The Forgotten Vision of Market Socialism

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By Seth Ackerman, who is on the editorial board of Jacobin Magazine and a doctoral candidate in history at Cornell. Originally published at the Institute for New Economic Thinking website

A century ago this February the British Labour Party proclaimed its conversion to socialism. By committing itself in Clause IV of its 1918 constitution to the “common ownership of the means of production, distribution and exchange,” Labour, in the eyes of most observers, had announced its birth as a truly socialist party. But what exactly did the party hope to do with the means of production once it had socialized them? On this point answers were scarcer. The author of Clause IV, the Fabian leader Sidney Webb, spoke of a comprehensively planned economy in which the role of markets would be strictly minimized. Other party intellectuals, such as John Hobson and Barbara Wootten, advocated a more “liberal” socialism, with a mixture of plan and market.

But a strange lacuna loomed over the whole discussion, for as a historian of the party’s economic debates points out, “despite the near universal dedication to the rhetoric of ‘conscious and deliberate direction’ [of the economy, through planning] few had any specific ideas as to what exactly this implied for actual economic policy.” The prevailing view seems to have been that the precise content of a “planned economy,” though admittedly hazy at the moment, would come into focus gradually and through trial and error, in the course of constructing one. That is why even Western socialists distrustful of Bolshevik methods, like the Fabians, looked hopefully to the newly birthed Soviet experiment — expecting, if nothing else, a wealth of practical lessons.

Seventy years later, on the eve of the Soviet collapse, two Polish economists who had spent a lifetime studying that experiment compiled the lessons they drew from it and published them in a book titled From Marx to the Market. Włodzimierz Brus and Kazimierz Łaski had been leading figures in the fleeting golden age of postwar Polish economics, which thrived under the reform-minded Communist government from 1956 to 1968. After that year, when the regime swung to a posture of repressive conservatism and open antisemitism, the two academics, both Jewish, left the country and settled in the West. In the intervening period, they had stood at the center of reform debates, serving as senior policy advisers, publishing widely translated works on the economics of planning, and working closely with the Marxist-Keynesian economist Michal Kalecki, whose 1955 return to Poland they sponsored.

Few were better placed to offer a mature judgment on the seven decades of the Communist economic experiment. But they offered something else as well: a promising vision of a feasible socialism.

Under the classical command system inherited from the Stalin era, a single overriding objective was imposed on individual enterprises in the Eastern Bloc: “plan fulfillment.” What resulted from that objective was a series of symptomatic behaviors by firm managers that, while individually rational, yielded dysfunctional economic performance in the aggregate. For example, there was the so-called “minimax” strategy. Since shortfalls of input deliveries were by far the most common reason for firms’ failure to meet their output targets, enterprise managers during the ex ante bargaining that led to the formulation of the plan sought assiduously to minimize the output targets they were expected to deliver while maximizing the input allocations they claimed to need. More broadly, firms hoarded inputs to guard against the danger that they would run out and find themselves unable to hit their output targets. But while individually rational for managers, “minimax” behavior was collectively irrational for the system as a whole: since one firm’s output shipments were another firm’s input deliveries, pervasive input hoarding led to chronic output shortfalls that cascaded through the economy, manifesting in shortages and bottlenecks.

Then there was “priority adjustment,” which involved managers choosing, among the plan’s conflicting objectives (quantity, quality, variety, etc.), whichever ones could be most readily fulfilled. In practice, the favored priority was usually the output target — a pattern satirized in the old Soviet joke about the factory that was assigned to produce 10 tons of sewing needles and ended up delivering one gigantic needle. Product quality and variety in the planned economies were generally kept to minimum acceptable levels.

Finally, managers in the planned economies exhibited a marked aversion to change. Anything that heightened the uncertainty of input supply was unwelcome, and this is always the case with any sort of new product or process innovation. As the American economist Joseph Berliner found in his landmark study of Soviet innovation, new products and processes tend to require new and unfamiliar inputs, as well as larger volumes of them to accommodate the necessary tinkering and experimentation. Input suppliers often must be asked to make custom modifications to their products, a nuisance that can impede the suppliers’ ability to meet their own output targets. And new products often turn out to be uneconomical in their intended uses yet highly effective in other, unexpected uses; yet to allow this sort of serendipity to play out freely would completely unravel the coherence of the plan. All of this made systematic innovation impossible.

