Executive Summary
The 99% Reset is a decentralized, ownership-based movement that transfers capital from the 1% to the 99% through worker co-ops, Community Land Trusts (CLTs), credit unions, and Citizens' Wealth Funds—all private, democratic, and irrevocable. It is not communism, which historically centralized power in the state and failed precisely because it was political, not cooperative. Communism collapsed under bureaucratic tyranny, economic miscalculation, and lack of worker voice—evidenced by the Soviet Union (1991), China's pivot to state capitalism (1978), and Venezuela's hyperinflation (2016–2025). The Reset, by contrast, rejects state ownership, vesting equity directly in individuals and communities via legal trusts and bylaws. This paper contrasts the two models across ownership, incentives, politics, and resilience, proving the Reset succeeds where communism failed by being cooperative, not political.
1. Core Structural Difference: Who Owns the Means of Production?
| Dimension | Communism (Historical) | 99% Reset |
|---|---|---|
| Ownership | State (central planning boards, party elites) | Workers, residents, citizens (co-op members, CLT leaseholders, fund shareholders) |
| Control Mechanism | Political decree (Five-Year Plans, Gosplan) | Democratic vote (one member, one vote in co-ops; CLT boards) |
| Legal Form | State property (no private exit) | Private trusts (Canada Cooperatives Act, perpetual affordability clauses) |
| Example | USSR: 100% state farms → 1989 food shortages | Québec: 10,000+ co-ops → highest global density, Gini drop since 1930s |
Communism nationalized everything into the state.
The Reset privatizes everything into the 99%.
2. Why Communism Failed: Politics Over Cooperation
Communism's downfall was not ideology but execution via politics—relying on state coercion instead of worker cooperation.
| Failure Mode | Historical Evidence | Why It Happened |
|---|---|---|
| Bureaucratic Tyranny | Stalin's purges (1936–38): 700K executed; Mao's Great Leap (1958–62): 30M+ dead | No worker voice—party elites, not co-op members, controlled production |
| Economic Miscalculation | Soviet collapse (1991): GDP per capita $3.5K vs. U.S. $23K; shortages of bread | No price signals—central planners guessed demand; co-ops use market feedback |
| Incentive Collapse | "They pretend to pay us, we pretend to work" (Soviet joke) | No equity stake—workers got wages, not ownership; co-ops pay dividends |
| Corruption & Elite Capture | Venezuela (2016–2025): PDVSA looted; hyperinflation 1M% | State monopoly enabled theft; co-ops have transparent bylaws |
Politics killed communism.
Cooperation powers the Reset.
3. The 99% Reset's Anti-Communist Safeguards
| Communist Trap | Reset Solution | Proof of Resilience |
|---|---|---|
| State Dependency | No state ownership—all assets in private trusts | CLTs: Burlington VT (0% price inflation in 30 years); Mondragón (80% surplus reinvested) |
| Central Planning | Market + democracy—co-ops compete, vote on strategy | Québec co-ops: $47B revenue, 120K jobs, member-elected boards |
| Elite Capture | One member, one vote + 5–7 year equity vesting | Colorado law (2025): 2% annual sale to worker trust—irrevocable |
| Reversibility | Legal perpetuity—trusts can't be unwound | Norway Oil Fund: $1.7T, dividends only, no political raids |
The Reset is legally bulletproof.
Communism was politically fragile.
4. Ownership vs. Redistribution: The Fatal Flaw of Communism
| Model | Flow of Wealth | Outcome |
|---|---|---|
| Communism | 1% → State → 99% (as wages/services) | State becomes new 1% (nomenklatura palaces) |
| 99% Reset | 1% → Citizens' Wealth Fund → 99% (as equity/dividends) | 99% become capitalist class ($2–4K/year per citizen) |
Communism redistributed income.
The Reset redistributes capital.
5. Historical Proof: Cooperation Wins, Politics Loses
| Movement | Method | Outcome |
|---|---|---|
| Soviet Communism | Political (state seizure) | Failed 1991—GDP crash, elites fled with assets |
| Mondragón Co-ops | Cooperative (worker ownership) | 80K members, 70+ years, outlasted Franco, EU crises |
| Québec Co-ops | Cooperative (credit unions, farms) | 10K+ entities, top 1% share down 42% → 18% (1950–1980) |
| 99% Reset | Cooperative (boycotts → co-ops → funds) | Projected: 40% market ownership by 2040 |
Cooperation scales. Politics centralizes.
6. Why Critics Call It "Communism" — And Why They're Wrong
| Smear | Reality |
|---|---|
| "You're seizing private property!" | No—we buy it via funds (2–3% TSX tax) or force sales via vacancy taxes |
| "You want state control!" | No—state is a tool (taxes), not the owner (co-ops are private) |
| "This is socialism!" | No—socialism = state ownership; cooperativism = worker ownership |
The Reset is capitalism, but for the 99%.
The Key Distinction: Private vs. State Ownership
Communism's Model (What We Reject):
- State seizes factories → Workers become employees of the state
- Central planners decide production → Quotas, not market demand
- Party members get privileges → Dachas, imported goods, corruption
- Workers have no exit → Can't quit, can't vote out managers
Result: Soviet GDP per capita $3,500 (1991) vs. U.S. $23,000. Workers still alienated, just with different bosses (party instead of capitalists).
The Reset's Model (What We Build):
- Workers buy factories → Via wealth fund loans, union conversions, or startup co-ops
- Members vote on strategy → One person, one vote (not one share, one vote)
- Profits distributed as dividends → Average Mondragón member gets 20-30% annual bonus
- Equity vests over 5-7 years → Can sell back to co-op, take windfall
Result: Québec co-ops $47B revenue, 120K jobs, member income 15-20% higher than non-union equivalents. Workers own, not just work.
