The economic crisis of the past five years has caused a lot of people around the world to question the very foundations of our system -- is capitalism really the best way to do things?

One of the biggest problems, though, is that there seems to be no other way to run an economy. Communism has been discredited—the Soviet Union failed, and China has moved to a strange hybrid that at times seems to take the worst of both communism and capitalism—and no one's got an alternative.

Dr. Richard D. Wolff has spent the better part of his life as a critic of capitalism. Since the rest of the world caught up with his critiques, he's spent some time trying to do just that—come up with an alternative. He's been studying cooperatives and collectively run, worker-owned businesses for a while now, and he's launched a new Web site, Democracy at Work , to explore the concept. He's also got a new book coming out in September from Haymarket Books, titled Democracy at Work: A Cure for Capitalism , in which he makes a case for worker-owned co-ops as an alternative system that presents a real challenge to the way we do things now.

Wolff took some time to talk to AlterNet about his new projects, the Mondragon Corporation in Spain that forms the basis of many of his arguments for the potential of successful collective enterprise, and some real-world ideas to revitalize the labor movement, rebuild the economy, create jobs, and most of all, give Americans more freedom where they spend the majority of their lives: on the job.

Sarah Jaffe: I want to start off by asking about the Democracy at Work Web site and your upcoming book.

Richard Wolff: I guess the best way to say this is that over the last three years, my life, just personally, was completely transformed by this [economic] crisis. I decided to say goodbye to the University of Massachusetts, where I was teaching, and come to New York City. I left in 2008 and to say the least, the crisis was already underway.

I got swept up in a peculiar way because I'm a critic of capitalism. It's what I've done all my life; I've written books and articles, but most of the time I'm the edge guy, the strange one, the one who doesn't fit. My parents are immigrants, English is my third language, so as an immigrant, you have to make up for what was interrupted or stolen in a sense from your parents. They hope to recoup what they couldn't do in life through you. There was no question I had to be the good student, I had to play a musical instrument, I had to be on the football team, so I did all those things. I was always marginal but because I had been a good student, I went to Harvard and then to Stanford and then my Ph.D. At Yale.

By American standards, I'm a poster kid for all that stuff. It's all phony as a three-dollar bill, what goes on in these schools, I can assure you. The metaphor I use is when you watch an ad for some soap and the ad says, “If you use this soap your sex life will be improved.” They want your money and they're going to tell you anything to buy that stupid soap.

Harvard, that's what they do. It's the same gambit. You'll get an education more or less like you get anywhere else, with one exception—the people have been sold a bill of goods and they believe it. So I was the radical economist, but I could function. You rolled your eyes, as if, "What happened to this nice young man, somebody hit him on the head with a frying pan and he got a little crazy."

The irony is, after the crisis then suddenly capitalism doesn't look so good. Wait a minute, there's something wrong. Who can we get to talk about it? And the answer is not too many people, because you made it unbearable for the last 30 years. But I had been able to get a job at U Mass where I was paid to be a radical economist. I made them sign a letter when they hired me that I am understood to teach Marxian economics. They said "Why do you want such a letter?" I said "Because I don't want some pint-sized legislator coming down the road later saying I'm not doing my job!" I have that letter in my files to this day.

So the joke is, for the last three or four years, I'm a rare commodity. I do two, three, four interviews almost every day, I write like there's no tomorrow. And when anybody makes a noise, I wave the pedigrees and they go “Ehhh.” Like you wave the garlic or the cross at a vampire.

I've had a wonderful time for three years being the critic of capitalism, basically recouping for people all the insights accumulated by the numberless critics of capitalism that are as old as capitalism itself. Like every social system it had its critics – you could pretend it didn't but they're there. They wrote the articles and the books and they made the movements. Only in the weird imagination of American conservatives is there not a long tradition of anti-capitalist thinking, agitation, strikes, movements, parties, government. It's very rich.

Over the last six, eight months, I've noticed something. Am I still called to provide criticisms of capitalism? Yes. But something new has happened – call it the maturation of the critical movement here in the United States and the rest of the world. It's no longer enough. They want to know, OK, you're right, capitalism sucks -- for many of them that's a big step, I don't want to in any way minimize it. But they're saying to me, OK, we've read your stuff, now give us an alternative.

