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Monday, August 21, 2017


Inasmuch as I have absolutely nothing at all to say on the matter of Roman Polanski, which seems to be of the very greatest concern to the readers of this blog, I thought I would spend some time, while awaiting the eclipse, musing about what a democratic socialist society might look like.  This is not exactly a matter of pressing concern, needless to say, but it interests me, so I shall spend a few moments on it.  If anyone wants to follow me down this rabbit hole into Wonderland, I would suggest taking the time to read my essay, “The Future of Socialism,” archived at

I do not have settled views on this matter.  Neither did Marx, of course.  He was dismissive and scornful of the various utopian socialist fantasies floated by his contemporaries, believing, as I understand him, that just as capitalism could not have been foreseen in its details by even the most prescient thinker of the feudal era, so we who are thoroughly entangled in capitalist society can only speculate on what socialism would be, grounding our speculations in a rigorous analysis of the reality of capitalism.  Consider these remarks therefore in the nature of an old man’s schwärmerai.  [Oh, by the bye, even a true democratic socialist state would not be de jure legitimate, as I defined that term in In Defense of Anarchism.  Socialism cannot overcome the contradiction between the autonomy of the individual and the authority claims of the state.  But that is a subject for another day.]

First, some definitions.  By “socialism” I mean an advanced industrial or post-industrial economy and society in which there is collective ownership, management, and control of the principal means of production.  Understood in that way, there are now no socialist societies nor have there ever been any.  By socialism, I do not mean a capitalist economy with a strong safety net and a low Gini coefficient.  Nor do I mean a community of poets and novelists doing a little kitchen garden farming and animal husbandry, nor even a big kibbutz, or a society of kibbutzim.

By a democratic socialist society, I mean a society in which the fundamental decisions about the rate of savings [and consequent economic growth rate], the structure of wages and salaries, and large scale capital goods projects rest with the people as a whole and, in some manner, with their elected representatives.  I am not talking about worker control of individual factories or offices, or local agricultural, industrial, and service collectives, admirable as those undoubtedly are.

I am assuming that inherited wealth [not the family homestead] is prohibited, and I am agnostic about whether an individual, within his or her lifetime, will be permitted to accumulate considerable wealth.  [If I may make a parenthetical nod to a well-known book by my old friend now sadly departed, Robert Nozick, if sports fans want to shower great wealth on LeBron James, I don’t care, so long as he doesn’t get to invest it in shares of or leave it to his kids.]

The single most important collective decision that a democratic socialist nation would make is the social rate of savings:  the proportion of the social product to be reinvested in economic growth, as opposed to being consumed unproductively by the members of society for their pleasure, amusement, or edification.  [I have at times been quite critical of the work of John Rawls, so I ought here to note that he seems to be the only major political theorist, other than Marx himself, who has understood the importance of this social decision.]  In a capitalist economy, the social rate of savings is not the object of anyone’s decision, but rather is the consequence of the decisions of countless capitalists or corporate managers, indirectly influenced nowadays by governmental decisions about tax rates or interest levels.  In some modern states, most notably China, which seems to have in effect a state capitalist economy, a very large social rate of savings has been deliberately chosen, sacrificing the consumption of the present to the comfort of the future.  In a state with an expanding or aging population [or both], an appropriate social rate of savings is essential simply to maintain current consumption levels.  Note, by the way, that this is entirely separate from the need to set aside some portion of current production for depreciation of the capital stock.

The second important collective decision is wage rates, assuming [as I do] that a considerable share of individual consumption will be paid for out of pocket rather than, as in the case of health care and education, by social spending.  It goes without saying that the income pyramid should be very much flatter than at present, even in those European nations with a well-funded social safety net.  Would the present situation prevail, in which, to put it in shorthand slang terms, suits make significantly more than shirts?  The universal justification among sociologists and economists for this state of affairs is that higher wages are required to attract into socially important jobs those with the special talents or education for them, but I am deeply skeptical of this familiar rationale.  The unstated assumption is that we would all rather be day laborers or garbage collectors, but could be wooed away from those jobs into the offices of doctors, lawyers, or professors by sufficiently lavish salaries.  Absent those salaries, it is presumed, not many would choose actually to teach classes or see patients or, for that matter, manage factories rather than working on the assembly line or cleaning toilets.  Maybe so, but I doubt it.

Perhaps the most important question is this:  with the really important decisions being decided in the public square rather than out of sight in boardrooms and corporate getaways, how would we keep those elected to public office on the straight and narrow, so that they do not use their power, as corporate managers now do, to rob us all blind?  I am absolutely convinced that some of them will try.  I have no expectation that socialism will somehow turn ordinary human beings into paragons of Socialist Man or Woman.  [I have lived through the liberation of South Africa, the glory days of Mandela, and the decline and corruption of the ANC, so I am without illusions.]

The greatest challenge facing advanced capitalism is the progressive substitution of mechanical or robotic production for human production, and the creation thereby of a larger and larger segment of the population whose labor is not required by capitalism.  That, I believe, is a challenge that socialism is uniquely prepared to face.  Properly managed, it can mean the steady diminution in necessary unpleasant labor and its distribution across the entire population, rather than its concentration in one disadvantaged segment of the population.

