For Socialism

I have elsewhere written about the political ideals of the Christian message, Jesus having proclaimed something far more radical than anything Karl Marx or Friedrich Engels ever did.  I have suggested why most Christians should feel utterly ashamed when they read, for example the Gospel of Matthew, the plain meaning of which is socialism, or some close equivalent in an radically egalitarian social revolution.  Rather unlike Christians today who have a strange obsession with sex and close to little regard for poverty and the poor, Jesus had precious little to say about sex, and a good lot to say about poverty, about love, about justice.  It is clear that the ethical ideals of the Kingdom of God are today most lucidly articulated, hence carried forth, by democratic socialists.  Therefore, in the essay which follows, I have endeavored to clarify the concept, to argue for it, and to a make a case for our own minimal possibilities as a society.

In May 1949, Monthly Review, the leading socialist journal, published an article in its inaugural issue entitled “Why Socialism?” written by a leading intellectual who went on in this article to write, “I am convinced there is only one way to eliminate” what he called the “grave evils” of capitalism, “namely through the establishment of a socialist economy.”^[1]  His name was Albert Einstein.  He was a socialist, indeed but one among a host of those today we consider to be hopelessly quixotic and starry-eyed, among them people like Bertrand Russell, Helen Keller, the Dalai Lama, George Orwell, even Martin Luther King, who suggested, like Einstein, a sentiment which should be obvious to anyone who thinks about it for about two seconds, namely that “something is wrong with capitalism,” and that “America must move toward a democratic socialism.”

It is difficult for us today to imagine a time when the leading intellectuals of the day could have identified as socialists without people having believed they were from Mars.  Telling someone you are a socialist today is rather like telling them you enjoy punching puppies in the face.  Our own political and intellectual milieu is very far from this.  We inwardly believe what Margaret Thatcher outwardly expressed: “there is no alternative” (to capitalism).  This doctrine, TINA for short, was expressed more theoretically, if less eloquently, by the renowned political scientist Francis Fukuyama, whose preferred and very modest term for this belief was “The End of History,” referring to notion that after the fall of the Berlin Wall, we had entered a new pragmatic, post-ideological epoch, one in which every grand narrative (Science, Reason, Progress, Socialism) had come to an end — every grand narrative except, of course, capitalism which was now the only game in town.^[2]

Our faith in capitalism is so deeply maintained that even what calls itself the “left” today seems to have lost all realistic hope for anything beyond tinkering around the edges of this monolithic historical necessity, working within the capitalist system to make it somewhat less murderous and monstrous, to give it a human face.  For leftists today, the economic theories of Keynes delineate what the great social critic Michael Harrington called “the left wing of the possible,” and a form of what the political theorist Roberto Unger calls “mummified Keynesianism” is treated by those on the left end of the political spectrum as if it were the summum bonum of world history.  The last vestiges of socialism within the political left seem to have lost all of their credence; and if just yesterday they could inflame the dreams and aspirations of millions, today they are almost entirely forgotten, the flame of the socialist ideal now largely extinguished.  If just yesterday the heroes of the “left” were radical socialists and small-d democrats like Martin Luther King, Angela Davis, Michel Foucault, Noam Chomsky, and Michael Harrington, then today they are the big-D Democrats — Barack Obama, Elizabeth Warren, Rachel Maddow, and Nancy Pelosi.  It is a curious situation when someone like Elizabeth Warren represents the left end of the political spectrum, which if you happen to be left of, you are called a “conspiracy theorist” for ascribing elementary rationality to actors in a system which practically determines the outcomes.  It is a curious situation when the best the left can do is applaud President Obama for proposing to raise the minimum wage to a level that is less in real terms than it was 50 years ago — and then call this progress.  It is a curious situation when the term “left” has become synonymous with the term “liberal,” when liberalism is the leftmost horizon of the political spectrum.

The traditional left has usually had as its political base socialists, communists, social democrats, and labor unions.  But the United States, practically alone in the developed world, has had no historic labor-based party.  At its peak, it had 34% unionization; now it is closer to 11%.  Owing in part to this, the political spectrum of the United States is far to the right of the developed world, and the government’s policies are far to the right of the population of the developed world, including its own, which prefers to decrease military spending and increase social spending on things like health and education — even despite the influence of media and elite opinion, which also diverges hugely from public opinion.

What is the difference between “left” and “liberal”?  It is the difference between early and late Martin Luther King, when he writes, for instance, the following: “For years, I labored with the idea of reforming the existing institutions of society, a little change here, a little change there.  Now I feel quite differently.  I think you’ve got to have a reconstruction of the entire society, a revolution of values.”^[3] The difference between a liberal and a leftist is the difference between Keynes and Marx: the aim of the liberal is to improve and humanize the socio-economic system while keeping it fundamentally intact; the aim of the leftist is to change it.  It has been quipped that the difference between a liberal and a socialist is that when a liberal walks past a homeless man on the side of the road, he says to himself, “the system is not working,” while the socialist says, “the system is working perfectly.”  It is doing exactly what is it is supposed to do: malfunction.  It is only working as a system when it is not working for human beings.