That's what I'm doing. I'm saying OK, fair question, I'm one of the people producing that question in your mind, I can't not offer an answer.

The book is a product of this, the Web site is a product of this. I appeared on the Charlie Rose show 10 days ago, I talked about Mondragon, because Americans listen better if you describe something that exists than if you describe something that could exist. Because that's where the most advanced thinking of people that have been caught up in this crisis, that's what they want to talk about. It's not necessarily that they agree with me, but they want to have a proposal to chew on. They want to hear how and why this is different from capitalism, and how and why this should do any better in dealing with any kind of social problem and then how and why should we believe that if it's better, that it could ever be actually achieved. We don't want pie in the sky.

That Web site is a tension of these parts—part criticism of capitalism, part argument for an alternative, and part lots and lots of concrete discussions of people doing that, whether they're forming a co-op in a laundry in Cleveland or food service in Massachusetts, or Mondragon, the big one. The Web site is going to be full of examples, first-person descriptions, case studies, not so much because any of them are the be-all and end-all but because the reality of people who look and sound like you, who are in this state where you might be surprised to find them (for example, South Carolina) makes it more real, more American. People are fascinated, when I start doing a little bit of the history of co-ops in the United States, it's a shock, Americans are so underdeveloped about their own history.

The book is the best case I can make for transforming the organization of enterprises from a top-down hierarchical capitalist model into a cooperative worker self-directed model. What does it mean, where does it come from, why is it the solution, all as if I was the lawyer you hired to make the case.

SJ: When you are a critic of capitalism, people say “Well, what do you want then? Communism didn't work!”

RW: And the book doesn't shy away from being critical of socialism.

SJ: But in your last book, Occupy the Economy , you made the point that communism didn't actually change the way the job worked—it replaced the capitalist boss with the party boss, but didn't make the workplace more democratic.

RW: I develop that idea more in the new book.

I don't want to disrespect the tradition. What socialism and communism did, if you count from the end of Marx's life, 1860s, '70s, to the present, a good 150 years, socialism and communism brought ideas, a worker should be what we celebrate in this society, notions of real democracy, real egalitarianism, and internationalized them on a scale we've never seen before. There are Marxist and socialist, communist parties, clubs, newspapers, in every country on the face of the earth. It spread a little bit like what happened to the Muslim religion, to Christianity. It must speak to something in people to have that kind of spread.

I want to be respectful—you did a lot, what you did and what you said spoke to people. But that's not an argument that, the conditions of the 21st century being what they are, you don't need a radical questioning and rethinking of your strategy. It says you changed society, socialized property, bravo to you. You substituted a rational attempt at planning for the irrationality of the market, good for you. But you didn't transform the inner structure of the production process.

If I had more time I would say the same thing is true for the family. But I can't fight every battle.

In conventional socialism, China, Soviet Union, Cuba, they didn't transform the workplace, for all kinds of reasons which I understand. But I do come later, I do look back, and I think that's where they went wrong. And the argument of the book is because they didn't change it, they bred the kinds of angers, resentments, envies, tensions, that in the end destroyed what they had created. It isn't that you should've gone further because it would've been nice. It's that you didn't go further and that undermined what you did.

SJ: Corey Robin and some other folks have been taking on libertarians with this argument, saying "If you're so concerned about liberty, how come you aren't concerned with liberty on the job?" Connor Kilpatrick argued that the place where most Americans face tyranny isn't the TSA, it's the boss.

RW: The overwhelming majority of people who lost their jobs in the great crisis of the last five years were fired by a private capitalist employer. That's the man or woman who told you not to come back Monday morning because you weren't needed anymore. The overwhelming majority of the people who were turned out of their home because of foreclosure had that foreclosure procedure initiated by a private capitalist banker or other lender. In a reasonable inference, you'd think that the unemployed, the foreclosed, would be angry at the person who did it to them.

But they aren't, because of an ideological argument which teaches people to leap over the proximate cause of their misery and find an ultimate cause, which is the government. So you lose your job and you're furious at your congressperson, or the president. “I'm going to vote for Romney because I lost my job and Obama was president when I lost my job.” What the link is between Obama and your firing is, you couldn't articulate. Your ideology never went that far. You just know that the allowable thing to hate in our culture is the government.