After Stalin’s death and the loosening of ideological controls, economics experienced a rebirth in the socialist countries — especially in Poland. The result was emergence of a cohort of reform-minded economists who bemoaned the command system’s overcentralization and urged a wider scope for the use of prices, profits, and other “market-like” metrics while preserving the principle of “socialist ownership” — that is, collective ownership of the means of production. Brus’s 1961 book, later published in English as The Market In A Socialist Economy, served as a sort of economic manifesto for the movement.

In the 1960s and 1970s, halting experiments in this direction were half-heartedly undertaken in a number of socialist economies, including the Soviet Union itself. But Hungary pushed this line of reform further than all the others. Under the New Economic Mechanism (NEM) inaugurated in 1968, Hungarian firms were still owned by the state but were no longer subject to formal output quotas or input allocations. In fact, there was no longer any national “plan” specifying physical production targets at all. Each firm was still attached to a state ministry, which had sole power to dissolve, merge, or reorganize it, and the ministry still determined the firm’s permitted “sphere of activity” (i.e. industrial sector or sub-sector). Ministries also wielded hiring, firing, and pay-setting power over firms’ top managers. But enterprises now had to acquire their inputs and sell their outputs on the open market, with the state, in principle, guiding the economy and capital accumulation solely through macroeconomic means — that is, through control of taxes, interest rates, subsidies, and the like. The command economy of the Stalin era was a thing of the past.

The results were a disappointment. But, not a complete disappointment: any foreign visitor to Hungary in the 1970s could see a marked improvement in the quality, and variety of consumer goods now that firms had to pay attention to cost and demand. Yet innovative activity was still nonexistent and shortages persisted. Hungarian economists were nearly unanimous in finding no qualitative change in the overall operation of the economy. What had happened instead was a shift from “direct” to “indirect” bureaucratic control, a situation in which “the firm’s manager watches the customer and the supplier with one eye and his superiors in the bureaucracy with the other eye,” as the eminent Hungarian economist Janos Kornai put it. Under the new dispensation, a sort of “financial tutelage” replaced physical planning, in the terms of economist David Granick. Enforced through special taxes and subsidies imposed on individual firms on a discretionary basis, along with informal quotas, licenses, price controls, and so on, this financial tutelage largely negated whatever autonomy firms were supposed to wield under the New Economic Mechanism.

By the time Brus and Łaski wrote their 1989 book, a consensus had formed among Hungarian economists that the root cause of this puzzling persistence of bureaucratic control was the absence of a capital market. The NEM had envisioned the use of market mechanisms to govern decisions about the use of existing production capacity in product markets. But decisions about quantitative or qualitative changes in production capacity, requiring the mobilization of factors of production, were still supposed to be a matter for national planning authorities to decide.

Yet it soon became clear that these two features of the system were in contradiction with each other: in the absence of a capital market, even decisions about the use of existing capacity in product markets could not sustainably be left to autonomous firms. As Brus and Łaski observed:

If a currently unsuccessful enterprise is prevented from attempting to raise capital in the market in order to restructure its operations, including branching out into other more promising fields, or cannot be taken over by a more dynamic firm which sees latent opportunities, strict application of the market rules of the game would actually lead to gross inefficiencies: not only would those enterprises unable to recover go out of business, but also those with good prospects although in temporary difficulties.

In effect, the state was forced to intervene. Non-intervention “would push an unduly large number of enterprises into bankruptcy,” the Hungarian economist Marion Tardos wrote at the time; and without a capital market, there would be no one to buy their assets once they had been liquidated.

Here is where Brus and Łaski made their most original contribution. At a time when the winds of history in Eastern Europe were blowing at gale force toward a full embrace of free-market capitalism, the two economists proposed an effort to place market socialism on firmer foundations, through the establishment of a socialist capital market mechanism. But how could Sidney Webb’s hallowed “common ownership” be reconciled with fragmentation of that ownership — a logical precondition for the buying and selling of financial and control rights over productive enterprises?