This, then, is the fundamental contention of the leftist: capitalism does not work, and it must be changed.  This conclusion is not so much reached by prolonged analysis as it is by opening one’s eyes and thinking about it for two minutes.  It generates the most perverted and grotesque distribution of wealth imaginable.  A recent Oxfam report, for example, found that the world’s 85 richest people control as much wealth as half of the total population of the world.^[4]  It is wrecking the environment and threatening the survival of the species.  It creates a situation in which “the privileged few gorge themselves with superfluities, while the starving multitude are in want of the bare necessities of life,”^[5] to quote Rousseau, who observed this in the world 250 years ago.  But what he called “plainly contrary to the law of nature,”^[6] modern economics calls “efficient”^[7] — meaning the exact opposite.  As Chomsky suggests, “there’s a ton of work to be done in the world — everywhere you look there’s work that ought to be done.  And the people who don’t have work would be delighted to do it.  So what you’ve got is a huge number of idle hands, a vast amount of work that ought to be done, and an economic system that is incapable of putting those two things together.”^[8]  Or consider the fact that poverty and unemployment still exist in the richest nation in the history of the world when there is no economic reason for it, period.  But are we to blame the system itself?  The experts, unsurprisingly, say no.  For instance, Larry Summers, a prominent economist at Harvard, writes,  “I believe the evidence overwhelmingly supports” the proposition that the problems of capitalism (namely employment and living standards) “can be addressed with proper fiscal and monetary policies …  I suspect that if and when macroeconomic policies are appropriately adjusted, much of the contemporary concern will fade away.”^[9]  But we can only put the Keynesian bandaid on the capitalist cancer for so long, and the very decision to do so only begs the question: why are compensatory Keynesian fiscal policies necessary in the first place?  What does that tell us about capitalism?  Even if Summers is right (and I don’t think he is) that these compensatory measure are enough to humanize capitalism, this only implies that capitalism has to be humanized in the first place.  And if this is the case, then compensatory measures are not sufficient to the situation, much less to the deep desires of ordinary human beings who naturally aspire toward richer, freer lives.  It is not enough to redress symptomatic injustices without addressing their institutional and structural causes, all of which the whole profession of modern economics takes completely for granted.

MODERN ECONOMICS: THE FAILURE OF A THEORETICAL ACCOUNT

Modern economics has been unable to account for the world.  It has served principally to idealize, reify, and thereby legitimize the system of private property.  As the economist Richard Wolff suggests, “The job of economics, to be blunt but honest, is to rationalize, justify, and celebrate the system. To develop abstract theories of how economics works to make it all like it’s a stable, equilibrium that meets people’s needs in an optimal way.”^[10]  As the political philosopher Roberto Unger suggests, within the discipline of economics, “rationalization rules: the explanation of the workings of contemporary society becomes a vindication of the superiority or necessity of the arrangements now established in the rich countries.”^[11]  Modern economics is unaware of its own most basic assumptions.  It strains at gnats while it swallows camels.  The camel it swallows is the institution of private property and the particular historical, therefore contingent, social relations which prestructure it: the antagonism between worker and owner, to which modern economics adds a patina of scientific legitimacy.  In this way, economics proceeds in an ahistorical manner, reifying and hypostatizing from its historical and contingent social relations economic patterns which only arise therefrom and which then falsely assume the character of a natural law — falsely because these social relations can be changed.  As Marx writes, “Political economy proceeds from the fact of private property, but it does not explain it to us.”^[12]  Political economy assumes the particular contingent social configuration of private property and proceeds from this fact; it never examines this.  The discipline of political economy then places a legitimizing gloss over this by allowing debate only within the confines of these assumptions.  The particular form which this legitimizing gloss takes today is mathematical econometrics which, however complicated, still proceeds from (and never explains) the same rudimentary assumptions.  The profession of economics strains at econometric gnats while it swallows the camel of private property.  What the discipline of economics in effect does is in effect what the media do — as Chomsky writes, “to take the set of assumptions which express the basic assumptions” of particular social order (private property), “and then present a range of debate within that framework — so the debate only enhances the strength of the assumptions …”^[13]

This is demonstrably true.  Debate within this framework of assumptions is allowed, even encouraged.  That is why the progressive Keynesianism earlier expressed by Summers is permissible: it does not challenge the sovereignty of private property.  But debate outside of these limits is scarcely tolerated.  That is why the progressive Keynesianism expressed by Summers is the outward limit of this framework.  To challenge these basic assumptions is to court professional ex-communication.  According to Wolff, who is a tenured economist at a prominent economics department, within academic economics departments, to assume a set of beliefs beyond those expressed within the acceptable range of opinion is “dangerous to your career. If you went in that direction, you would cut off your chances of getting a university position or being promoted and getting your works published in journals and books, the things that academics need to do for their jobs.”  And for Wolff, this is indicative of the general lack of substantive debate about the systematic problems of capitalism, where to raise such questions is understood by mainstream economists to be unacceptable: “For 50 years, when [the question of] capitalism is raised, you have two allowable responses: celebration, cheerleading. Okay, that’s very nice. But that means you have freed that system from all criticism, from all real debate.”^[14]  There is a very simple way to test their validity: simply compare the amount and kind of references to theorists who operate within the same framework of assumptions (Adam Smith, David Ricardo, J.M. Keynes, Paul Samuelson, Milton Friedman, etc.) to those who do not (Karl Marx, Oskar Lange, Friedrich List, Paul Sweezy, Robert Dahl, David Miller, Richard Wolff, etc.) in standard economics courses.  Take for example the basic introductory economics course at Harvard, which, because it is taught by N. Gregory Mankiw, who wrote the standard introductory textbook (Principles of Economics) we can take to be more or less indicative of the field.  In the course reading list, he includes a host of opinion, beginning with Alan Greenspan, working through Alan Roth, Arthur Okun, Julio Jorge Elias, and a whole range of others — exactly zero percent of whom fall outside of the basic framework of assumptions which modern economics makes.  On the faculty of the economics department at Harvard, there is one critic of capitalism.^[15]  In this way, the whole discipline and profession of modern economics puts a patina of legitimacy on a particular, contingent form of social relations.  As Unger writes, “We are taught to sing in our chains. The silent partnership of these rationalizing, humanizing, and escapist tendencies in university culture leaves the field open for forms of practical political thinking that are as deficient in insight as they are bereft of hope.”^[16]

