venture Commune is a joint stock corporation, much like the Venture Capital Funds of the Capitalist class, however it has four distinct properties which transform it into an effective vehicle for revolutionary worker's struggle.
1 — A Share In The Venture Commune Can Only Be Acquired By Contributions Of Labour, and Not Property.
In other words only by working is ownership earned, not by contributing Land, Capital or even Money. Only Labour.
It is this contributed labour which represents the initial Investment capacity of the Commune.
The Commune Issues its own currency, based on the value of the labour pledges it has.
It then invests this currency into the private enterprises which it intends to purchase or fund, these Enterprises thus become owned by the Commune, in the same way that Enterprises which receive Venture Capital become owned by a Venture Capital Fund.


I assume that, at least in the early going, this new currency will have to be in the form of stock, or otherwise translated into "real world" dollars. After all, it's unlikely that the commune will be self-sufficient right off the bat. Workers will still need national currencies to pay rent, buy food and gas, etc. Indeed, Kleiner seems to acknowledge that a bond issue will be necessary in his second point.

2 — The Venture Commune's Return On Investment From Its Enterprises Is Derived From Rent and Not Income.
As condition of investment, the Enterprise agrees to not own its own
property, neither Land nor Capital, but rather to rent Land and Capital from the Commune.
The Commune, unlike a Venture Capital Fund, never takes a share of the income of the Enterprise nor of any of its workers.
[But isn't rent a share of income?]
The Commune finances the acquisition of Land and Capital by issuing Bonds, and then Rents the Land and Capital to its Enterprises, or an Enterprise can sell whatever Land and Capital it acquires through other means to the Commune, and in turn Rent it.
In this way Property is always owned Mutually by all the members of the Commune, however all workers and the Enterprises that employ them retain the entire product of their labour.


The last two points of Kleiner's strategy involve rules for keeping communes from exploiting workers: anyone who works for a commune must be offered membership (although he says nothing about whether people could refuse, I assume so, and thereby freelance) and notes that members get one share and one vote each in the running of the commune.

Will it work? Hell if I know.

Let me say that there are fewer obvious flaws with this system than with many socialist schemes. Through the fact that there can be multiple enterprises under a commune, and presumably multiple communes as well, the system has some elements of decentralization. That's good, because a heavily centralized system has problems determining prices accurately. But is there a danger of this if one enterprise within a commune is set up to support another enterprise? Possibly.

The bigger problem is: who would invest their starting capital in something based only on labour? Where do you start accumulating the capital, both physical and human, you need to make something like this work? Starting very small, with existing co-operatives of half a dozen workers or so would probably be the way to go. But that would result in a very small amount of "labour pledges" and a correspondingly small amount of investment power. And I doubt Warren Buffet is going to shift any of his money towards venture communism any time soon.

Another problem is the fact that the current capitalist system does provide some security for workers at newly-formed ventures. The capitalist's borrowed money is on the line, and if the business fails, the workers are unemployed, but at least they have the money they were paid. (Unless they're, say, Russian miners, and haven't been paid in months.) If a venture commune fails, the labour-based currency its members have accumulated is worthless, and can't be exchanged for national currencies.

Still, I'd like to see someone try it. It might crash and burn spectacularly, or it might actually work, at least a little bit.

There seems to be no one currently trying this system out. There's little info on Kleiner available on the net, except for the fact that he appears to be something of a troll.

2 comments:

Dmytri Kleiner said...

Hello Matthew, nice review, I apreciate the feed back, just some quick responses to some of your questions/concerns:

There is a shorter, more recent text on interactivist:

http://info.interactivist.net/article.pl?sid=05/06/28/1645253

This one discusses the economics less, it is meant as more of an introductory text, to get the basic idea across.

Regarding your comments:

1- The "Venture Communist" Republic of China

China is not a communist country, it is a "state socialist" country, which in Marxism is the stage //between// Capitalism and Communism. "Communism" is a state-less, property-less society that the Marxists believe will come about after the "withering away" of the Socialist State. Anarchists do not agree whith this transitional stage of "State Socialism," that is the main area of dispute between Communists and Anarchists, rather than a "dictatorship of the proletariate" taking control of the state, Anarchists instead believe that "Communism" can only be achieved when workers organize industrially and "create the structure of the new society within the shell of the old." Thus there ought to be no greater confusion between the "State Capitalistic" practices of so-called Communist China, then exists between say Liberalism/Neoliberalism/New Liberalism/Libertarianism which all represent very different schools of though, or Anarchism/"Anarchist Capitalism" or even Socialism/"National Socialism." Words that refer to Libery, Society and Community make up the names of most political schools of thought.

- New Currency

There is a clear distinction in Venture Communism among the three official financial instruments; Scrip (currency), Stock (shares), and Bonds (debt).

Scrip is *not* a form of Stock, Scrip is a backed currency, the basis of it's value is derived from the value of the land and capital available to rent from the commune, simular in principal to the State Theory of Money basing currency value of the ability to pay taxes, the theory is that Scrip will always have utility, and therefore exchange value, so-long as there is demand for the land and capital owned by the commune.

- Isn't rent a share of income?

No, it is not, the just wage of labour is the entirety of its product, not the product of others, thus the worker must keep the entire //output// of the productive process, however he must compensate the providers of the //inputs//, such as land, capital and the labour of others.

a venture capital fund takes a direct share of revenue, which is to say that it take a share of the output away from the worker, a venture commune does not do this, it only collects the value of the inputs it provides.

- Start up obstacles.

I agree that existing co-ops are the likely starting point for Venture Communism.

- Being a Troll.

Well, //consider the source//. Some might question the conclusion of an argument which includes such brilliant prepositions as "Dmytri is just annoying" and makes no reference to anything I have actually written. This is ancient history in anycase, the so-called "april crisis" was in 1996.

That said. I am a Troll. In the spirit of "Agitate. Educate. Organise."

Thanks again for your feedback.

Anonymous said...

Most excellent points der Quirk. I propose, your idea as well, to start The Public Trust Party, however, I also propose to organize it internationally, as the greens have sort of done it, and incorporate gnuverment/oe concepts and the poll gathering/itemising and prioritizing "similar to the stock exchange only deals with the issues, options and polls" to aid the decision making of elected officials, venture communes, and general public utilising ranking system of voting for all options instead of picking one out of many, i.e. Condorcetising problem solving, and, as it was said, if there is no solution, than there is no problem, and in any case, there is always a choice about the attitude towards any situation.

Yes, in 1996, indeed, those were the days, "each day like the last day of Pompei*", of the blue nerd-demogougues who felt it was theirs in hair the right to judge about whom and how it is required to make a post in the world and about what, and where is allowed or not. As in alt. and alt.happyclown case.

(* from a poem by Yehudah Lionel Cullman)

Cheers,

sasha.

the one and only...