Tuesday before last, as Eric Levitz put it in Vox, the American socialist movement “seized the commanding heights of New York City.”
I spent the evening doing a GTAA live show in the basement of a bar in Queens. (It was a lot of fun. I’m hoping we’ll have a video soon to share on the YouTube channel.) After we were done recording the podcast, there was an afterparty in the main bar area upstairs. There was a DJ, though them music was turned down for everyone to boo Cuomo’s speech and cheer Zohran’s, and then everyone got a complimentary glass of champagne. (It’s a very politically sympathetic bar!) The whole thing felt slightly unreal. Everyone came into it expecting a victory, but the size of that victory was refreshing. Mamadni broke the 50% barrier and thus put an end to months of nonsense about how a majority would reject him if only all but one of the other candidates dropped out. And his speech started with a quotation from Eugene Debs.
I’ve been a socialist since I was a teenager in the 1990s. The prospects for this particular political project haven’t exactly felt bright for most of that time. Every now and again, though, we get a taste of what winning might actually look like.
The next morning, in that Vox article (“How would Zohran Mamdani’s dream economy actually work?”), Levitz wrote:
Mamdani’s election constitutes a triumph for America’s long-suffering socialist movement — possibly, the most significant in its history.
His victory may therefore lead some Americans to ask the question: What do these people actually want?
Or, more specifically: How do they think “democratic socialism” would work, in practice? Do Mamdani and his allies want to make America into Norway — or into a kinder, gentler Soviet Union?
These questions have no single answer. Pose them to two socialists and you’ll get three opinions. But Bhaskar Sunkara, founder of the socialist magazine Jacobin, has sketched one of his movement’s clearest blueprints for a democratic socialist society. And he will soon publish a more detailed account of that vision, which he calls “market socialism,” in a book1 coauthored with his colleagues Ben Burgis and Mike Beggs.
In the opening rounds of the interview (which Levitz framed as a “debate” when he posted it on Twitter2), he and Bhaskar go back and forth about what progressives can learn from the outcome of this particular election, and how it connects to broader national trends. Then Levitz pivots to much long-term horizons:
Let’s talk about seizing the means of production.You are a proponent of “market socialism.” To many, that may sound like a contradiction in terms. Historically, socialism has been associated with the ambition to cease allocating resources through markets and begin doing so through central planning. So why do you think that even a socialist utopia would want to preserve the market economy?
Anyone who wants my take on the relationship between a form of socialism that would have to retain markets in some sectors and a longer-term and much more speculative vision of marketless socialism can check out last week’s essay on this Substack. In my own way, I make it to the same place Bhaskar does in his answer to Levitz.He says:
The market in and of itself isn’t capitalism. Capitalism is a system where firms hire wage labor to produce for profit, extracting surplus value and reinvesting it to expand their capital.
In my vision, a socialist society would retain markets as tools for coordination and consumer choice. But the firms operating in these markets would be run by worker cooperatives that are funded by public banks.
The reason why I’ve come to embrace markets is just by looking at the actual practice of central planning under socialism.
In any system, society still has to decide what to produce, how much, and for whom. Central planning attempted to answer these questions administratively. But planners lacked the information necessary to rationally allocate goods. And they also faced severe incentive and agency problems — managers had little reason to report results honestly or innovate when the survival of their firms didn’t depend on efficiency.
Any readers who wonders if the pathologies of that form of planning were really as bad as all that would be well-advised to check out Seth Ackerman’s classic Jacobin essay “The Red and the Black.” Ackerman doesn’t dwell on the most extreme failings of that system. He focuses on the day-to-day frustrations of ordinary consumers long after the horrors of the Stalin era were over.
A couple of months ago, at a conference in New York for the 15th anniversary of Jacobin, I was on a panel on post-capitalist blueprints with Aaron Benanav and Nicole Aschoff. I framed this point there by talking about Boris Yeltsin. When he left the Soviet Union for his first big trip to the West, he was a democratic socialist reformer. He came back as the greatest champion of full capitalist restoration. His big epiphany came when he was blown away by the experience of visiting a normal capitalist grocery store. That’s a “supervillain origin story,” I suggested, that we need to take seriously as we think hard about what more successful socialist experiments might look like in the future.