THE SYSTEM OF PRIVATE PROPERTY

The particular form of social relations which modern economics reifies is private property.  The whole practice of the discipline may be summarized by re-quoting Marx: “Political economy proceeds from the fact of private property, but it does not explain it to us.”^[17]By “private property,” Marx means the private, as opposed to social, ownership of capital by a handful of wealthy elites.  As he and Engels make explicit in the Manifesto, he does not mean all forms of privately-owned property:

In this sense, the theory of Communism may be summed up in the single sentence: Abolition of private property.  We communists have been reproached with the desire of abolishing the right of personally acquiring property as the fruit of a man’s own labour, which property is alleged to be the groundwork of all personal freedom, activity and independence.  Hard-won, self-acquired, self-earned property!  Do you mean the property of the petty artisan and of the small peasant, a form of property that preceded the bourgeois form?  There is no need to abolish that; the development of industry has to a great extent already destroyed it, and is still destroying it daily.^[18] (My emphasis)

By “abolition of private property,” Marx meant the democratization of capital, its transformation from private ownership by a few absentee shareholders to social ownership by the workers themselves, in which “the social character of the property that is changed,” when it “loses its class-character.”^[19]  This, private property, capital, is what modern economics takes for granted, hypostatizes, reifies.  It is completely taken for granted, and not only by economists, but by people in general, that capitalism is compatible with democracy.  That, I assume, is why people always talk about “capitalism and democracy.”  This is a blatant contradiction: “capitalism” and “democracy” are contradictions in terms.  Capital is by its very nature — this is the social nature which Marx is writing about — is inherently antidemocratic and autocratic.  Again, one might think about this for two minutes: capitalism is a form of socio-economic organization in which all of the major decisions of a firm are made by a board of directors constituted of around twenty wealthy elites, selected by about twenty other wealthy elites called shareholders while the vast majority, the workers, have virtually no say in the operation.  All of the productive capital is owned by a small minority of the population, who are then able to exploit the vast majority, which owns nothing but its labor power, by forcing it to rent out itself to the highest bidder while it competes among itself or else die of starvation while the “masters, being fewer in number, can combine much more easily,” according to Adam Smith, who goes on to suggest that “whoever imagines … that masters rarely combine, is as ignorant of the world as of the subject.  Masters are always and every where in a sort of tacit, but constant and uniform combination, not to raise the wages of labour …”^[20]  That is why the 19th century socialist Proudhon declared that private property is theft.

Such a condition, one will have noticed, is not democratic; it is plutocratic and autocratic, and its political equivalent is the totalitarian state.  It also lacks the basic premise of a just social contract which is that those who engage in the contract are relatively free and equal, which Smith described as a situation of “perfect liberty, and where every man [is] perfectly free both to chuse what occupation he thought proper, and to change it as often as he thought proper,” which is, rather needless to say, completely divorced from the real world, where people work so that they do not starve, not because they are free.^[21]  John Stuart Mill has said, “The generality of laborers … have as little choice of occupation or freedom of locomotion, are practically as dependent on fixed rules and on the will of others as they could be on any system short of actual slavery.”^[22]  If workers were “perfectly free” to choose their work, then Gallup would not have reported, as it did, that “70 percent of them either hate going to work or have mentally checked out to the point of costing their companies money.”^[23]  No one freely chooses to rent himself out to another; it is degrading.  Workers only do it because they own no property but their labour power; the ownership of capital is highly concentrated: today, 1% of the population owns 50% of all investment assets, 10% of the population owns 80% of investment assets.^[24]