The libertarian is taking a free ride on an ideology that comes from sources they don't even respect, but they don't question. And in doing so they do an enormous disservice, you elide, you destroy, you undermine what could be the basis of a movement to challenge the prerogatives, the power, the tyranny of the capitalist, which “libertarians” would otherwise oppose.

We Americans are very strange. The boss fires us, and we're angry at the congressman who didn't even know about it. And if I were a capitalist I'd be laughing all the way to the bank. I kick you, and you're angry at somebody else!

SJ: Josh Eidelson wrote a piece about Chick-fil-A employees who'd been fired because they weren't properly Christian. Everybody's talking about this company trying to impose its religious beliefs on people through political donations, but what about the way they're forcing those beliefs on the people who work for them?

RW: If you do philosophy, you know that this discourse of rights and freedom is a hornet's nest. The only way to sustain this is to be blind to the obvious contradictions. The freedom of enterprise denies the freedom of a job. Either I'm free to have work that's meaningful so I can support myself and my family, or if you have freedom of enterprise, you're taking away mine.

SJ: We're in this moment where most Americans have never been in a labor union, they don't know that what labor unions did was more than fight for better wages, they were there to give you a say in the conditions of your labor.

RW: "Democracy at work" is also a kind of branding. There's a hundred ways we could've called it; democracy at work is a way of introducing the fact that democracy in this country doesn't include work, and any democracy that doesn't include work ain't going to be a democracy very long, if at all.

People pick that up. Here we are, people who go to work five days out of seven, that's the majority, 9 to 5, we get dressed, we get in our car, we go to work, the whole day is built around work. If you believe in democracy, then how in the world can you justify not instituting it in the place where we spend most of our adult lives?

And you wonder why people don't give a damn in the community, don't participate in politics, they don't vote, if they vote that's all they do, the number of people who could tell you where the Democratic party club in their neighborhood is one out of 50. That's because nobody has any aptitude for this, any taste for it, and they don't have any taste for democratic procedures because they don't have them where it matters most, which is on the job, where they spend most of their time.

And people look—you can see almost a sadness because they know it's right. They know they haven't thought that way. I can see it in their faces.

SJ: In that vacuum of "There is no alternative," there is suddenly space to propose an alternative. Everyone was saying "Occupy hasn't proposed a new system," and my response is "We're just getting to the point where we have space for the discussion of a new system."

RW: The critique of Occupy for not having an alternative—the right wing comes up with 47 reasons to hate Occupy, of course. But our people? The broader left? That's the best thing that has happened to the left in this country in 50 years! Up from below, massive power, against all the odds of newspaper blackouts and police hostility, and, for me, here's the difference that I stress: up until now, every oppositional movement after the 1940s, from the civil rights movement or the women's rights movement or the ecological movement have been unable to dare to be anti-capitalist. It was considered to be too dangerous, it would split us, it would bring down the wrath of God and the police on us, and the government, and the newspapers would hate us, we wouldn't dare.

So organizations either abandoned any movement in that direction or split into smithereens. Occupy, whatever anyone says about it historically, didn't shy away from that, didn't do that. The 1 percent versus the 99 percent, you're not going to scare us into being quiet about the economics. If there weren't other reasons to applaud Occupy, that would be enough. It's sad that it hasn't continued the same way, but that isn't surprising, you've got 800 obstacles to overcome, you can't do everything at once, that's a sadness you share, that there are all these obstacles.

I can personally attest that my invitations, my reception, the whole tone of my work were transformed by that. City Lights Books in San Francisco wanted that book [Occupy the Economy] because it would be sold to the Occupy movement and all of its supporters. Something as tangible as the assemblage of those things into a book is an Occupy product.

SJ: I want to go back to Mondragon, and hear about how it works, and anybody in the US who is working on bringing those ideas here.

RW: I went in May and June of this year and visited. They were very gracious, gave us about seven, eight hours one day, they answered every question we had, took us around to see the place.

I think it's wonderful—for me it's like Occupy in the sense that, of course there are problems. It's an amazing achievement and it has to be celebrated, and then we can analyze the strengths and weaknesses.