The Incentive Problem: Why Central Planning Failed
Soviet joke (1980s): "We pretend to work, they pretend to pay us."
Why this happened:
- Workers got fixed wages regardless of productivity
- No ownership stake = no reason to innovate
- Central planners set quotas (e.g., "produce 1M shoes") → factories made 1M left shoes (met quota, useless output)
Reset solution:
- Co-op members get base wage + profit share
- Ownership stake = direct incentive to improve efficiency
- Market feedback (customers buy more = higher dividends) guides production
Example: Mondragón during 2008 crisis:
- Option A (capitalist): Lay off 10,000 workers, protect shareholder dividends
- Option B (communist): State mandates no layoffs, factory runs deficits, collapses
- Option C (co-op): Members voted to cut hours 10% across board, preserve jobs, no dividends for 2 years. Result: Zero layoffs, returned to profitability by 2011.
Democracy + ownership = adaptive resilience.
The Corruption Problem: Why State Ownership Enables Theft
Venezuela (2010-2025):
- State oil company PDVSA looted by Chávez/Maduro allies
- $300B+ stolen (per U.S. Treasury estimates)
- Hyperinflation 1,000,000% (2018 peak)
- Citizens starving while elites fled to Miami
Why: State ownership = no transparency, no accountability. Party members could raid budgets, award contracts to cronies, hide losses.
Reset safeguard:
- Co-op bylaws require audited financials (published annually)
- Members vote on executive salaries (Mondragón: CEO max 6x lowest wage vs. 300x in corporations)
- Theft = criminal fraud (private contracts enforceable in court)
Example: Burlington CLT (1984-present):
- 40 years, zero embezzlement scandals
- All land transactions public record
- Board elected by leaseholders (can't raid fund without majority vote)
Private trusts have legal protections. State budgets have political loopholes.
The Exit Problem: Freedom vs. Coercion
Communism: Can't leave. Soviet citizens needed state permission to emigrate (refuseniks jailed). Cuban rafters shot crossing to Florida.
Reset: Can leave anytime. Co-op members can:
- Sell equity back to co-op (at vested value)
- Move to another city/co-op
- Start competing co-op
This freedom creates discipline: Bad co-ops lose members; good ones grow. Soviet factories couldn't fail (state subsidized losses forever) = no accountability.
What About China? Didn't They "Succeed"?
No—China abandoned communism in 1978.
Deng Xiaoping's reforms:
- Dismantled communes → private farming (productivity tripled by 1985)
- Allowed private businesses (now 60% of GDP)
- Stock markets, billionaires, inequality (Gini 47 vs. 29 in 1980)
China today = state capitalism: Party-controlled corporations + market economy. Not communism (no worker ownership) or Reset (no democratic co-ops). It's authoritarianism with billionaires.
Proof: China has 562 billionaires (2nd most globally). Communism has zero billionaires by definition. Reset aims for zero billionaires via wealth redistribution, not party control.
The Reset Is Capitalism—But Democratic
Traditional capitalism: Shareholders own, workers labor. Profits flow to capital.
State communism: State owns, workers labor. Profits flow to party elites.
Democratic capitalism (Reset): Workers own, workers labor. Profits flow to workers.
We don't abolish markets—we democratize ownership.
- Co-ops compete for customers (market discipline)
- Members vote on pricing, wages, strategy (democratic control)
- Dividends reward productivity (aligned incentives)
Mondragón sells globally: Competes with Bosch, Whirlpool, Ford. Not a charity—a $12B business owned by 80K workers instead of billionaires.
Conclusion: The Reset Is the Antidote to Communism's Failure
Communism failed because it was political:
- State ownership → elite capture
- Central planning → economic collapse
- Coercion → worker alienation
The 99% Reset succeeds because it is cooperative:
- Worker ownership → aligned incentives
- Market democracy → adaptive efficiency
- Irrevocable trusts → permanent power
In 20 years:
- Communism's legacy: Ghost towns, oligarchs.
- Reset's legacy: 10M co-op members, $2–4K annual dividends, top 1% share <10%.
The 99% don't need the state to own the future. They need to own it themselves.
For Organizers: How to Respond to the "Communism" Smear
When critics call the Reset "communism," respond with:
1. Ask them to define communism:
- "Do you mean state ownership? We're building private co-ops."
- "Do you mean central planning? We're using democratic votes + markets."
- "Do you mean no private property? We're creating private trusts owned by workers."
2. Cite historical examples:
- "Mondragón has 80,000 worker-owners and $12B revenue. Is that communism or capitalism?"
- "Alaska's Permanent Fund pays dividends to all residents. Is that communist?"
- "Québec has 10,000 co-ops. Is Canada communist?"
3. Flip the script:
- "You know what's actually like Soviet communism? Corporate monopolies where workers have no say and profits go to elites. We're making capitalism democratic."
The Reset is what capitalism promised but never delivered: Ownership for those who work.
References
- Mondragón Corporation. (2025). Annual Report.
- Québec Co-op Federation. (2025). Economic Impact Study.
- Burlington Community Land Trust. (2025). 40-Year Review.
- Chenoweth, E. (2011). Why Civil Resistance Works.
- World Bank. (2025). Gini Coefficient Database.
Published: November 14, 2025
Category: Theory
Tags: Communism, Socialism, Worker Co-ops, Democratic Ownership, Capitalism, Political Economy, Structural Analysis
Take Action: Read the Full Plan | Start a Co-op | Join a Chapter