This condition is by no means natural, as Marx well understood.  “Nature does not produce on the one side owners of money or commodities, and on the other men possessing nothing but their own labour-power.  This relation has no natural basis, neither is its social basis one that is common to all historical periods.”^[25]  But this is what political economy, including Adam Smith, takes for granted, these reified social relations which prestructure capital.  And that is why even liberal political economy as a profession and as a field seeks to redress symptomatic injustices (by Keynesian fiscal policy) without addressing its structural, institutional, social causes.  Because of its lack of any substantive structural, institutional, and social conception here, political economy remains unable to draw the cardinally important link, the internal connection between microeconomy and macroeconomy: it must sever them, consider them autonomously.  But this precisely is what Marx, for all of his many, many errors and misunderstandings, crucially perceived: the logic by which the macroeconomy is intimately linked with the logic of the microeconomy.  If, for example, the distribution of wealth in the economy is highly concentrated, it is in large part because of the process outlined earlier: because the worker, owning no capital, no property but his own labor power, must rent out his own mind and body and time to capitalists, who then, because they are fewer in number, are able to take a disproportionate amount of the profit.  If the richest 1% of Americans owns 43% of its wealth, this reflects the fact that they also own 50% of all investment assets.^[26]  As the social ethicist Gary Dorrien writes, “Those who control the terms, amounts, and direction of credit have a huge say in determining the kind of society that everyone else lives in.  Thus the question of who controls the process of investment is enormously significant.”^[27]  Economists like to say that the laws of supply and demand determine the allocation of resources in a society.  But, as Adam Smith recognized, demand is only made effectual by wealth:  “effectual demand … is different from the absolute demand.  A very poor man may be said in some sense to have a demand for a coach and six; he might like to have it; but his demand is not an effectual demand, as the commodity can never be brought to the market to satisfy it.”^[28]  My desiring something is not enough to create effectual demand; I must have the wealth to effectuate that demand, wealth.  In the allocation of resources, one votes with the dollar.  Therefore, those who have more dollars, more wealth, have a greater say in determining the allocation of society’s resources, regardless of what the “absolute demand” of the vast majority of the population might be.  That is why capitalism works exceedingly well — for a few people.  The hypostatized “law” of supply and demand, when it does not take into account wealth in this way, is a smokescreen: it hides the fact that the wealthy get to decide what is produced in a society by reifying it, by making it seem natural.  According to the economist John Kenneth Galbraith, it is precisely in this manner that the profession of economics commits what he calls “innocent fraud,” —  innocent because they do not commit it intentionally, fraud because it is “quietly in the service of special interest.”  He explains:

The approved reference now is to the market system. This shift minimizes — indeed, deletes — the role of wealth in the economic and social system … Instead of the owners of capital or their attendants in control, we have the admirably impersonal role of market forces. It would be hard to think of a change in terminology more in the interest of those to whom money accords power.^[29]

But the allocation of resources by “the Market” is not determined by natural law: wealth is distributed according to the ownership of capital, which is predetermined by a social relation, private property, a contingent historical configuration, not a law of nature.  According to this social arrangement, those who own the capital of society get to disproportionately determine what is produced in that society.

It is not difficult to figure out who they are either.  Our Kings and Queens feature every year in the Fortune 500. Who controls the capital of society controls society; who owns the capital of society owns society.  Even a political democracy is an empty husk without economic democracy.  As the American philosopher John Dewey has suggested, “democracy is not in reality what it is in name until it is industrial [economic], as well as civil and political.”^[30]  Without economic democracy, political democracy is a concept without substance, an empty promise, a vain lie.  That is why, writing about World War II, he pointed out the “absurdity of conducting a war for political democracy which leaves industrial and economic autocracy practically untouched.”^[31]

In this autocratic configuration of social relations, there is a core antagonism built into the very heart of the productive system.  It is antagonism by design — between the owners of capital on the one hand, and the vast majority of the population on the other.  As the economist Richard Wolff suggests, “The stunning thing … is the system we have that allows, in the core of the production arrangements of our society, for there to be a fundamental animosity.  The businessmen don’t want to pay higher wages … the workers want to get more for their wages.”  “They are at each other,” he continues, and this “conflict at the core of our society … damages us.”^[32]  This central antagonism at the core of production was also diagnosed by Adam Smith, who suggests that the interests of the workers and the interests of the “masters” as he candidly called them “are by no means the same.  The workmen desire to get as much, the masters to give as little as possible.  The former are disposed to combine in order to raise, the latter in order to lower the wages of labour,” although, he goes on, “It is not, however, difficult to foresee which of the parties must, upon all ordinary occasions, have the advantage in the dispute, and force the other into compliance with their terms.  The masters, being fewer in number, can combine much more easily … ”^[33]  Because of this, “High wages of labour and high profits of stock … are things, perhaps, which scarce ever go together …”^[34]  This antagonism by design is absurd.  This bears repeating as often as it must until we understand it, until we realize it and internalize it in the fullest starkness: this is absurd.  There is absolutely no economic reason for it, no natural necessity for it, and certainly no moral justification for it.  It puts humanity at war with itself for benefit of a few and at the expense of the many.  This is absurd.

THE ALTERNATIVE: ECONOMIC DEMOCRACY

But there is, as I have suggested, an alternative.  It is to democratize the ownership of capital.  If, as John Dewey and others have recognized, the political equivalent of the capitalist firm is the autocratic state, then, conversely, the economic equivalent of the democratic state, is economic democracy, which has historically assumed the name ‘socialism.’^[35]  Hitler understood this.  He writes, for instance, “In the economic sphere Communism is analogous to democracy in the political sphere,”^[36] — which is partially why he opposed democracy.  It would lead to socialism: “Western democracy of today is the forerunner of Marxism…”^[37]  If Hitler’s opposition to socialism is not good enough reason to support it, there are many others.

