In a recent op-ed, Slavoj Žižek rehashes a familiar deadlock of leftist thinking. He observes that even as capitalism encounters new forms of crisis and instability, the contemporary Left still suffers from writer’s block. The Left correctly stresses that instituting an alternative economic system is a matter of urgent necessity. But to date, it’s still only arch-capitalists like Bill Gates, Mark Zuckerberg, Peter Thiel, and Elon Musk who appear to be thinking creatively about the future.
While some of these men support universal basic income and green energy, each of them remain allegiant to their own entrepreneurial skills. What they’re really good at is finding new ways of private profit-making as we slide further toward dystopia. In short, not one of them could be mistaken for a communist.
And so on the Left we must ask ourselves: for how long can we rely on billionaires to imagine our future for us? Where has the socialist imagination gone?
The problem isn’t new. Žižek dismisses the ability of capitalism to self-correct, but he’s also willing to face the failures of past experiments in socialism, those bitter pills named Stalin, Mao, and Pol Pot. This double-dose of despair—abashment over the past while drawing a blank about the future—cultivates a paralyzing anxiety, leaving the Left at a loss to engage in creative thinking. The late theorist Mark Fisher had a term for this impasse: capitalist realism. Writing in 2009, Fisher lamented, “Capitalism seamlessly occupies the horizon of the thinkable.” Nearly a decade later, despite all the renewed interest in socialism, one’s tempted to say the same thing.
Since then, the ideological Left has made some progress, but not much. Medicare For All is certainly a start, but it’s only that—a start—and it’d be naïve to suppose that universal healthcare would change everything. It won’t, because it doesn’t represent a transformation of the economic order. Rather, it modestly proposes that capitalism be a bit less vicious.
The closest Žižek comes to proposing a solution is the following: “Perhaps we need to design a socialist system, which also recognizes achievement.” He’s on point, but it’s frustrating how close he comes before stopping just short of putting a name to the concept.
The term he’s looking for is market socialism.
What’s market socialism? In short, it’s an alternative to capitalism that preserves one of its identifying features: competitive markets. The socialist part concerns the question of ownership: how firms are owned, controlled, and financed, and in turn how profits are distributed. Though so much anti-capitalist discourse focuses on the chaos and brutality of inter-firm competition, the market-socialist insight is to recognize that Marx’s critique was more fundamentally concerned with the problem of ownership. After all, capitalism is most usefully understood as a system of property relations; in other words, capitalism is merely a structure for negotiating ownership. And so it remains Marx’s enduring question: who owns the means of production, and why?
Past experiments in socialism, most notoriously the Soviet Union, abolished markets along with private ownership of productive assets. Virtually all of the economic evils commonly associated with socialism—firm inefficiency, product homogenization, misallocated resources, and stagnant technology—result from central planning, not collective ownership. We’re in the habit of assuming a necessary connection between the two, but in fact markets and collective ownership aren't mutually exclusive. This distinction is crucial, because it means that we can pursue socialistic economic programs while casting off the baggage of failed experiments. By preserving competition, market socialism still rewards innovation, achievement, and business acumen. What it changes is how the fruits of those virtues are handled.
There are a number of market-socialist models, tentative versions of which have even popped up in reality. In the 20th century, one can look to Yugoslavia and Sweden for examples of systems with market-socialist characteristics. Today, the dynamic and truly unique Chinese economy is best described as market socialist, even though western commentators repeatedly mischaracterize it as capitalistic.
But for our purposes, the work of David Schweickart is instructive. A philosopher, mathematician, and committed Marxist, Schweickart has developed a system for market socialism that he calls “economic democracy.”
Before looking at the characteristics of economic democracy, let’s first look at his understanding of capitalism. For Schweickart, capitalism is defined as an economic system with three characteristics: (1) most productive assets are privately owned, (2) products are exchanged using prices set by competitive markets, and (3) most people earn their income through a contractual wage or salary.
Importantly, an economy must have all three of these characteristics to qualify as capitalism. (Ours does.) If you remove even one of them, then the system isn’t quite capitalism anymore. But that also means that to escape capitalism, you don’t have to jettison all three. For instance, Soviet-style communism had no markets and no privately-owned productive assets. But most people still lived off a wage, like we do. There are other ways one can mix and match Schweickart’s elements. For instance, consider a system of private ownership and wage labor nonetheless dominated by central planning. Likewise, a bona fide market socialism dispenses with wage labor and private ownership, but maintains markets characterized by inter-firm competition.
To get even more concrete, Schweickart enunciates three central planks of economic democracy. The plan is best expressed in its pure form, but it’s also designed to be instituted in a semi-gradualist manner.
First, economic democracy abolishes wage labor by mandating worker ownership. This is done by converting all corporations, LLCs, and partnerships into a form of business association known as a worker cooperative. In a worker cooperative, there are no contractual employees. Instead, workers have an equity interest in the firm’s profits by contributing their labor. With this equity interest comes a one-worker-one-vote system of democratic administration—just like in a partnership, LLC, or corporation—so that the operation and direction of the firm is controlled democratically.
Worker cooperatives are non-controversial and well-tested, and the main thing they do is resolve the exploitation inherent in the wage system by transforming objectified workers into residual earners. But recall the wage question is distinct from that of private business assets. To address that issue, Schweickart’s proposal is both provocative and brilliant. He proposes a capital-assets tax on all businesses. The capital-assets tax represents the “rent” paid on borrowing society’s productive assets. No mere individual, or private collective of individuals, owns the means of production. Instead, workers are only borrowing them from the people, and for that you pay the people a rent.
Scared of new taxes? Naturally. Schweickart notes that the capital-assets tax is meant to replace other employment-related taxes, such as the payroll tax, not build upon them. Furthermore, the capital-assets tax is offset by another expense that economically democratic firms avoid: financing. This question may’ve occurred to the reader when it came to abolishing the corporate form in favor of cooperatives: without issuing stock, how are firms funded? Other than through corporate finance, where do workers get the money to form a cooperative in the first place?
It’s a good question, and Schweickart answers it with his third plank: social control of new investment, funded by the capital-assets tax. So rather than paying dividends and interest payments to stock-and-bond holders, firms instead contribute funds to a pot of public financing. An elaborate system of public banking then distributes those funds back to businesses, based on their demonstrated potential for employment, innovation, profit, sustainability, and evenhanded geographic development.
And there you have it, Mr. Žižek: an alternative to capitalism that still rewards achievement.
Schweickart’s model is great, but not necessarily perfect. It deserves our careful scrutiny. For a much closer look at all of the nuances, his book After Capitalism builds a strikingly solid case for economic democracy.
The importance of this exercise is to demonstrate that the Left has no excuse for its ongoing failure to identify its goals, think creatively, and organize a coherent vision of the socialist future. The ideas are already out there; the Left need only seize on them. But will it? I don’t know. Alain Badiou, another influential communist philosopher, said recently, “The alleged power of capitalism… today is merely a reflection of the weakness of its opponents.”
I’m sorry fellow lefties, but he’s talking about us.
—Follow Tom Syverson on Twitter: @syvology