The systematic divorce of ownership from managerial control of productive resources, a process growing organically within capitalism as it develops, makes it possible for the first time to think seriously about collective ownership of the means of production. The first question that arises is: what about the surplus? Capitalism is ideally organized to extract a surplus from the annual production and consumption of commodities and to vest ownership of that surplus in private hands. But no matter who owns it, the question naturally arises, what to do with it.
Let us be clear: one portion of what might be considered the surplus is actually required by ongoing depreciation to replace productive inputs that are used up or worn out. That is not really surplus at all. One portion of the genuine surplus can be set aside to expand production in such a way as to meet the needs of a steadily expanding population. This is not required. The present generation could perfectly well choose to deprive its children and grandchildren of the comfortable life that the present generation enjoys, but let us suppose that parental sentiment and common decency lead the people of America, once they have taken possession of the means of production, to expand output to take account of a growing population. It is of course also possible for the present generation to deprive itself in order to expand production sufficiently to raise the standard of living of future generations. Since I have in many ways and for many years been critical of the work of John Rawls, this would be a good time to point out that he is the only moral philosopher of any note whom I have ever read who considers the choice of an appropriate rate of social savings to be an important question for social and political philosophy.
But there are other choices for the allocation of the social surplus, some of which modern capitalist societies have been making for some generations, even though it may not have been obvious that that was what was going on. First of all, childhood can be extended into young adulthood a before generation is required to go to work. Some of this delay is of course required for more complicated job preparation in the form of further schooling but some of it is simply a way of spending the social surplus. Secondly, a portion of the social surplus can be devoted to improving the lives of those who have become too old to work productively. Medicare and Social Security in the United States have transformed the life circumstances of the old. What was once a time of impoverished dependency on children and grandchildren has now become the golden years of retirement. A third possible allocation of a portion of the social surplus is its use to shorten the number of years that men and women are required to work before they retire. The United States by and large has not chosen to devote its social surplus to this but many countries in Europe have. And finally, of course, a portion of what is at any time considered surplus can be devoted to raising the standard of living of those who are productively employed, which after a while will come to be considered a necessary expenditure for subsistence, rather than a desirable but unnecessary allocation for luxury expenditures. (Those who have read my book on the economic theories of the classical economists and Marx will recall my citation of Ricardo’s observations about living conditions in Ireland.)
All of these choices, even the last courtesy of union organizing and strikes for higher wages, are decisions that have been made within existing capitalist economies, decisions made possible by the development of capitalism into its present form. This is what I mean by the new order growing in the womb of the old.
But none of this yet touches the central question, which is: how shall private ownership of the means of production give way to collective ownership of the means of production? Like Marx, whose practice is my model in these matters, I am more inclined to analyze the society and economy in which we live than to make idle speculations about how to make changes some time in the future, but I will end this post by suggesting some things that come to mind.
The best way to end patrimonial capitalism, it seems to me, is to do away with the patrimony. Confiscatory inheritance taxes that would require transferring to the state ownership of accumulations of capital in the hands of those who pass away would over time result in a massive transfer of ownership from private hands to the public. I am not talking about taxing away several hundred thousand dollars in corporate shares that have been accumulated by a grandfather or grandmother and which are left in a will to the children and grandchildren. I am talking about the tens and hundreds and thousands of millions of dollars of capital that the rich leave to their children. Sam Walton died superrich, thanks to the success of Walmart. There is no reason at all why Sam Walton’s children should inherit those shares.
Note, it would be destructively counterproductive to require the estate of the dead billionaire to attempt to sell the shares on the market so that the cash could be turned over to the government. That would simply have the effect of crashing the market so that a large portion of the wealth would evaporate. Rather, I am suggesting that the accumulated shares simply be turned over to public ownership. Over the course of a generation, a large portion of the capital accumulation in an economy like the United States would come to be owned by the state.
So many objections to this proposal spring to mind that I think I should wait until tomorrow to address them.