In the first place, this kind of socialism accords best with acquisitive human nature.  It is often argued that socialism would never work because human beings are greedy and selfish.  But on the contrary, it is precisely because human beings are greedy and selfish that socialism is not only preferable but even necessary.  Socialism, not capitalism, is the social system best suited to greed.  In fact, capitalism presupposes a good deal of generosity on the part of the workers, who munificently, even selflessly, give up a disproportionate share of profits to their employers.  If people really are greedy, as is claimed, then consistency would require them to be socialists, for only then can they selfishly claim their portion of the wealth of nations.  In fact, the basic premise of socialism was expounded nearly 250 years ago by a social philosopher who suggested, “Nothing can be more absurd … than to imagine that men in general should work less when they work for themselves, than when they work for other people.  A poor independent journeyman will generally be more industrious than even a journeyman who works by the piece.  The one enjoys the whole produce of his own industry; the other shares it with his master.”^[38]  I am quoting Adam Smith, who almost certainly did not recognize the radical core of this argument, taking for granted as he did Classical Liberalism’s notion of private property.

Secondly, socialism capitalizes on all the principal advantages of capitalism while doing away with its principal disadvantages.  If capitalism is a mode of socialized production and privatized profits, then socialism takes this one step further and socializes the profits too.  This is the way in which Marx and Engels understood socialism in relation to capitalism.  Marx and Engels were not so narrow-minded as to categorically reject capitalism.  But nor by the same token were so insular as to only see its advantages (as modern economics does).  They sought to take what was best in capitalism, and by getting rid of what is worst in it, to transform society into one in which capitalism’s own ideals — liberte, egalite, fraternite — could become concrete.  Marx and Engels believed that the colossal productive power of capitalism, which in the Manifesto they heap praise upon, should be harnessed to emancipate human beings from their enslavement to material necessity, to free them from the alienating burdens of labor to do what they wished with their leisure.  In the Manifesto, they write that the bourgeoisie “has been the first to show what man’s activity can be about.  It has accomplished wonders far surpassing Egyptian pyramids, Roman aqueducts, and Gothic cathedrals; it has conducted expeditions that put in the shade all former Exoduses of nations and crusades.”^[39]  For them, it wasn’t that capitalism was bad at creating wealth; they thought nothing in the world could match it.  It’s just that it is horribly bad at divying it up.  For Marx and Engels, capitalism is very good at producing wealth and very bad at distributing it.  Capitalism creates unheard of amounts of wealth, but expends it in the least rational ways, consumes it in such a way that some wealthy person’s pet dogs can eat caviar while children across the street are starving, in such a way that a small minority have more wealth than they could possibly desire while a vast majority have less wealth than they need.

Marx and Engels believed that socialism would transform this by turning the privatized profits, which are a corollary of private ownership of capital, into socialized (collective) profits.  In this way, they felt the sublime productive capacities of capitalism which derive from the social nature of its production could be harnessed to emancipate human beings from their enslavement to material necessity.  For this, they have been universally condemned as being fatuous and muddle-headed, guilty of having subscribed to the absurd and damnedly preposterous belief that society’s productive capacities should be used to make human beings more, not less, free. It is, you will have noticed, a very rational notion, and exceedingly simple too.  Therefore it has been roundly condemned on all sides — foolish, quixotic, downright naughty.  Implausible.  But the condemnations are hardly sound, as anyone can see, would he or she think about it for thirty seconds.  It wasn’t only Marx held these ideals.  The economist John Maynard Keynes seems also to have been infected with this virus of hopeless romanticism.  Keynes predicted that, by virtue of increases in economic productivity, his grandchildren “would only work 15 hours a week, exploiting their greater productivity not to make more money but to have more leisure time.” Rather uncannily and perhaps unintentionally echoing Marx’s ideal of the human being who is at last free to “to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner,”^[40] Keynes believed that by utilizing the economic productivity of society, human beings, having freed themselves from the material shackles of labor, would be able to “cultivate into a fuller perfection the art of life itself.”^[41]  As Dylan Matthews of The Washington Post rightly pointed out, Americans today are “more than twice as productive as we were in 1964. That means that we could work less than half as much as we did then and still have 1964-style living standards,” but Matthews fails the point out the rather obvious reasons why we in fact do not work “half as much,” despite “growth actually exceeding Keynes’ forecast” — uncontroversially, because “all the growth in recent decades — and more — has gone to those at the top” (Joseph Stiglitz).^[42]

Now let us, for the sake of argument, assume that the gains in wealth and productivity in past decades had gone to the workers.  Some would still object that, rather than working less and enjoying the same standard of living, workers should work the same amount and enjoy a higher standard of living with their additional income.  The objection misses the point.  I do not care what the worker freely chooses to do, whether it is to work more or work less.  I only care that the worker has this choice.  Socialism is not about telling people what to do.  It is about providing the material preconditions under which people are freer to choose as they please. As Adam Przeworski suggests, “we cannot tell today what a socialist society would be like today precisely because we do not know what human beings would want and what they would do if they were free.  Socialism is not yet another social order, it is the end of all social orders,” and in the final analysis, “It means freedom, not democracy, equality, creativity, or happiness.”^[43]