It starts in 1956, it's got six people and a wayward Catholic priest. Clearly a leftist, but that's not so unusual in European priest ranks. What's more important is that they're in the Basque territory. The Basques are a people apart, they have their own language, their own culture. They control the northern quarter of Spain as a country. They go over the Pyrenees, into France. And the Basques have been willing to fight against the Spanish government and the French government, for their independence and their right to have their own language. It's a highly cohesive, deeply traditional, militarily equipped, very hilly country where they are, so you're going to have a hard time fighting them, which the Spanish and French keep discovering. Every 30 years some idiot doesn't understand this and gets reminded.

At the end of World War II, having had the civil war and then World War II, the Spanish society is decimated, there's no jobs for anybody. This wayward priest said, we Basque people are going to take care of each other, and we're going to do whatever we want, and if the people in Madrid say anything, we will remind them what we will do if they bother us.

He says OK, there's no capitalists around to hire everybody, we're going to make our own jobs. He sets up a cooperative enterprise with six people in 1955. Now it's got 85,000 worker-members and another 15,000 to 20,000 others. I'm not clear whether that's their number in Spain or in Europe or includes all of them, because they now have about 75 little enterprises around the world. But the big enterprise, their core, is in Spain, in the northern part, in Basque area they're the number-one employer. You're talking big corporation.

I drove in, and on the side of a hill is a beautiful, modern, corporate headquarters. Glass, beautiful shrubbery, grass is clipped perfectly, we park our car in a lovely sculpted parking area. It looks for all the world like you're going into some corporate headquarters, you can see right away this is a serious operation. All their businesses look like that, they look like what they are, which is a big business, except they're an assemblage of co-ops. It's like a holding company, within which are all these subordinate units which are co-ops.

They include an immense supermarket chain, factories that make washing machines, the one we visited, and then co-ops as little as 10 people raising rabbits and everything in between, agriculture, industrial, service. On the other side of the hill they have this set of other buildings which are their labs, where they have scientists. They've hired I think 600 or 700 full-time scientists who do just research and development, new products. They are so good at it that General Motors has a team of researchers who work together with them. A variety of companies partner with them because they're so good at their R&D.

So what can I tell you about it? First, the growth. From six people in 1950 to more or less 100,000 workers is stunning. Very few capitalist enterprises have such a history over the last 50 years. That's a history which tells you that with all of the ups and downs, and there are plenty, they have managed to survive competitively and to grow. So the viability of a cooperative enterprise, in its competitive situation with non-co-op enterprises is stone-cold proof that it can be done and done effectively.

I'll give you an example. We take a tour of a washing machine factory, and first off, you and I could adjourn to the floor and have a picnic, that's how clean it is. And I say to our guide, 'How do you decide on machines when you need a technology? Do you always buy your parts from within the co-op?'

No! he says emphatically. Every co-op in the Mondragon system has the following order: you find the best equipment at the lowest price. If two pieces are identical and one of them is made by a co-op member, sure, you buy that. But short of that.

And then he takes me over to this—by the way, this factory is an immense building, think of the biggest Walmart you've ever been in, like that, these cavernous places—this big machine, and it's German, I read German, I can see that.

So then, what is the co-op? How does it work? He smiles and says "It would take me days to get it through to you but I'm going to give you a few examples. See those two women over there?" He points to these two women working on an assembly line. He says "They're about done, in about 15 minutes they will be done with two hours of work. In every factory, at the end of two hours, you do something else. No worker is kept on the same job for more than two hours."

I asked why, and he said because it's stultifying, it makes you a zombie. He used all kinds of colorful language to say that the workers don't want to do the same thing every day, it's not healthy, and it's not good for morale. So every two hours a little bell goes off, and they'll do similar work but it's a different machine, different action, different body movement, different workers to coordinate with, that's what a co-op does.

He said, "I'll give you another example. Once a month we have a meeting where we make a whole lot of decisions. The meeting is on company time; workers get paid their regular wage, because this is considered an essential part of the business." They're also paid to read the reports that they need to read to take part in the meeting. Financial decisions that have to be made, production decisions. Because, he said, if you do not provide pay you teach people that the running of the enterprise, your role in that, is not as important as your role making widgets on an assembly line. That would be counterproductive to the whole thing. They wouldn't then participate. A co-op requires that.

So all of these meetings are on paid time. And all of them are mandatory. Just like you say to a worker you can't decide not to show up for your shift at the factory, you can't decide not to come to the meeting. Your job description has these multiple dimensions, that's what the co-op is. If you don't want to do that, we understand, but then you don't belong in the co-op.

