A reader of this blog sent me the following message:
“Obviously, you are highly committed to socialism.
What, however, seems to be the perennial problem is that despite 150
years of socialist thought and practice, it’s not at all clear how it would
actually work. We all know what communism is, having seen it in the
Soviet Union, the Eastern European satellite states, China, etc. We all
know what social democracy as practiced in Western Europe is, i.e.,
capitalism with a political commitment to a fair degree of redistribution.
But what would a socialist economy and polity look like?
One hears vague phrases like “economic democracy” and “community control”
but never any reasonably precise description of how it would function.
As I look across my room at the new swivel chair I recently
purchased I see chrome, leather, plastic and thread brought together, as well
as the shipping and financial transactions that were associated with my
purchase and the underlying legal framework for such transactions. I
don’t want to fetishize the “miracle of the marketplace,” but well, the chair
is there, and I don’t see what the process would be under socialism that would
produce the same result.
Am I missing something? It doesn’t feel like I am
asking for too much from proponents of a political and economic system.”
It certainly does not seem like too much to ask, so instead
of replying by email I promised I would try to say something useful on this
blog. But I warned not to expect too much because I have nothing more than suggestions
to offer, certainly not a blueprint or even a coherent plan of action.
Let me begin by reminding everyone of how little Marx
himself had to say about the subject. As I have several times noted, he wrote
more than 5000 pages of detailed analysis of capitalism as he observed it,
principally in England, but scarcely as much as 100 pages about socialism.
Besides describing socialism as collective ownership of the means of
production, he said almost nothing about how a socialist economy and society
would function. There is a reason for that, of course. Marx believed, correctly
in my judgment, that fundamental changes in the organization of an economy come
about as a consequence not of command decisions by a government or ruling
clique but rather internally as a consequence of the decisions of large numbers
of individuals engaged in various aspects of that economy. We all recall his
striking metaphor – the new order developing in the womb of the old.
It is for this reason that every time I try to address this
important question I start by describing the major changes I see taking place
within contemporary capitalism rather than by following the practice of those
thinkers whom Marx described dismissively as Utopian Socialists.
Capitalism has changed dramatically in the more than century
and a half since Marx published volume one of Capital. Aside from the explosion
in productivity which makes our world as different from that of Marx as his
world was from that of Adam Smith, I can see at least four fundamental
developments internal to capitalism whose significance we must try to
understand before we can even begin to answer my reader’s pointed question.
First, the internationalization of capitalism that was
already underway in Marx’s day has now been brought virtually to completion, as
any of us here in the United States can tell simply by reading the tags on the
things we buy and discovering how many of them were made in China. This is not
simply a matter of imports and exports. The production process itself of
individual goods has been internationalized so that, for example, it is
impossible these days to purchase a car every part of which has been made in the
Second, as I have frequently observed, the ownership of
privately owned capital has been to an extraordinary extent divorced from day
to day management of its use in production, through the introduction of the
limited liability joint stock corporation, and the public sale and trading of
shares of stock on markets widely accessible to investors who have no
functional relationship to the private corporations of which they are in theory
Third, modern governments around the world play important
roles day – to – day in the private corporate economy, shaping it through
fiscal and monetary policies, saving it from its moments of self-destruction,
bending it to the service of politically determined ends, all without invading
or violating the fundamental private ownership of the means of production that
is the core fact about capitalism.
Fourth, the private ownership of capital results in a steady
irresistible accumulation of privately held wealth that dwarfs even the
enormous budgets of modern imperial states. Because this wealth is passed on
from generation to generation – because it is, as the French say, patrimonial –
certain individuals and families become incomprehensibly rich, rich as it used
to be said beyond the dreams of avarice.
This wealth is the financial representation of the cumulative product of
the labor of billions of men and women who, however, have no more control now
than they did in Marx’s day over how that product will be used.
But what of my readers new swivel chair? Will it still be
available in a socialist economy or will we just sit around on tree stumps
eating peaches and cream? More tomorrow.