One concern about markets even as an allocation mechanism for consumer goods in a society where production has been democratized on a firm level and “commanding heights” like energy, transportation, and finance are directly owned by a socialist state is raised by Søren Mau in his book Mute Compulsion. Just as workers are economically compelled to work for capitalists, groups of workers collectively owning their own means of production in this kind of post-capitalist economy would have to bend to producing what the market demanded. When you talk about markets transmitting information “signals,” Mau says, that doesn’t sounds so bad. But, what it really transmits are “binding commands.” As I discuss here, I don’t find that critique very compelling. In any economy, we want people to be producing things that they or other people want. Otherwise, what’s the point?
The socialist ideal has never been that we’d stop serving each other. It’s that, instead of dividing society into classes of masters and classes of servants, we’d all serve and be served by one another as free and equal people.
As Bhaskar emphasizes in his next answer to Levitz (when pushed on why ending capitalism and ending market mechanisms in general might be seen as a package deal, and why he disagrees), the difference between the two forms of service is about power.
Part of the problem is that, in today’s economy, there’s massive inequality. In the market, $1 amounts to one vote on what society is going to produce. Well, in our society, the most essential and hardworking people — those who take out our trash and provide other vital social functions — earn barely anything compared to the super rich. So, markets favor the latter’s preferences over the former’s.
But in a society with greater equality — including the end of wage labor and stronger social protections — markets could look very different. Saying, “Hey, I worked this much and earned an income of $100, and it’s up to me how I want to spend this money” makes a lot more sense than deciding democratically how you get to spend your $100.
In any case, given the experience of the 20th century, the burden of proof is really on people who think that there’s an alternative to markets as a coordination mechanism.
OK, but what would an alternative to capitalism that stopped short of full marketlessness (at least at this stage of history) actually look like?A bit later in the interview, Levitz raises some basic concerns:
In our world, investors are primarily responsible for identifying promising enterprises. And they often force the shutdown of inefficient ones, freeing up capital for more productive businesses. So, how does your system function without capitalists?
Bhaskar responds:
In a market socialist system, you need public banks that can support worker-controlled firms and provide them with startup capital. And they’re doing that on the same basis as a bank would under capitalism — they are trying to give money to firms that they believe will be profitable and will pay back their loans.
As far as closing down inefficient firms, one of the greatest failures of socialism in the 20th century is what economists have called “soft budget constraints.” In a state socialist system, it would often be apparent that some firms were very inefficient, but it would be impossible to shut them down for a variety of reasons.
Partly, this was because of political dynamics: Authoritarian socialist societies relied on full employment as a means of legitimizing their rule. And it was politically unpopular to shut down these firms.
So how do you resolve this? Well, the firms have hard budgets. The firms need to produce enough to cover their wage bill, cover their expenses, otherwise they’re just simply going to go out of business.
Of course, the price of failure doesn’t need to be destitution. Our model picks up where the most expansive kind of social democracy that can be built under capitalism leaves off, so worker-members of firms that went under would be falling onto the cushion of a maximalist welfare state. (We also go beyond this baseline with direct state UBI payments to all adult citizens, completely de-linked from employment, which both softens the costs of exiting one cooperative for another and reduces inter-sector and inter-firm economic inequality. A typical citizen who didn’t work in the fully public sector would have three income streams—(i) regular ‘wages’ constitutionally prevented from falling below thresholds set by state labor boards a la the kind of wage floors that have been beta-tested under capitalism in post-war Australia and some of the Nordics, (ii) residuals from firm revenues left over after internal costs are met and grant payments are made for use of state-owned means of production, and the UBI payments.) Nevertheless, it is important that budgets be kept hard enough that inefficient firms are allowed to go under. One of the hard lessons of the 20th century is that firm failure is a price that needs to be paid in order to maintain a thriving socialist economy instead of the kind of economic mess that would be a petri dish for future Yeltsins.
Levitz pushes back at length:
But why wouldn’t political dynamics just reproduce the “soft budget” problem again, in practice? Ultimately, these banks are public entities accountable to elected governments, which will have incentives to avoid economic disruptions.
For example: Say a public bank chokes off funding to a large, inefficient steel mill, and lots of workers lose their jobs. That decision is going to be very salient to those unemployed steel workers. And those workers could then threaten to vote against the current government unless it intervenes and reverses the bank’s decision.