Well, the eclipse approaches.  I shall be curious to see how the birds respond.


TheDudeDiogenes said...

Prof., your paragraph about wage rates is marvelous - clear, concise and devastating to the clearly absurd assumption about how we would all prefer to labor, absent wage inducements.

howard b said...

So,there's no capitalism- but is there no stock market, or does everybody have an equal share? Is there money? Are there art museums? Sports teams? Small businesses?

s. wallerstein said...

Given that you don't believe that socialism will produce the transformation of people into Socialist Man and Woman (I don't believe that either), a revolution in human nature such as imagined Che Guevara, what are the arguments in favor of socialism against what you call a capitalist economy with an extensive safety net and a low Gini coefficient, say, an improved version of Norway?

Norway works, it's a functioning prosperous society, as equal as they get so far. Doesn't that speak in favor of what we might call the "Norwegian model" against a model (socialism), which may well have negative side-effects that we cannot yet imagine, since it's never been put into practice. I don't consider the Soviet Union to have been really socialist in the way you use the word nor Cuba, etc.

Tom Cathcart said...

Bob, we know you dislike Hegel, but how would you critique his idea that what makes the world go around is "interest"? Granted that the self-interest of capitalists creates monstrous inequalities and disequilibrium, it's still hard for me to believe that the rest of us can collectively marshall the energy, let alone the consensus-building, needed to drive the economy successfully. Why would economic democracy lead to any less mediocre results than political democracy? Why would majorities stop exploiting minorities? I'm not arguing for capitalism. I'd love to believe that socialism is a viable alternative. I'm with Marxists that the benign invisible hand is baloney. I'm just cynical that the visible hand of democracy would be better. Think: faculty senates. (S wallerstein: like you, I'd settle for Norway, although apparently their success is due in some significant part to the discovery of oil in the North Sea. Sweden maybe?)

Unknown said...

I’m a Bernie Sanders socialist, which essentially means a New Deal liberal--private ownership of the means of production, a strong social safety net, and a low Gini co-efficient. I don’t think we should discard it, simply because of its many flaws, without knowing what will replace it. As you noted, Marx essentially said, “Who knows? It has to be better.” But just saying “socialism” without explaining how it would work is not enough.

Take, for example, technological innovation. Under the present system, Schumpeter’s “creative destruction” is the vehicle for this kind of advance. But while it may be “creative,” it is also “destruction” and many suffer from it. Their pain isn’t lessened by the fact that many more may benefit greatly. Digital photography and smart phones are wonderful--but a lot of people lost their jobs at Kodak and at countless photo shops across the country because of them.

If the government owned the photographic film producers, those working in the industry and their representatives in Congress would be loath to support the expenditure of public funds to finance a technology that would replace them. The same would be true of those working in government. Once something is in place and someone is benefiting from it, eliminating it is almost impossible: military bases and weapons systems that he Pentagon doesn’t even want, money-losing post offices and money-losing Amtrak lines rail lines.

Consider the jobs lost to computers--more every day, from industrial robots to super market self-checkout machines. But without computers, this blog--and much more that we also value--wouldn’t exist. Who would want to go back to those days?

Jerry Brown said...

Forget the birds, how did you respond? I am hoping you didn't get all wild-eyed running around crazy thinking the white nationalists were right but just figured that it was time to go to sleep instead... Likewise, I am going to blame the whole Polanski discussion on the impending eclipse, which caused S Wallerstein to test the limits of my devotion to free speech and expression. I really had no idea how powerful an effect a celestial event that isn't even observable in South America can have. Hopefully, you are safe and sleeping though.

I myself, was working outside today. Here in Connecticut, it was a bit of a disappointment to me. The sun got probably half obscured but it was still brighter than a cloudy day. Except that I am happy to point out that not all news is fake news and they were right that you really shouldn't look at the sun even for only a second if you want to see anything in the next five minutes...

You wrote a lot about economics in this post, which I like to imagine I know something about and desperately want to critique you on. But after two reads I agree with most everything you say, so it becomes difficult. But don't worry, I will find an argument somewhere.

Jerry Brown said...

Ok, I have found my critique but it doesn't differ all that much from what you really mean, I think. First of all, a nation cannot 'save' for the future as a nation unless it is either stockpiling consumables or, as in the case of Norway, hoping that other countries' production will be shared. Norway might get by on that because it is so small. The US can't. What a large nation can do is 'Invest' in the future by way of infrastructure built in the present, by educating it's young, and doing everything that might make it's future population more productive. Which includes automation and robots and stuff. And by preserving some of it's natural resources and environment. While there is an accounting identity under certain circumstances that savings will equal investment, the causation actually runs from investment to savings almost always.

