Non-Profit Entities - Reply to Cherie

D OC donaloc at
Tue Aug 13 10:09:51 MDT 2002

Firstly, Cherie you make some good contributions. I certainly would not
disagree with you. The tendencies you have described are indeed very real
and need to factor into any strategic appraisal of the sector which we can

The central point in my original post was that to universally condemn
non-profits or nationally owned industries as absolutely equivalent to their
private sector equivalents was going too far. I did not feel one could
extend the generalisation throughout. Your cases are specific. I could
counterpose counter-examples. Yet neither one would prove a general
'catch-all' statement such as José made about non-profits and public sector
entities. Indeed, I think it was clear that there was a degree of
contradiction within his original post in regard to the public sector being
equivalent [albeit inserted differently] to a private sector entity.

You conclude:

>Our ruling class will create and maintain all their institutions, including
their non-profit ones, solely for their own interests. Period. And they will
try to get away with whatever they possibly can, even, and especially, in
the name of charity and education. I have to agree with Jose.

Again, you jump from the particular to the general. You criticise specific
examples and use that criticism to 'paint' all non-profits. A similar use of
logic might be to find a crowd of reactionary feminists and demonstrate how
they supported capitalism to abuse the whole of 'feminism'.

The other thing you did was to see non-profits as the creation of the ruling
class. I'm not sure if this is the case universally in the US - it may be,
however, in many other imperialist countries non-profits are coming from the
bottom up. Whether they are mutual societies or creations of left-leaning
regional authorities who, under local popular pressures are attempting to
evade the strictures of EU competition directives. Non-profits can be
entirely beneficial in building a consciousness of the collective and to do
something meaningful in real terms. Before making unjustified equivalences
(which will only lead to ultra-leftist errors in the long-term) it is
necessary to analyse issues in their concrete and particular circumstances -
that's not easy but absolutely necessary. It's the sole difference between
ourselves and reactionaries (who by definition react to events without
examining the root causes).

To address one of your points. In a non-profit entity which doesn't owe
significant finance, the pressures on employee wages should actually be
lower than in the private sector because of the absence of a requirement for
a minimum rate of surplus value extraction. A non-profit should be capable
of paying everyone more for this same reason, which undermines the rationale
for the manager needing to 'come up' to private sector wages. Indeed, in
most cases I know the non-profits have the best pensions around [some even
choose not to invest in stocks even and use the money from pension
contributions to finance other social economy projects at agreed rates of

A final point is that a non-profit entity can operate in 'fringe' markets
where there has been 'market failure' (that might be a term extending
rapidly with time I expect) and can help to immediately ameliorate
conditions in some of the worst areas. Again, it depends how this is done -
if by the people themselves in an empowering way (positive) if done by the
Government to quieten things down (negative).

A core area in any non-profit (or revenue-funded non-profit) is its
management system and the democratic accountability of its executives. But
this was the case with any economic structure even in market socialist or
even partially planned economies. Many of the accusations you make about
non-profits could have been levelled at businesses in Yugoslavia or Russia -
it's the origins of all that 'corruption' talk the bourgeoisie are happy to
throw around. It also seems to me that the State-capitalist critique of the
Soviet Union may arise out of similarly utopian conceptions of structures in
the transition period - they will not be perfect and will take time to

For me, the alternative of ignoring and not defending the public sector and
the non-profit distributing sector and seeking to hope to argue for
socialism in isolation from these concrete, yet often corrupted, expressions
of socialised production/services where they exist is just a hopeless task
(unless the whole world suddenly dips into something worse than the 1930s


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