Meanwhile, it’s unlikely that other voters would mobilize in support of shutting down the mill. It might be in the long-term interest of virtually all workers for capital to be efficiently allocated. But the immediate benefit of closing any one firm is small, diffuse, and essentially invisible to ordinary people.
We see these dynamics at play in the real world. When economic decisions become politicized, governments routinely pursue policies that benefit well-organized interest groups, at the expense of the broader populace.
To many liberals, this is why we need private investors; their insulation from the political process enables them to impose hard budgets and thus allocate capital efficiently.
Or, to put a finer point on the argument: The reason why socialism has historically failed isn’t due to some contingent design failure. It’s that bringing all investment under the purview of state institutions inevitably leads to inefficiency.
Bhaskar’s response is succinct but very solid:
That’s a legitimate worry, but the tendency for politicians to shield failing firms from closure isn’t unique to socialism. We see versions of the same “soft budget” behavior under capitalism all the time.
The real question is how to manage it. In a socialist framework, public banks would need to operate with clear rules and genuine operational autonomy.
Political pressure to prop up firms can also be mitigated through social policy. If workers know that job loss doesn’t mean destitution — because there are strong safety nets and active labor-market programs that quickly reconnect people to work — then firm failure becomes more tolerable. People don’t have to fear it, and governments don’t have to panic over it.
The rest of the back-and-forth about the economic mechanics is very much worth reading. (Check out the full interview.) But the last part I want to highlight is, appropriately enough for this Substack, more philosophical.
After explaining why some market mechanisms can’t be transcended entirely any time soon, Bhaskar explains why he’s nevertheless committed to transcending capitalist property relations as quickly as possible:
The problem with capitalism is, first, distributional: It allows poverty amid plenty and gross, unnecessary levels of income inequality.
And then there is also a democratic problem: the fact that our workplaces are run as quasi-dictatorships, especially in non-unionized sectors. And it’s my view that workers can democratically elect management and run their workplaces in a different way. And that’s why I’m a socialist.
He could, of course, have added a number of further problems with capitalism. In the last chapter of our book, we go through Erik Olin Wright’s eleven main objections to capitalism from his book Envisioning Real Utopias, in each case explaining why we’re optimistic that our version of socialism would be better. But obscene levels of distributional inequality and fundamentally undemocratic mechanisms at the point of production are massive items on that list, and a good starting point for further discussion.
Levitz argues at length (or presents at length the arguments “a liberal” might make) that the democratic concern might not make as much sense as it seems to:
A liberal might question your analogy between capitalist firms and dictatorships. After all, a dictatorial state wields the power of life and death over its subjects. And its citizens often can’t legally escape its control.
By contrast, in liberal capitalist societies, firms are voluntary organizations. These institutions cannot kill or imprison their employees. And all workers have the legal right to refuse employment at a hierarchically organized enterprise.
Of course, in our world, workers may not always be capable of exercising that right. There isn’t always another job available or alternative way to feed your family. But in principle, one could imagine a society with a general welfare state — and full employment — where workers can comfortably quit any job they don’t like.
Why then, in our ideal society, should we forbid people from forming economic enterprises that are internally governed in a non-democratic manner? After all, we’re presumably going to let people form religious and civic organizations that are not internally democratic, unless your socialist vision entails the criminalization of Catholicism.
Before quoting Bhaskar’s answer, I’ll just go ahead and reassure any readers anxiously clutching rosary beads right now that we do not in fact advocate the criminalization of Catholicism. Any democratic socialism worth wanting would preserve standard bourgeois-liberal rights like freedom of religion. But, what’s the disanalogy between the two cases?
Bhaskar responds:
I understand the liberal intuition there — that if people are free to leave their jobs, then they’re not really unfree. First of all, it’s true that we’re not living under feudalism. But I think that’s a very thin conception of freedom. Under capitalism, workers have “exit” without “voice.” They can quit, but they can’t meaningfully shape the conditions of their work under ordinary conditions. For many people, exit isn’t a genuine exercise of autonomy, but a threat you make when you’re desperate.
Democracy at work is about extending the same principle we apply in politics: we don’t say people are free because they can leave their home country; we say they’re free because they have a say in how it’s governed.