In the strange paradox of productivity, in which people neither earn more nor work less as aggregate productivity booms, we can see why everything changes when that absurd antagonism between worker and owner about which this society is organized is transcended.  To give a concrete example, consider the strange paradox of the machine.  In asking what the purpose of a machine is, it is not unreasonable to answer that it is to free human beings from labor in general and from particularly venal labor in particular.  In The Right to be Lazy (1883), Paul Lafargue suggested: “Our machines, with breath of fire, with limbs of unwearying steel, with fruitfulness wonderful inexhaustible, accomplish by themselves with docility their sacred labour … the machine is the saviour of humanity, the god who shall redeem man from working for hire, the god who shall give him leisure and liberty.”^[44]  And Oscar Wilde, in The Soul of Man Under Socialism (1891), suggested, “man is made for something better than distributing dirt. All work of that kind should be done by a machine.”^[45]  This would be true, at least, in a rational society.  But things are not so.  As John Stuart Mill suggested in Principles of Political Economy, (1848) “It is questionable if all the mechanical inventions yet made have lightened the day’s toil of any human being.”^[46]  And Marx, who in the Manifesto remarked that man “becomes an appendage of the machine,”^[47] also observed “the economic paradox,” namely that “the most powerful instrument for shortening labour-time, becomes the most unfailing means for placing every moment of the labourer’s time and that of his family, at the disposal of the capitalist for the purpose of expanding the value of his capital.”^[48]

This “economic paradox” is hardly hypothetical.  Consider, for example, the most recent mechanical innovation: the computer, the history of which demonstrates exactly the paradox Marx and Mill recognized.  The economist Richard Wolff writes, “Across our culture, beginning particularly in the 1970s, huge numbers of people lost their jobs because computers could now do with one of two operators what used to take hundred of people.”^[49]  The introduction of the computer into the market, rather than freeing people from labor, had the opposite effect.  In displacing workers, the introduction of the computer into the market put downward pressure on wages.  Wolff writes, “What did the American working class of people do now that their wages stopped rising?  First, the American working people did more work.  If the wages you get per hour don’t go up anymore, one solution is more hours.”  In the period from 1970 to 2010, the average hours worked by American workers rose 20 percent.^[50]

But the computer was not the only reason American wages stagnated and American workers started working more.  It is one part of the history of the last 40 years (1970 – 2010), which is itself a testament to the utter absurdity of the antagonism by design built into the capitalist system, and a demonstration of the dire need — now greater than ever — to fundamentally reshape this system.  For a period of 150 years, from 1820 to 1970, American wages rose every single decade.  As productivity rose, workers shared in the increased prosperity.  But that 150 year period of prosperity came to an end in the 1970s, when real wages stopped rising for four reasons, one of which was already given, the computer.  Wages also stopped rising because of increased competition for markets from economically rebuilt competitors like Japan and Germany who were powerless in the immediate postwar years, because of the increase of women in the labor market, and because of an increase in immigration.  All of these changes worked together to weaken the bargaining strength of American workers.  Wages stagnated.  A number of things resulted from this.  Firstly, American workers, starting in the 1970s, proceeded on a “borrowing binge that no other working class in any country at any time in […history…] ever did before.”  Secondly, American corporations, able to keep wages low while absorbing massive gains in productivity, experienced “the greatest profit boom in the history of American capitalism.”  While some Americans starved in poverty and real wages stagnated, American corporations had so much wealth they did not even know what to do with it all.  What did the corporations do with these profits?  Invest them in socially-responsible ways?  No; with their excess wealth and their “irrational exuberance” (Alan Greenspan), they created speculative bubbles: the dot com bubble of the nineties, and, after that crashed, the housing bubble a decade later.  Thirdly, these corporations, unsure what to do with all of their excess profits, decided to invest them in banks, through which they would lend to their employees who were now borrowing at historically high rates.  Wolff writes, “To understand the American economy in the last thirty years, then, amounts to this.  Employers no longer raised the wages of their workers.  Instead, they lent them the money.  That’s why it’s an employer’s fantasy come true.  Instead of raising wages, I lend him the money, which he has to pay me back with interest.  Isn’t that better than paying them wages?  This is nirvana, or as close as business gets to nirvana.”^[51]  This is utter absurdity.  In a sense, workers have been paying their corporations not to pay them.  It is difficult to imagine a situation more blatantly absurd than this.  Now how is this, as I have earlier said, a testament to the utter absurdity of the antagonism by design built into the capitalist system?  Recall that everything I have here described has been, at least in part, a result of the weakened bargaining power of workers.  But this bargaining power and its weakening presupposes an economic system in which bargaining must take place at all — a system founded on the antagonism between the worker and the owner.  The economics of the absurd which we have been witness to over the past few decades in particular is, at a fundamental level, a result of this antagonism between workers and owners: workers didn’t fairly partake of the gains in productivity; owners had so much profit that they did not know what to do with it, and in the end invested it in socially deleterious ways.  Scarcity in the midst of surplus.

Now we might imagine what the past 40 years might have been like if we had transcended the antagonism by design upon which capitalism is organized, if instead of having workers on the one hand and owners on the other, all workers were owners.  Because they all collectively own the firm, worker-owners in democratic enterprises do not have the same profit incentives as the traditional capitalists. It is ludicrous to imagine, for instance, that with the introduction of the computer or women or immigrants or increased competition in the market, they would have fired themselves.  Unless for some inexplicable reason they felt inclined to do something either charitable or ridiculous with their profits, the worker-owners would themselves have absorbed the massive gains in productivity.  Moreover, because the profits would be shared more equitably by workers who would thereby have less incentive to borrow, firms would have less excess profits either to invest in speculative bubbles or to deposit into banks, and the absurd logic whereby workers pay interest to corporations which do not pay them higher wages would then have no real basis.  By any reasonable standard, the resources of society would be allocated far more efficiently.  Here, then, are a few good reasons for socialism: in democratizing the ownership of capital, thereby the major economic decisions of the society, socialism makes the mass of the population freer to decide as it wishes to do with this time and money while systematically diminishing the conditions, means, and incentives for a gross mis-allocation of society’s resources.  This, in theory, is what economic democracy would do.  This is what it does in practice as well.