I thought it was a marvelously straightforward way of making clear to a worker when he or she begins the work that this is a different operation from anything you've been used to before. That got confirmed later when they explained to me the difficulties they're having when they open plants around the world—which, they explained, they have to for competitive reasons—he said we've always taken the steps necessary to secure this enterprise and the jobs we provide. So, he said we opened four plants in China, we tried to get the Chinese workers to come to the meetings. They won't. They have no idea what you're talking about. They get extremely uncomfortable, paying them makes no difference. Which is a comment on China, by the way. This “communist” country has workers who find the whole thing off-putting. There's something very poetic about that.

He says we rigidly apply the following rule, the gap between the highest-paid worker and the average worker cannot be more than six and a half times and our average is four times.

SJ: That's for the equivalent of the CEO?

RW: Right. Here, CEOs get paid like 300 or 400 times. And that you could see everywhere. There was a casual relationship. At every moment we could see—and I watched—the eyes of the men and women assembly line workers, when Miguel, who's taking us around, stopped and introduced them to us and us to them, and we would have a conversation.

The comfort and the relationship between them I had never seen in any place I've ever been. They were way too comfortable with this guy, in a way that I wouldn't have been. I don't shrink in fear, but I know who that is. You didn't have that there.

The other thing I think was so stunning was, in the community—we drove around, the community—the city of Mondragon is a small city. They obviously dominate this place. You can feel it, it's hard to describe—everybody looks like everybody else. You see it right away because you're used to people displaying their different incomes. In any American city you can see it right away, you know what neighborhood you're in. Here we drove around, and it looked very similar everywhere. I asked about it, and he said, yeah, the gap, it's not that big a difference. When you factor in the scale, one family's larger, one family's smaller, it cancels out.

So I found all of this stunning. They were very honest. I said between you and me, do the workers really participate in making all the decisions? And he said, it varies. Some co-ops they really do, some co-ops they don't. We try to figure it out, we try to adjust, we can succeed sometimes, others we don't. It's an ongoing struggle to maintain this kind of an enterprise.

He said, look around you and you tell me. It is an attempt, 50 years old, to build this kind of a structure, to struggle with it, to fight against the political system that doesn't really want this, the capitalists we compete with who don't have to pay anybody to sit around in a meeting, and look at this.

He took us to a bank, they have their own bank. That's the bank, it lends money to our members, and it pays, they pay us back because it's a mortgage. And they're good bets, because we employ them!

The two biggest things that he attributed their success to: solving the capital problem and solving the labor problem. What did he mean? "We take a cut of the profits of every co-op in this enterprise, and there are thousands of them, and that is our fund. And with that fund we help every member if and when they need it. So if you're doing great for a while you put in, until the time comes when you need, and then you get." He said, if we hadn't done that, if we hadn't coordinated and unified the co-ops, we would've died.

The second thing: labor. We basically say to our workers, you come and you join--there's a probation period like joining a fraternity or sorority or something—we're going to take care of you in terms of finding you a job.

He gave an example. Because of the recession in Europe, which is huge, their washing machine company, which is a major producer and exporter, suffered. They had 2,500 workers, they had to lay off 600. They did. But they have an elaborate rating system, every single worker has a point system he or she gets, and it includes their education, if they have a medical problem, the size of their families, their work history, and it ends up giving you a number that ranks you. For example, he said, "When we had to lay off 600 people, we could find jobs for 412 elsewhere in Mondragon. But what about the other 100-and-something? We would pick those who by our criterion system were eligible for retirement, and we offered them retirement. So they would go into our retirement program, which is also maintained by Mondragon, it's self-insured. We offered them a retirement if they wanted to, and if not we would sustain them until we found them a job."

It's just the obvious in some ways. They take the 400, they give them a training program, they give them choices of where else in Mondragon where they can take people, if it's more than a 20-minute drive you are not only retrained, you are given a subsidy to cover your transportation costs so that you can drive. Nobody loses a nickel of income throughout this entire transition period.

Those things—we share capital, and we go to the ends of the earth to keep you working. I said "At a time where the official unemployment rate in Spain is 25 percent, you must be popular." It was the one time in the meeting where he laughed. "Yeah, it's hurting us, but in other ways it's the best thing for us, because we do something that nobody else does. We make sure you keep working."