As Brus and Łaski put it, what was needed was “a firm separation between a number of roles hitherto performed by the socialist state in such close interconnection that they have come to be regarded as indivisible.” The role of the “owner state” must be clearly separated from the state’s role in levying taxes; in “setting business, health, safety and other standards”; in serving “as the center of macroeconomic policy”; and in dealing with all those societal problems “which cannot be defined in profit-and-loss terms (public goods, externalities).” All these roles were vital, Brus and Łaski believed; unlike many of their Eastern European colleagues in the 1980s they were no laissez-faire enthusiasts, and Łaski soon became a vehement critic of the IMF’s structural adjustment policies in Poland. But the legal basis of the state’s economic planning must be grounded in the state’s role as the democratic guarantor of the public will — not in its proprietorial interest in the productive infrastructure.

Although Brus and Łaski advanced these ideas as a path for reforming existing socialist economies, it is possible to imagine a transformation to such a system from the starting point of a modern capitalist economy. Suppose that a democratically constituted Common Fund were to carry out the compulsory purchase of all financial assets owned by households: stocks and bonds, but also mutual funds and other wealth instruments. Payment for the assets would be deposited in households’ bank accounts — with ownership of those banks now in the hands of the Common Fund itself. At the end of this process, all household financial wealth balances would represent the liabilities not of mutual fund companies or other private securities issuers, but of the Common Fund. Meanwhile, the firms that make up society’s means of production would now constitute the Fund’s assets, and could be allocated among newly constituted socialized investment funds. These funds would manage their portfolios on the Fund’s account, rather than the account of private owners. And newly formed private businesses could, in time, be sold into this socialized capital market (nudged along by incentives favoring such sales) to ensure that it remained the predominant owner in the economy.

Such a system would make it possible, as Sidney Webb wrote in Clause IV of the Labour Party constitution, “to secure for the workers by hand or by brain the full fruits of their industry and the most equitable distribution thereof” as well as “the best obtainable system of popular administration and control of each industry or service.” Workers, in other words, would be able to obtain a far greater degree of managerial control over the firms they work for.

And more than that would be possible. For example, a number of advantages would arise in the area of macroeconomic management. Household financial wealth would no longer fluctuate chaotically with financial markets; instead it would be a matter determined by macroeconomic policy, just as one component of it—the size of the monetary base—already is today. Under such a system of socialized finance, bank runs and their counterparts in the shadow banking system would no longer pose a threat, since subjective expectations of future returns would no longer automatically determine the exchangeable value of individually owned financial assets—that, again, would be a matter for public policy to decide. Meanwhile, any public guarantees extended to financial institutions in times of crisis would no longer pose moral hazard concerns, since those financial institutions would already be public institutions, their managers could be removed at will, and no private actors would have profited “on the way up.”

Above all, the commanding heights of the economy would no longer constitute an archipelago of private empires ruled by Bezoses, Zuckerbergs, Kochs, or Trumps. They would instead be, to coin a phrase, “Ours, not to slave in, but to master and to own.”

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  1. Webstir

    I forget where I came across my original conception of democratic socialism, but I continue to use it to explain the concept to those that have never drunk anything but the capitalist kool-aid (ie. 99% of Americans). Put simply: “Privatize the luxuries, socialize the necessities.”

    The rub is the debate between what’s a luxury and what’s a necessity. In this post’s context, yes, banking is definitely a necessity that should be run by the State. And by State in the American context I literally mean the States. Having state banks would completely moot the Fed and allow funding to be distributed to “necessity” sector more efficiently.

    It really is a simple way to jostle most American’s conception of democratic socialism. Most people I explain it to seem like they don’t want to agree, but they never have good counter arguments.

    1. JP

      And what about interstate commerce? The major function of the fed is interbank settlement not setting overnight rates. The fed is a political football and punching bag but no one really understands what it really does. It is not the enemy unless you are drinking the political koolaid. It was inacted to stabilize the monetary/banking system. You know, where the money comes from.