RADICAL GRADUALISM

There are many examples of economic democracy in practice, some small-scale, some large, some successful, some large.  A goal of programmatic socialism should be to take what is best from these existing examples, learn from their flaws, experiment, improve, and expand. Systematic blueprint socialism has proven itself to be a catastrophic failure.  Socialism must learn to be protean and experimentalist, identifying the best elements of what already exists and improving them and expanding them as elements in what could exist.  Marx once remarked that every new society is born out of the ruins of the old: “Men make their own history, but they do not make it just as they please; they do not make it under circumstances chosen by themselves, but under circumstances directly found, given and transmitted from the past.”  The way he understood this necessarily made it a bad thing: “The tradition of all the dead generations weighs like a nightmare on the brain of the living,” he writes.^[52]  But in the manner of gradualist and experimentalist socialism, the birth of the new out of the form of the old is not a bad thing; for the old is here transformed from a nightmare on the brain of the living to a visionary glimpse, a foretaste of our own immense possibilities by identifying, improving, and expanding the best of what already exists.

Let us consider first a spectacularly successful example of working economic democracy.  Sixty years ago in the Basque region of Spain, a Roman Catholic priest named Jose Maria Arizmendi inspired a group of students to launch a cooperative which grew to become Mondragon, now one of the largest exporters of durable goods (and one of the largest firms) in Spain.  Mondragon is a worker-owned cooperative called run by over a hundred thousand worker-owners, and runs over 125 subsidiary companies, 75 industrial firms, five schools, a technical college, and a central bank.  Mondragon prefigures in germinal form that which might be hoped for on a grander scale.  It prefigures socialism and economic democracy within the very framework of a capitalist order, within which it thrives, even in the throes of financial crises.  So, for example, when 25 percent of all businesses in Spain failed as a result of the global financial crisis of 2008, less than 1 percent of Mondragon’s 125 businesses failed.^[53]  And while the larger Basque region in which it is located suffers from a 12 percent unemployment rate, Mondragon has maintained zero unemployment.^[54]  Moreover, the default rate of Mondragon’s central bank is “less than half that of other Spanish banks.”  And the Basque region in which Mondragon operates, which was once the poorest region in Spain, is now, thanks to its cooperatives, one of the wealthiest, boasting both the highest standard of living and lowest unemployment in all of Spain.^[55]

But we need not look far for examples.  Democratic economic prefigurationalism can even be observed here in the United States, where there are upwards of 12,000 worker-owned enterprises.^[56]  In an article entitled, “Everyday Socialism, American Style, Is Happening Now,” Gar Alperovitz, a professor of political economy at the University of Maryland, suggests that socialism is not only as “common as grass,” with cooperatives and public utilities and the like, but is also often cheaper and more efficient than capitalist enterprises for the simple reason that co-ops don’t pay ludicrous salaries and dividends to rich CEOs.^[57]  From Boston to Austin to San Francisco, these alternate forms of economic organization are becoming more and more attractive to people who are tired of capitalism, of inequality, of a form of socio-economic organization whose only fulfilled promises, of the many it makes, seem to be continual unemployment, permanent war, and rapidly escalating environmental destruction.

Mondragon and American cooperatives are but a few examples of institutions some elements of which provide in germinal form what can be experimented with, improved upon, and augmented in the society of the future.  Utopia is everywhere, if only in germinal form.  Universities, for example, prefigure many of the ideals of historical socialism: community, equality, fairness, cooperation, etc.  At Harvard for instance, though by no means perfect, inequalities between students, while not abolished, are significantly attenuated by providing all undergraduates access to excellent health plans, universal meal plans, guaranteed housing — funded largely by the tuition fees paid by wealthier students in what amounts to a significant redistribution of resources.

Utopia can be found in germinal form even, perhaps surprisingly, in the military complex, which provides a form of social entitlement to each of its members in health, education, and housing entitlements.^[58]  As the former military general Wesley Clark only half-jokingly suggested, the U.S. military is “the purest application of socialism there is.”^[59]  Nicholas Kristof writes in the New York Times, “if we seek another model, one that emphasizes universal health care and educational opportunity, one that seeks to curb income inequality, we don’t have to turn to Sweden. Rather, look to the United States military.”^[60]

There is even more we can learn from the U.S. military, namely the powerful effects of an active state sector.  Capitalist enterprises are supported heavily by an active state sector.  Since the Great Depression, it has been understood that the state must play an active role in stimulating the economy, and it has.  Much of this stimulation, however, has come from military spending, which is already greater than the rest of the world’s combined, and takes up half of all discretionary spending in the United States.  But according to the most elementary economics, there is no reason to spend public funds on the military in this way; in terms of its stimulative effect, government spending is as efficient, if not slightly more, when spent on things like schools and hospitals.  As the British socialist Tony Benn suggests, “In the 1930s, we had mass unemployment, but we don’t have unemployment during the war.  If you can have full employment by killing Germans, why can’t you have full employment by building hospitals, building schools, recruiting nurses, recruiting teachers?  If you can find money to kill people, you can find money to help people.”^[61]  Radical socialists are not the only one’s who recognize this.  This is standard economic wisdom.  As Paul Samuelson writes in his standard textbook, Economics, in addressing

the problem of achieving and keeping full employment, we should examine what would happen if the cold war were to give way to relaxed international tension. If America could cut down drastically on her defense expenditures, would that confront her with a depression problem that has merely been suppressed by reliance on armament production? … If there is a political will, our mixed economy can rather easily keep C + I + G [C = consumption, I = investment, G = government spending] spending up to the level needed for full employment! There is nothing special about G spending on jet bombers and intercontinental missiles that leads to a larger multiplier support of the economy than would other kinds of G expenditure.^[62] (My emphasis)