So here's a concrete effort and experiment. It has its peculiarities—it's Basque, it's a homogeneous population, ethnically, religiously, everybody looks like everybody else, everybody goes to the same church, speaks the same two languages. But those are not all game-changing situations. It can be done.

In terms of the United States, someone has to spell out for the labor movement what it would mean. What would a real partnership be, between a traditional labor union like the United Steelworkers and a movement of the sort that I would like to see. And here are some wonderful things to play with.

Imagine a union that had an official two-pronged strategy. Prong one, you bargain collectively, you do what unions traditionally do. Prong two, we're going to organize workers into self-directed enterprises. We're going to move energetically the minute we hear that there's a factory or enterprise planning to shut down, to close a facility, to move a facility, we're on it like white on rice. We're in there saying go, we'll take over. You can leave, but you've got a whole new problem here, Mr. Corporation. You think you're moving, you're not moving, you're adding capacity in China, in Bangladesh—we're going to continue here, and we're going to be a competitor of yours. Because we're American, we'll be producing locally, we're not going to have your transport costs, we're going to have a lot better PR than you are, because we're going to tell everybody, you've got a choice, we, who kept it going, or them, who are exploiting cheap labor over there.

Then, what happens to the bargain between the union and the boss about that move when that's in the wings? That's a very different conversation. If I'm sitting across the board from the boss, begging and pleading, that's a very different conversation from "When you leave, we're going to be right here, we're going to make your life so unpleasant." That is much more powerful.

Suppose a movement like this begins to coordinate with sympathizers, students and we begin to become a social force, saying hey, there ought to be government support for this. Just like there's a government administration that favors small businesses, or a minority-owned business association from the government, there ought to be a worker-self-directed enterprise administration that provides seed money, subsidized loans, technical assistance, orders, to these, to help them.

Here's how it would be sold, today, by me: it's an unemployment solution. And there's a model for it: the Marcora law in Italy. It dates from the 1980s, and I advocate for that here. If you become unemployed in Italy, you are given a choice. Option A: you go on unemployment like in America, you get a weekly check for a couple years, that's your unemployment benefit. But you can choose an alternative if you wish. The government of Italy will give you the entire two to three years of unemployment right now in a lump sum. But here's the condition. You must get together with eight or 10 other unemployed people to make the same choice with you at the same time, and you must commit to using the lump sum as the startup capital for a collective enterprise, cooperatively owned and operated by all of you unemployed people.

In theory these people will now have a commitment to stay employed, because if you get unemployed again you can't dip back into the unemployment. The government's not out another nickel. We would've given these people that anyway. Instead what we're getting is something much better. Instead of these people sitting on their ass, we have people out there busting their butts to make a successful enterprise because it's their chance, it's their way out of their own situation.

The business community has gone after it three or four times, they've weakened it but they haven't been able to get rid of it. For me the shock value of telling people such a thing exists. You want to do something? We already have a menu of concrete options, you could come up with.

Could you imagine a union movement that stood behind these kinds of efforts, to get a Marcora law or its equivalent? If the unions had a two-pronged strategy like this, young people's eyes would pop open and they'd be coming in droves. We could make it very exciting, a movement not just to get a union person a better job and a better pension, which is a worthwhile goal. But this is changing America.

If we do this, Americans will have real freedom of choice. They'll be able to conceive of a job not just in a top-down hierarchical capitalist enterprise, but they'll have the choice to go work in a different enterprise, which these unions have helped to develop, with the help of the government and the Marcora law equivalent. We're bringing freedom of choice as to what kind of job you're going to have.

We're going to make sure that every product has a tag on it that doesn't just say "Made in China," it's going to tell you where it was made. It's going to have a new little symbol that is going to tell you whether it was made in a capitalist, top-down hierarchical enterprise or the kind of enterprise you and I would like to see. The same kind of energy that goes into buying fair-trade coffee would now go into supporting worker self-directed enterprise. Do you want to support workers having a decent life? A life where they aren't drudges that someone else tells what to do? Buy this plastic made from workers' factory rather than that one.

You do this properly and you could have a movement of support for this. The labor movement could recoup, by doing this, what it once had, that it wasn't just about helping workers get a better deal, that it was a social movement to change the culture.