      So state banks would mean each state issues their own currency? And funding distributed to necessity efficiently. Who’s funding? what does that mean? and why would that be any more efficient?

      The problem with Socialism is, in part, the idea of ownership. The government doesn’t need to own it needs to make the rules.

      1. Webstir

        Please explain why a national network of these
        with a rotating “central” board, wouldn’t make wiser fiscal and monetary policy than the Fed?

        And, yes. I do actually know where money comes from. Contrary to popular belief it’s not what you’re calling the monetary/banking system. Ask yourself: Where does this monetary/banking system come from?

        Law. That’s where money comes from.

        1. JP

          Well no, the money comes from banking. Of course the law facilitates it and it is uniform across the US. The creation of money is an organic process as is the destruction. The flexibility of the money system is due to the fact that every bank in every town is involved in the efficient and competitive allocation of money. The law that saves failed banking practice is a threat to this efficient process.

          Thanks for the link. The Bank of ND doesn’t make fiscal policy. The original populist goals are laudable but any bank board can put those same ideals into practice. The Fed is not involved in political idealism (ideally). It does not make fiscal policy. Congress is supposed to make fiscal policy but because the Repubs wanted to destroy Obama they did nothing when they could borrow for nothing.

          Many of the programs that the BNC was first promoting are available through the Department of Agriculture but are being dismantled by the Trump administration as fast as possible.

          1. Webstir

            Well, there you go parroting the party “organic process” line. I could have set my watch to it. This is the trite answer trotted out by “economists” that know nothing about law. And who really know very little about money because they don’t know anything about law.

            Money is a subset of property. Which came first, law or money? Tell me: What is property?

            And the point of the State bank idea is that they could make fiscal policy because they are supported by the tax-payers and run by the politicians who the tax-payers elect. In short, they would be accountable to everyone, not just the elite.

            From 30,000 feet, everything is law. Change the law and you change the system. Change the law and you change the money. Let’s take bitcoin for example. Is it money? Tough question. But one thing is certainly clear — it’s not money as soon as a nation makes a LAW that says it isn’t money. How’s that for organic?

            These are things economics professors don’t tell you because they don’t know. You learn these things from law professors, at law school.

  2. economicator

    Reading this, I’m deeply puzzled by something (kudos to Seth Ackerman for putting it together, he is emerging as a majorly insightful voice on fundamental political economy questions):

    Isn’t what China has a form of market socialism (note, Im not interested in discussing the ‘democratic’ part here)??

    Can someone please offer a succinct view on that? I find the analysis of Soviet-bloc economies fascinating and have my own first-hand impressions, but speaking of reforming that system, what better example of China – and I have NEVER seen their system coherently explained from the perspective or market + state owned means of production.

    Why is the Chinese system so wildly successful and why weren’t “market socialist” reforms in Hungary for example not so successful — what accounts for the difference??

    1. PKMKII

      If the USSR was state capitalism (as in, the state is the capitalist owner), then modern China is more like state-managed capitalism. The state has stakes in most of the larger corporations, they’re much more hands-on with fiscal policy in order to shape the ebb and flow of the economy, but they have private owners and goods largely, especially for export, move on market principles.

    2. Temporarily Sane

      Chiba is still committed, at least officially, to preparing the country for a transformation to communism…eventually. The current system is, also officially, called “Socialism with Chinese characteristics.”

      Marx wrote that advanced capitalism is a necessary precursor to a communist society.The Leninist Bolshevik “vanguard” model which skipped capitalism altogether and forced a revolution that took Russia from feudalism to “communism” in one leap is not Marxist in the least. From what I understand* Marx thought communism had to emerge organically from capitalism after the latter succumbs to its built in contradictions and catapults the proletariat to power. However, until that time arrives capitalism is the best economic system there is , he argued, and it has to run its course before it can be superseded.

      China, unlike the Soviet Union, seems to have realized that Marxian communism is not achievable without an advanced capitalist economy underpinning it first and is working to achieve that goal.

