A few brief words of explanation before I continue my reflections. First of all, you must not make the mistake of thinking that I cannot be correct in attributing some feature or characteristic or arrangement to socialism simply because you can cite examples of that feature or characteristic or arrangement in some existing capitalist economy. Of course that will often be true! If socialism is going to grow in the womb of capitalism, as Marx puts it, then we will find many examples of just such anticipations. For example, to refer once again to my essay “The Future of Socialism,” we will find in capitalist corporations the development of decision-making that is guided by considerations that are essentially political rather than market-driven in their formal structure. It will certainly not be the case that all decisions are entirely market-driven until the moment when capitalism is replaced by socialism, at which point decisions will abruptly start to be political in their logical structure. That is just what Marx, with brilliant insight, taught us not to expect.
Yesterday, I wrote about overcoming certain elements of work alienation by integrating the decision-making and planning elements of the production process with the various stages of the carrying out of that process, so that workers who spend some of their time doing boring or repetitive or even distasteful things will accept those as part of a larger process they have helped to design and shape. Of course we would expect to find examples of just this sort of integration of the production process within capitalist economies. How could it be otherwise? I hope this point is clear, and will be kept in mind as I continue with my reflections.
Second, I try very hard to talk about this subject without using the jargon that has grown up in Marxian circles over the past century and a half. I believe very strongly that if what I am saying makes sense, then it ought to be possible for me to say it in plain English, with as many concrete examples as possible, and without the slightest whiff of sectarianism of the sort so common in both religious and economic debates. I have all my life been convinced that that is the right way to think and talk about these matters, and I shall not allow myself to be drawn into the ritual citation of proof texts from the Sacred Writings.
Today I want to say a few words about how the distribution of the social product will differ under socialism. The total social output of goods and services in an advanced capitalist economy is the collective product of all the hundreds of millions of men, women, and yes children who together constitute the labor force of the society, whether that labor force receives wages and salaries or not. Men or women making dinner in a household are contributing to that output, as are children looking after their younger brothers and sisters. We can talk another time about the complex technical problem of designing measures of the social output that capture all such efforts, but I think we can agree that they must be included in our thinking and calculations.
Some of what is produced in any cycle of production must be set aside as input into the next cycle of production. I don’t care a great deal whether we call this “capital” or refuse to use that term because it is somehow peculiar to the capitalist mode of production, but call it what you will, if we do not set it aside [if we eat our seed corn], then the society will very quickly go to hell in a handbasket. Furthermore, since tools and machines and buildings wear out, we must set aside an appropriate amount, in some form or other, as a depreciation fund, so that the tools, machines, and buildings can be replaced.
The society must also decide, collectively, whether it wishes to expand the scope of production – in short, the society must decide on an appropriate rate of growth. If the population is growing, a rate of growth equal to the growth of the population will be required in order to maintain the existing standard of living. In addition, changes in the demography of the population [a larger percentage of people past the age when they are called on to work productively, for example] will require corresponding changes in the productivity of those actually engaged in productive labor. Collective decisions about the length of the work day, work week, and work year will also shape the decisions about growth and productivity.
In a capitalist economy, everything else is divided into wages and privately appropriated profits, but in a socialist economy, the portion now appropriated by capital as profit will be part of the wages fund. That leaves undetermined how the wages fund will be divided up among the entire population [those who are engaged in productive labor and those who, for whatever reason, are not.] In short, how equal or unequal will wages be under socialism?
There are two well-known theoretical arguments designed to show that a simple equalization of the distribution of the social product would be so inefficient as to be irrational and indefensible. The first is the theory that wages in a market-driven economy will equal the marginal product of the worker being paid. I have had my say about this argument elsewhere, and will not deal with it again here.
The second is the theory that jobs requiring special training, skills, or effort will have to be paid a wage premium in order to encourage the ablest, best-suited candidates to offer themselves for employment. Society needs those with the most talent for brain surgery to undergo the lengthy and rigorous training required to prepare someone to cut open heads and mess with brains. The same is true for airline pilots, cellphone designers, philosophy professors, and the managers of large productive enterprises. Since the jobs are demanding and the preparation arduous, those with the requisite talents need to be motivated by higher than average wages to pursue such careers. If this process of recruitment and selection is successful, the total social product will be so much enlarged over what would result from random job assignments that there will actually be a good deal more in the way of goods and services to spread around and benefit everyone, even after the wage supplements have been paid. This, as I am sure you all know, is the central thesis of John Rawls’ famous and influential book, A Theory of Justice. Rawls, by the way, says that only as much in the way of a wage supplement is justified as is required to attract the especially talented. Not many readers, it is my impression, think very deeply about how profoundly radical this seemingly benign claim is [I am not entirely sure Rawls understood that himself, although he was very smart, so perhaps he did.]
I have always found Rawls’ argument rather odd, I must confess [the same argument, by the way, shows up in one form or another in a very great many serious works of economics and sociology.] If I may caricature the argument in a mean-spirited, but not really unfair, manner, it amounts to this:
Why should we pay philosophy professors considerably more than garbage collectors? Because it takes a very special talent and a great deal of work to prepare oneself to be a good philosophy professor. Now, all of us would rather spend our lives collecting garbage than writing philosophy and teaching philosophy to young men and women. Or at the very least, all of us are indifferent between spending our lives collecting garbage and spending our lives writing philosophy and teaching it to young men and women. But if we simply allot the preferred jobs of garbage collector by lot, leaving the unlucky losers to teach philosophy, we will get some very indifferent philosophy, to the general detriment of society. So some way must be found to induce those with a gift for philosophy to turn away from their first choice – garbage collection – and agree to go to graduate school. Hence the wage premium attached to the professorships of philosophy. These things are very difficult to titrate precisely, but if we arrange the wage premiums with care, the happiness and general job satisfaction of the garbage collectors will just about be matched by the lesser happiness and job satisfaction of the philosophy professors, as then topped up by what they can buy with their wage supplements.
I realize that this sounds bizarre, but it is really what Rawls’ theory implies, if you think about it. On the other hand, if you think, as I am inclined to, that those with a talent for philosophy really would very much prefer to spend their lives as professors of philosophy, then Rawls’ theory implies that they ought to be willing to pay for the privilege by taking a lower wage than that paid to garbage collectors or factory operatives or the women who make the beds and clean the rooms in hotels. If that strikes you as absurd, you might want to try to spell out exactly why.