This is, essentially, an appeal to the republican principle of freedom as non-domination. I think it’s a good principle, and a good answer. And it’s always a good instinct to keep interview answers concise and focused on a couple of main points instead of trying to hit everything. But, I do think the answer can be usefully supplemented by bringing in a few further points we make in our book.
First, we have the traditional Marxist concerns about how deep the freedom of exit really goes. In a liberal capitalist society, you can apostatize from the Catholic Church so hard that you get Satan tattoos without facing any sanction worse than disappointing your family. But, if you don’t get some job, and you don’t have the economic resources to start your own business, you just don’t make a living at all. That compels you to return to capitalist employment in a way that nothing but your own guilty conscience might compel you to rejoin the Catholic Church.
Even if we somehow had full employment under capitalism, this would just make it easy to switch masters, not to do without a master entirely. And we won’t and can’t achieve sustained full or nearly full employment under capitalism, because an un-expropriated.capitalist class would never stand for such a fundamental boost to labor’s bargaining power.
Finally, it’s worth noting that the church/job analogy could be expanded beyond the issue of workplace democracy. Why have minimum wage laws (which legally prohibit employment contracts where capitalists offer lower wages and workers accept them), when after all subminimum-wage jobs aren’t legally mandatory? Why have workplace safety laws (which similarly restrict voluntary contracts to engage in dangerous labor) when workers can leave unsafe jobs without fear of imprisonment? After all, we wouldn’t want to criminalize unsafe off-the-clock pursuits like mountain climbing.
The answer is the same in all three cases. The crucial disanalogy between attending a hierarchical church and taking a hierarchical job is that, no matter how many other people choose to go to mass or confess their sins to priests, nothing about that in itself compels non-believers to join them. Similarly, even if mountain-climbing became an extremely popular hobby, no one who felt disinclined to take the risk would be pressured by economic incentives to take their chances on Everest instead of staying at home to order pizza and watch Netflix. Allowing employment contracts that sacrifice wage levels, safety, or workplace democracy is fundamentally different because it creates a Prisoners Dilemma dynamic where it’s often in the short-term interests of particular individuals to accept a bad deal, but it’s very much in the interests of everyone in that position to have a floor for which deals are on the table.This is the kind of reasoning that all mainstream liberals and even moderate conservatives accept as a matter of course in many instances. The interesting controversy isn’t about the principle itself but its application to the particular issue of workplace democracy. There, it seems to me that the interests being served by providing a floor for acceptable labor arrangements are inseparable from the value of freedom itself.That’s true in the republican sense of freedom Bhaskar emphasizes (independence from arbitrary power). It’s also true, though, in the sense of liberal individual autonomy. The day-to-day ability of workers to act the way they want to act would have to be curtailed somewhat in any economy. (In order to prevent industrial accidents, for example, sometimes people in factories really do need to do particular things at particular times.) But it’s severely curtailed in capitalist workplaces, where bosses often dictate things like whether workers can talk to each other about how much they’re being paid, or order them to smile when interacting with customers, or dictate when they get to go to the bathroom. The Catholic Church can’t do anything about that Satan tattoo but your boss sure can. These sharp edges can be smoothed to some extent through labor unions and the regulatory and welfare states, but so long as the basic power imbalance of capitalist production remains, the basic dynamics limiting workers’ day-to-day freedom never entirely go away.Workers’ control of the means of production wouldn’t be a panacea. Nevertheless, it would be a massive expansion of human freedom.
Thanks for reading Philosophy for the People w/Ben Burgis! This post is public so feel free to share it.
Coming out next fall from Verso!
Just how much Eric is playing devil’s advocate here and how much he really does disagree is somewhat ambiguous. Many of his sharpest questions are framed as things “a liberal” “might” say rather than as clear articulations of his own perspective, and in the past Eric has expressed some sympathy to me for at least Matt Bruenig’s ideas about “social wealth fund socialism” (whereby the government would become the owner of a critical mass of means of production by buying up corporate stock). While that idea isn’t as radical a departure from the status quo as what Bhaskar and Mike and I propose in the book, it exists in the same broad spectrum of ideas. At the same time, I think it’s a safe guess that Eric would at least need to be talked into the workability of our model, and that he sees at least less of a gap than we do between the desirabilities of our kind of “full” democratic socialism and ordinary social democracy. In any case, he described this as a “debate” so I’ve mirrored that framing here with the “vs.” in the title.
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