      (Apparently Marx became so frustrated with revolutionaries (mis)using his words to foment premature revolutions causing him to declare “I am not a Marxist.”)

      Personally, I am skeptical of all utopian ideologies that promise heaven on earth and have my doubts that China will be able to pull this off successfully. Greed, corruption and an entrenched elite who consider these things virtuous are powerful adversaries. It is also possible, of course, that the CPC’s rhetoric about the glories of future communism is propagandistic BS to begin with but if they are sincere and can pull off a genuine transition to communism as envisioned by Marx…more power to them.

      *My knowledge of Marx and Marxist thought is still quite basic…please bear in mind while reading. Thx!

    3. Webstir

      It’s all here:

      And as I said above, it’s all law: money, property, economics (whatever that is). I use the wiki property law example because property law is the basis of just about everything we do. We define the world by the different ways we rationalize “mine.”

      As I see it, and have heard it explained before, it’s State Fascism. You get to own property, but only until the government tells you don’t anymore. “Public interest” is a property loophole you can drive a truck through. The “owners” of the means of production; however, very much resemble Russian, ahem, Captains of Industry with all of their attendance influence.

      1. eg

        “You get to own property, but only until the government tells you don’t own anymore.”

        Isn’t this true of every state? viz. eminent domain/expropriation

        1. Webstir

          After being fairly compensated, it’s true in the U.S. Not so much in the quasi-socialist countries.

  3. Oregoncharles

    ” At the end of this process, all household financial wealth balances would represent the liabilities not of mutual fund companies or other private securities issuers, but of the Common Fund. ”

    Let’s hope the Common Fund doesn’t turn out like CalPERS.

    1. JBird

      Reminds me of the PUC. Corruption in the California Public Utilities Commission (the PUC) has been ongoing since at least the 1970s and probably back to it’s creation in the 19th century. One of the reasons for that, just like with CalPERS, the news media has never covered it. More accurately, every few decades somebody does a large, extensive, detailed report/articles/series/book which gets some attention, disappears, and nothing happens. Well,’when a neighborhood explodes or something, then there’s a minute amount of reform.

  4. Paul Boisvert

    David Schweikart of Loyola University developed a few decades ago a model of “Market Socialism” that has much the same idea. Keep private markets for goods, but democratize capital markets, with socially controlled investment banks.

    He also discusses the third market, that for labor, and proposes to democratize that as well, by simply legally requiring all economic firms (or at least those that need public legal support, licenses, corporate status, etc., which is most of them) to function as cooperatives, “one worker one vote”. Income distribution within the enterprise would be democratically divided up out of profits (with “wages” no longer an expense before profits, but coming out of them.) There would be income differentials, but only by majority vote.

    His book After Capitalism is a great start on a fairly thoroughly imagined “realistic” model of this (not to say written in stone; he is well aware that the future is open…) To my mind the concept is feasible and covers most of what we want in a non-capitalist system–it’s the best model I’ve seen. In particular the “infinite growth” logic of capitalism is negated by definition: growing your company is only possible by hiring more people who will democratically vote for the same income share your current workers get. So the “private owner” income bonus from growing the owner’s firm, where he gets to keep all the extra profit, hence wishes to expand infinitely, is no longer existent. Growth for other, rational reasons could still be pursued, of course.

    A link to a recent brief discussion of the ideas is here:

  5. Oregoncharles

    This plan has the same root defect as the Soviet one: it centralizes and concentrates economic power. Anyone or agency that ultimately controls everyone’s livelihood will have dictatorial if not god-like power.

    On his Ecosophia site, JMG, aka the Archdruid, proposes an alternative that I would also call market socialism (he wouldn’t; he reserves “socialism” for government ownership and therefore authoritarian systems). He calls it syndicalism, an old term with a far more precise meaning: worker ownership and control of firms that then operate in a market system. One proviso is that the same requirements for a functional market apply: the units have to be relatively small, and information has to be more or less equally available. Capital markets would need to meet the same requirements. I would advocate size restrictions and disallowing mergers short of bankruptcy. They’re essentially never in the public interest.