After the Cold War ended, with all of the major military enemies vanquished, U.S. military expenditures could have been diverted into social spending on things like education, health, and cooperative businesses.  The awesome power of government spending could have been harnessed toward more democratic and social projects.  But it was not.  Today, despite the lack of any military opponent even nearing the scope of the Soviet Union, military spending is higher than it was during the peak of the Cold War.^[63] Nevertheless, we can at least imagine how things would be different if we directed the vast reserves of the U.S. treasury toward social projects.  We can at least imagine what Roberto Unger calls a “war economy without a war.”^[64] The state could play a significant role by helping to coordinate cooperatives and to provide the supporting capital.  It already does this for small businesses through the Small Business Administration, and it already does this for big businesses through massive corporate welfare in the form of subsidies and tax breaks.^[65]  Transmuting corporate welfare into social spending would be transformative, not least because corporate welfare is massive.  As the economist Dean Baker suggests, “welfare is about having the government do everything it can to make the rich absolutely as rich as possible.”^[66]  According to one British study of the 100 biggest corporations on the Fortune 500, every single one of them benefited from the state: “Virtually all of the world’s largest core firms have experienced a decisive influence from government policies and/or trade barriers on their strategy and competitive position…” And the authors estimate assess that “at least twenty corporations in the 1993 Fortune 100 would not have survived at all as independent companies, if they had not been saved by their respective governments.”^[67]  According to a report by the CATO institute, corporate welfare costs taxpayers nearly $100 billion per year through subsidies that “distort economic activity and create even larger failures than might have existed in the marketplace.”^[68]  And this doesn’t include $200 billion per year in tax breaks to corporations.^[69]  This massive welfare can be redirected from the military and from human-corporate-beings to human-actual-beings.

There is no reason that we cannot create democratic institutions which incorporate and augment the best of these elements, and no reason such institutions cannot grow, develop, and flourish within the very fabric of a deeply anti-democratic, anti-social, anti-human capitalist market economy.  As the political philosopher Roberto Unger suggests, “change can be gradualist and fragmentary in its method and nevertheless revolutionary in its outcome.”^[70]  In the Gospel of Matthew, Jesus suggests, “The kingdom of heaven is like a grain of mustard seed that a man took and sowed in his field.  It is the smallest of all seeds, but when it has grown it is larger than all the garden plants and becomes a tree, so that the birds of the air come and make nests in its branches” (Matthew 13:31-32).

As with the conversion of an individual, the conversion of a social system is gradual and requires commitment and work.  Nevertheless, there are mechanisms by which the conversion can be accomplished with considerable efficiency.  One of these is the Rehn-Meidner plan, an economic plan proposed in Sweden which horrified the capitalists.  According to the plan, a “20 per cent tax on corporate profits would flow into wage earner funds controlled by the unions to be reinvested in the corporations,” writes David Harvey, who suggests the effect of such a plan “would be to steadily reduce the significance of private ownership and to build towards collective ownership managed by the representatives of the workers” and includes the “gradual annihilation” of the capitalist class.^[71]  A second institutional mechanism by which the gradual democratization of the market may be facilitated and quickened is the abolition of inherited privilege through steep taxation on inheritance.  Because, “hereditary transmittal of economic and educational advantage through the family continues drastically to restrict mobility among generations,” Unger writes, “the simple abolition of the right of inheritance … for everything except a modest family minimum would everywhere amount to a revolution.”^[72]

There are definite limitations to the brief sketch I have provided here.  Principally, it is that it only touches upon the economic aspects of the society of the future.  It says nothing of the political, the cultural, the religious, the artistic, etc, all of which are as important to the life of the individual as well as the collective.  Moreover, economic transformation cannot successfullly occur on its own, and crucially depends on transformation in these other spheres.  It seems to me very difficult to imagine any kind of socialist future without an active and democratic polis which is the precondition for the kind of the change I mentioned here.

Gone are the days of blueprint socialism.  This rigid, systematic kind of socialism has proven itself to be a failure.  The role of socialists and progressives today is not to provide systematic arguments, but programmatic ones, the aim of which is not to tell people what kind of society to make, but to give them a sense of the kind of society they can make.  Socialism is, above all, about freedom: it is not about telling people what to do, but what they might (or might not) freely choose to do, given their minimal possibilities, which it is the role of socialism to outline.  These minimal possibilities are immense: full employment, the total eradication of poverty, productive and socially-inclusive economic growth, a shortened work schedule (less labor and more leisure), a dimunition of inequality, deepened democracy, a greater say in the major investment decisions of society and in the allocation of resources in that society, and in the final analysis, a bigger, freer, more empowered life for individual as well as the collective, in which, as Marx says, “the free development of each is the condition for the free development of all.”^[73]