Let us think about this in the way that Marx would, by trying to identify actually existing structural tendencies that are altering the character of capitalism. I can see three, one of which was already apparent in Marx’s day (and no, robots are not one of them.) The first is the internationalization of capitalism; the second is the almost complete divorce of management from ownership of capitalist enterprises (Jeff Bezos and Elon Musk to the contrary notwithstanding); and the third is the financialization of capital.
It is the second of these on which I wish to concentrate in this post. In the 19th century English capitalism at which Marx was looking, capitalist enterprises were small firms owned for the most part by those who managed them or at least directly oversaw them. By the early 20th century this was ceasing to be the case, as Adolph Berle and Gardner Means showed us in their classic book. Almost a century later the transformation is complete. Save in the rarest of cases, ownership of capital takes the form of shares of stock which are traded endlessly on markets completely divorced from direction and management of the firms whose legal ownership takes the form of those shares of stock. Leaving to one side the legalized and celebrated theft by which managers regularly pocket a portion of the profits of the firms they manage in the form of inflated salaries and benefits, what we see now is in some sense the ultimate perfection of capitalism: depersonalized capital buying production inputs, hiring labor, paying for commodity innovation and invention all almost completely divorced from any genuine connection to the people who own the capital and have a legal right to the profits it generates.
This certainly looks very much like the new order growing in the womb of the old, as Marx said of the development of capitalism in late feudal Europe.
If for the purposes of this discussion we consider socialism simply to be collective ownership of the means of production, then the divorce of ownership from management does very much seem to be a step in that direction. What could collective ownership of the means of production look like in the present stage of development of capitalism? Clearly not mom-and-pop stores, or sandals and candles collectives engaging in light industry, or even relatively large scale cooperatives. Those would all correspond to the shrubbery and ferns and little plants crouching in the shade below the gigantic trees of a rainforest. At the very least, collective ownership of the means of production must mean collective social ownership of the major accumulations of capital that we find in great multinational corporations. Is there anything at all that we can find in the world in which we live that looks as though it is a new order growing in the womb of capitalism?
Collective ownership, social ownership, surely must mean government ownership, ownership responsible by way of the political process to the people of the nation. Well, the roads on which we drive are socially owned, the schools at least through high school are socially owned, despite the efforts of Betsy DeVos, the entire healthcare system is on the way to being socially owned in the United States and is much further down that road elsewhere in the world, so that is a start. What about automobile production, light and heavy industry, trucking, mass distribution like that carried out by Walmart or Amazon?
The principal drawback to collective ownership of these means of production is not in their routine management – that can be handled as efficiently by a collectively owned enterprise as by a privately owned enterprise. But what of risk, innovation, the introduction of new techniques, new commodities, new conceptualizations of commodities? Could an economy in which the means of production are collectively owned be a vibrant, living, changing, growing, innovating economy or would it exhibit all those characteristics that we summarize dismissively and negatively as “bureaucratic?”
It is important to recall that these days it is rarely if ever the case that creative, imaginative, daring, innovative men and women actually risk their own capital on the enterprises they establish. What happens instead is that they borrow capital from venture capitalists who themselves do not innovate or imagine creatively but simply take a chance on those who claim to be doing so. The venture capitalists manage the accumulated capital placed in their hands by private individuals who have come into possession one way or another of large amounts of capital for which they have no other use.
Could these functions be performed by representatives of the people whose job it is to risk accumulations of socially owned capital on new ventures? If the answer is yes, then there is no reason to place the ownership of that capital in private hands and then suffer the ever worsening inequalities of income and wealth that are the inevitable consequences of private ownership of the means of production.
Marx described capitalism as the most revolutionary economic system ever to appear in history, but capitalism has become institutionalized. What the world needs now is not a revolution but rather more like something that Max Weber in a different context called the routinization of charisma.
I will have more to say about this tomorrow.