    (Digression: note the term “functional” markets. Markets are never efficient, because they operate by trial and error, like evolution itself. They’re wasteful. The question is whether a given market is effective – that is, provides the necessary information flow between producers and ultimate users. If they aren’t, you wind up with MONOPOLY capitalism, with a lot of the disadvantages of the soviet system.)

    One challenge to any market system is natural monopolies, like utilities and railroads. There are at least three solutions: customer-owned co-ops, like both the phone and electric utilities just west of my town; public ownership, like the PUDs scattered around Oregon, or municipal water systems; and tightly-regulated private ownership. They should be economically fairly equivalent, assuming effective regulation (a big assumption). Co-ops are the most directly democratic. Oregon has all three co-existing, so should offer an illuminating natural experiment.

  6. xformbykr

    I had to good fortune to work for an employee-owned company
    for quite a few years. The founders started small, like Hewlett
    and Packard. The business was government contracting. The founders
    wanted the company to grow and so instituted formulas for the
    allocation of stock in accordance with employees’, including their
    own, contributions to growth. Contribution types spanned the
    normal contract work activities, along with business development.
    The stock price was not determined by the market, but by a valuation
    formula based upon profits and growth.
    It worked well for nearly 25 years. Eventually management
    turned over, and the employees voted to sell the company off.
    As an employee/owner, it was not a problem to put in a lot
    of extra effort in both business development and the contract work.
    The motivations for the effort were potential stock price increases
    and stock option awards based on contributions.
    As I look back on the experience I am more and more in awe of
    the founders. What entrepreneurs have shared ownership anymore?

    1. Oregoncharles

      Employee ownership should make for the best management, for the reasons you describe. Unlike shareholders, employees actually know what’s going on in the company. So it may well have been a smart and even self-interested strategy.

  7. Darius

    I believe it’s Richard Wolff who advocates employee ownership of the business as essential to building democratic socialism. Seems like a logical first step and a base for building power.

    1. Oregoncharles

      Him and Gar Alperovitz. I believe the US Green Party has signed on to that policy, but I really need to check and make sure.

      It’s something I’ve always thought was the best option.

      1. diptherio

        Wolff and Alperovitz are both academics that think worker-ownership is a good idea…but they are academics. Personally, I’ve gotten rather tired of listening to their respective schticks. If you really want to hear from people who are, you know, making the democratic economy we want, check out the Valley Alliance of Worker Co-ops, the Arizmendi Association (of bakeries), the US Federation of Worker Co-ops and the Democracy at Work Network. And the contributions of Wolff and Alperovitz pale in comparison to Dr. Jessica Gordon-Nembhard, imho. Her book, Collective Courage, about the history African-American cooperative economics, is more important, and more useful than anything Wolff or Gar have to say. One of the things that annoys me about those two is they tend to talk as if cooperative businesses are just a good idea, rather than an already existing movement. I’d much rather listen to Tim Huet, Jessica Gordon-Nembhard or Adam Trott talk about cooperatives from the inside, than listen to people who haven’t ever even been a member of a worker co-op. Just sayin’.

    2. Webstir

      It doesn’t even need to go that far, though. Labor just needs equal power on the Board of Directors.

  8. Olga

    I keep saying this – having first-hand experience – that pretty much no reform was really possible within the socialist bloc because it would have promptly been used by the west (i.e., the US) to undermine the entire project. This goes both for any political or economic reforms… Starting with policies of H. Truman, the US developed a very clever strategy of destroying the socialist bloc (no matter how long it took). Trust me, I lived it… If the early capitalism were faced with a similar implacable foe, it would have never gotten off its feet
    All sorts of reforms would have been possible… but the socialist bloc had this paranoia… and it was not unjustified.

    1. Mattski

      This is a point worth making again and again–we will never know what shape socialism might have taken if its enemies had not worked continuously to undermine and discredit. . .