Automation and robot type stuff could definitely cause some problems in the future, depending how we react to it, but we are not there yet. Productivity growth has been pathetic over the last ten years, which is the reason we aren't there yet. I will find some Dean Baker post to link to later where he explains this very well. Regardless of how good machines get in the future, there are innumerable jobs that people can do that would make the world a better place to live in. It is true that many of these jobs would not be offered by the private sector, because they might not be profitable, but that does not mean they should not be offered through the public sector through a Job Guarantee. I will put a link to Bill Mitchell who teaches MMT, the school of economics that I think most accurately describes things. Here's a good one that describes the Job Guarantee and discusses Kalecki who if he wasn't a socialist, has to be the next thing over.

F Lengyel said...

Fascinating that where economic incentives are concerned, there are two competing claims in the air: one for employees and the opposite claim for owners and managers. For employees there is the claim that economic incentives backfire. But a typical argument against socialism is that it does not reward effort. A game theory argument where workers at each level productivity can either shirk or work asserts that the reward for working must increase at geometrically as a function of productivity. After a talk on this result at a game theory seminar, the émigrés from former communist countries took this result as evidence of the superiority of capitalism over socialism. But at the time there were (and still are) pop-psychology claims about the inadequacy of economic incentives in the workplace. Which is it? Is there one claim for employees and another one for executives and owners? Perhaps Marx would have called this one of the "contradictions" of capitalism.

Matt said...

People interested in this topic can do a lot worse than reading Alec Nove's _The Economics of Feasible Socialism_ (or the 2nd edition, if you want.) Nove probably took 'actually existing' socialism more seriously than many here would want, but that's necessary, I think, if you want to deal with the hard issues of how an economy works when capitalist aspects are stripped away. You don't have to take him as gospel, of course, but it's an important starting point from a committed socialist who studied the Eastern European system carefully and tried to understand where it went right and wrong.

The philosopher Joseph Heath also has some useful discussion in his recent book, _Morality, Competition, and the Firm_, about the problems faced by publicly managed industry in several different companies.

On a different note, more directly to Bob, did you address, in your Anarchism book, Kant's argument that in fact freedom and autonomy are _only_ possible in the state, as developed in the Metaphysics of Morals? I'll admit that I have found it (especially in the version developed by people like Paul Guyer and Arthur Ripstein) pretty convincing.

J. Fleming said...

A former colleague of yours at Univ. of Mass. Amherst, Prof. Richard Wolff, is still discussing these ideas.

LFC said...

from the OP:

The universal justification among sociologists and economists for this state of affairs is that higher wages are required to attract into socially important jobs those with the special talents or education for them, but I am deeply skeptical of this familiar rationale. The unstated assumption is that we would all rather be day laborers or garbage collectors, but could be wooed away from those jobs into the offices of doctors, lawyers, or professors by sufficiently lavish salaries. Absent those salaries, it is presumed, not many would choose actually to teach classes or see patients or, for that matter, manage factories rather than working on the assembly line or cleaning toilets. Maybe so, but I doubt it.

I share Prof Wolff's view on the desirability of a more equal (or less unequal) dist. of wealth/income, but I think part of the justification for higher wages for jobs that require long periods of training/education is to compensate for the opportunity costs of that training. Some people want to be neurosurgeons, say, and are going to pursue that course irrespective of any financial considerations. Others may be trying to decide betw. becoming a specialized surgeon and some other occupation that doesn't require as long a training period. The theory, valid or otherwise, is that one way to encourage the former choice, assuming the society wants to encourage it, is to compensate for the long training period during which income is not esp. high by holding out the prospect of relatively high income once the person has finished the period of formal training. Perhaps that's not a particularly good example, and the justification itself may be unpersuasive, but it's a little different from "we would all rather be day laborers or garbage collectors, but could be wooed away from those jobs into the offices of doctors, lawyers, or professors by sufficiently lavish salaries."

Anyway, the whole argument breaks down when it comes to, say, executive compensation. The only supposed 'reason' I can discern for top executives of U.S.-based or some other multinational companies making tens of millions of dollars a year is that their peers do, so it becomes a closed-circuit-loop justification wherein
"the CEO of company X must make 50 million a year because the CEO of comparable company Y is making roughly that," which makes no sense -- except, I suppose, to the boards of directors that set executive compensation.

s. wallerstein said...

In some capitalist societies, doctors do not earn so much money as they do in the U.S., and yet people still compete to get into medical school because of the prestige and of the challenge.

In Chile many doctors work for the public health service for a salary and they are basically middle class or lower upper middle class in economic terms. The wife of a friend is a top cancer specialist, entirely dedicated to her work in the public health service, and they live fairly modestly. She seems to be motivated by a commitment to public service and by the intellectual challenge of dealing with cancer.

LFC said...

S. Wallerstein,

Yes, I think these kinds of motives apply in many cases of people going to medical school, in whatever national context.

I didn't say the justification I mentioned is persuasive or correct, simply that it's a slightly different justification than the one laid out in the OP.

s. wallerstein said...


I understand.

By the way, getting into the university in Chile is a mechanical process based on standardized test scores and grade point averages, and getting in medical school requires the highest test scores and grade point averages.

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