    2. Oregoncharles

      I gather the Soviet Union started by forming worker co-ops – that’s what the “soviets” were, and quite likely what Marx meant by socialism. However they shut those down in favor of direct state control, possibly because they didn’t know how to co-ordinate them otherwise. Russia’s long history of authoritarian rule probably didn’t help, and neither did the hostility of the capitalist powers.

      1. Olga

        Other socialist countries had agricultural coops, and they were doing quite well. In at least one country, some coops ventured out into “associated production” (light industrial), and did well. But in the 70s, a sort of malaise drifted over the entire bloc. Ideally reforms would have been implemented to revive and renew, but for various reasons – it was not to be.

  9. John

    Fantastic article. Great to see an NC posting about Marxian economics!

    Because we’re so brainwashed on US Cold War history, we forget that by the end of the 80’s, while although the economy of the Soviet Union was in disarray and people wanted reform, very few wanted to overthrow the system. A referendum was held on whether the USSR should be preserved or not and 77.8% of the population said yes (that it should be preserved) with an 80% voter turnout. Later, Boris Yeltsin met in secret with the presidents of Belarus and Ukraine to sign a treaty enacting its dissolution so that their cronies could make tons of money in the new economy. In Poland it was the same–the general population wanted minor reforms to the system but in the end, the pressure of the IMF forced the hand of the new government.

    We only can wonder what would have happened if these countries would have been able to experiment with creating a system like what was described in this article.

  10. akaPaul LaFargue

    In many of these discussions of a “semi-post-capitalist” system the 800 lb gorilla is studiously ignored: the environmental factor/or climate change/or resource depletion/or extreme pollution. And along with the gorilla there’s the 800 lb robot just behind it. To address the gorilla will require public funding (no profit in building dikes unless the populace is “taxed” in some way. To address the robot: ditto. Now this “public” funding to address both massive occupants could theoretically be private: a la Brit Rail, private utilities in the US or as some comments mentioned, semi-public as in cooperatives or simply state (traditionally, public) funded.

    It would be good to see someone incorporate these alternatives into a “market socialist” scheme.

    I am afraid though that a more devious system may be afoot, at least regarding the gorilla. I live in an area where a regional authority, state created but not democratically controlled by local authorities in the region, is moving ahead to raise tolls on roads and bridges to finance work needed to deal with climate change. Some of their agenda has been implemented by fiat, e.g.tolls for fast lanes during rush hour, and some will need referendum. They can frame their cause as progressive (and of course dealing with climate change is obviously a progressive cause [snicker]) and since the bridge tolls only affect a minority of the population in the region (and though no publicly controlled entity will deal with the resultant funds) the regional authority could see the passage of their referendum and a multi-million dollar fund created overnight. No surprise that corporations fully support these faux “governance” procedures

    Dealing with the robot – by that I mean unemployment – is another order of complexity. Of course the gov’t could fund the dike building jobs, etc. and other so-called infrastructure, but after a few years – a decade? – of repairing the externalities the capitalists have “socialized” and after creating the public environment for further private exploitation, then what?

    Saudi Arabia, Kuwait and a few other oil-rich nations who practice “full employment” already see the end to that system. How will it differ here?

  11. Newton Finn

    A forgotten genius named Edward Bellamy had much of this figured out, in stunning detail, in his twin works of the late 19th Century: “Looking Backward” and “Equality.” Nothing since has even come close to describing the efficient egalitarian operation of a socialist economy and how we might peacefully transition into such a system from capitalism. For those unfamiliar with this profound and prescient thinker, Bellamy also predicted the radio, television, computers, airplanes, electric cars, credit cards, supply chains, environmental restoration, geothermal energy, and many other modern marvels, along with forecasting inevitable global plutocracy if the transition from capitalism to socialism did not occur. While his 19th Century vision needs some 21st Century revision, we ignore Bellamy at our peril.

  12. Dirk77

    For all her rant about free market capitalism being that utopia that humans have been waiting for, Ayn Rand did live through the Lenin years of Soviet communism. So I respect her views on that. There is some middle way somewhere. Not that that will be a utopia either, humans being what they are. Still. Anyways, thanks everyone for the article and comments.

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