A New Socialist Economics: Heresy or Harbinger?

The first known use of the word "socialism" was by the French Protestant theologian Alexandre Vinet in 1831, in an article published in the journal Le Semeur (the sower). Since that time, those of us who have attached ourselves to that word have argued furiously, with others as well as amongst ourselves, about what that simple word (which Vinet used as a rather innocent antonym to individualism) is supposed to mean both for ourselves and our societies. In the following article, Socialist editor Andrew Hammer explores the issue of a new socialist economics in light of a new social and economic era.

Socialism is in a stage of deep awkwardness.

Internationally, the forces which comprise the democratic left now seem to be hovering in a dead zone, trying to find and redefine our collective soul, not to mention our face. Somewhere in between Marx, Mao, and Mitterand; that's where the general public tends to see us, and since that's a place the majority of people either don't understand or don't know about, we socialists are still more often than not dismissed as mythical relics of a recent past, who would rip the very core of individualism and initiative away from us all if only we were given the chance. Regardless of how well we may know otherwise, we still have one of the worst public relations problems of any group of like-minded individuals on the planet.

So how do we remedy that? If nothing else, the pregnant pause of the past three years (created by the collapse of a communism which masqueraded as socialism) has provided us all an opportunity to take a fresh look at what it is we have believed in for so long. The irony of these years is that social democrats and democratic socialists have been affected as much as communists by the so-called "death of communism." Rather than seizing on the opportunity to make the historic case for democratic socialism, the social democratic governments of Europe instead have chosen to capitulate to a neo-liberal, "market socialist" vision of the world which eschews much of its socialism for the sake of the market. But again, this could be a blessing in disguise, because it forces an important question. The question that we who continue to believe in the socialist ideal must ask ourselves today is, "What is socialism now and what does it mean to be a socialist?"

The modern origins of socialist thought are rooted in an analysis of the world that is nearly 150 years old. When Karl Marx put pen to paper and wrote the Communist Manifesto, his incisive analysis of mid-19th century capitalism planted a seed which grew to become the dominant challenge to the injustice and greed of a burgeoning industrialized world. Though the essential concepts of socialism predate Marx by hundreds of years, in the works of both religious and utopian radicals, his work has served as an inspiration to many working people who would go on to build both prosperous social democracies as well as autocratic nightmares of torture and poverty in his name. Clearly, Marx' genius was not in any prescription, but rather in his diagnosis of the social and economic ills of his day.

Most of the socialist history of the 20th century has been a story of internal conflict. For a movement aspiring to liberation and internationalism, it is stunning to consider how quickly that movement could so easily be held hostage to the despotic personalities of one nation. Lenin, Trotsky, and Stalin defined for the rest of us, whether we liked it or not, the way we would be seen by the world, and even while some of us would manage to overcome to create the social democratic welfare states of Europe, we would still have to constantly fight the stigma of an authoritarian USSR calling itself a "socialist" state. Twice in the past 25 years, the social democratic governments of western nations (Britain, Germany) have been toppled by scandals which falsely implicated their leaders as being sympathetic to the Soviet Union. No matter what democratic socialists attempted, they attempted it in the shadow of not only Washington but Moscow. So it's not all that surprising that when socialists lost their evil wayward cousin in 1991, they also lost the very entity with which they contrasted themselves. Put simply, rather than watching out for an enemy that's no longer there, now we have to look in the mirror. We have to start all over again.


When one raises the issue of a "new socialism," one of the first things likely to be heard in response is, "Why reinvent the wheel?" On the other hand, if one asks that respondent what exactly the wheel is, one is likely to receive a myriad of answers based upon many conditions, but most likely they will not necessarily be recent conditions.

Some will suggest a return to basic Marxism; however, we are living in a world where most people have not read Marx, and half of those who say they have are lying. Like it or not, that is our starting point. That's not to attack Marx or dispense with Marxist analysis; it is to say what is blatantly obvious to all but some on the left, that we are, 111 years after the man's death, definitely living in a post-Marxist era. What dead philosopher did Marx rely upon to give him his analysis of his mid-19th century world? (Hegel provided a methodological, not ideological point of departure.)

Why are we today any less capable of looking at our world in its present context, and forming both an analysis and some solutions to the problems at hand? Who will decipher our world tomorrow, you and I, or the personalities of 100 years past?

That said, in embarking on such a task, one should point out that the goal of any "new" socialism should not be to throw the baby out with the bathwater, but rather should involve the restructuring and rejuvenation of socialist economic theory to reflect today's conditions.

Obviously, a new socialism still begins with economics. However, the issue is not so much that of a totally new economics, as it is a new articulation of previous forms of socialist pluralism which if necessary will confront both the deceptive lure of market socialism on one hand, and the naive as well as outdated proposal of state ownership of all industry on the other.


Socialization (To Own or Not To Own)

By far the largest area of contention for not only the general public but also amongst socialists themselves is the issue of the social ownership of industry. While most socialists have for many years opposed a crude blanket nationalization of the economy, two arguments remain over the method and extent of which socialization should be implemented under a democratic socialist government.

The debate over method has for the most part been an amicable one, focusing more on the problems of centralization of power and decision making in the hands of a few bureaucrats, rather than whether or not social ownership is a good idea. Socialists have rather happily come to the conclusion (some more quickly than others) that any publicly owned entity must be as decentralized as possible to assure accountability and community control, while remaining centralized enough to ensure efficient delivery systems. A good example of such a model would be the public school system; everyone is guaranteed an education (the quality and extent of which are another issue) in publicly owned schools, which are budgeted and administered by electable, accountable school boards. Extending that model to health, utilities, communications, and other essential services would provide the top tier to a new socialist economy, where society's basic needs are guaranteed by the state, with the decision making and administrative power in the hands of those directly affected by the services, the community.

As to the issue of extent, some socialists are beginning to question the importance of social ownership itself, suggesting that accountability is more important than formal ownership. They suggest that the market has proven an ability to deliver goods and services in a way that government simply cannot, and their debate tends to revolve around which industries and services should be socially owned. In this view, the actual ownership of the means of production is irrelevant so long as the economy itself is made democratically accountable to the people. While this "market socialist" approach would leave health, education and utilities under public ownership, transportation, telecommunications, and most other large industries would remain in private hands, but would be strongly regulated to assure their allegiance to people before profits.

Collective Ownership (Cooperatives)

Cooperatives, both worker and consumer-owned, have long been popular among the socialist movement, and are an effective way to organize many forms of production and delivery. Yet cooperatives are by no means inherently socialist, if one defines socialism as requiring the absence of markets.

The main advantage of worker-owned cooperatives is that they provide for workers' ownership of industry, but this does not necessarily make them any more exempt from being exploitative of the consumer than other forms of enterprise, public or private, and therefore they cannot be relied upon as a pragmatic panacea in terms of implementing socialism. In most cases, worker-owned cooperatives function as privately owned businesses, owned by the workers, but not specifically accountable to the consumer. Consumer-owned co-ops assure accountability to their owners, but are not specifically obliged to be particularly concerned for the benefit of their workers. Further, if we accept that private ownership by groups of workers or consumers is compatible with a socialist economics, on what grounds can we withhold private ownership from individuals? If our answer is that we as Socialists never have denied private ownership to individuals (as indeed we haven't, but have actually supported it in terms of family farms and small businesses), then we should come out of the closet and articulate the socialist position on private ownership and enterprise in something more than knee-jerk or 100-year old romanticized language.

The Individual (Freedoms and Enterprise)

Is social ownership necessary to establish the socialist goal of freedom, justice, and social equality? Is enterprise in and of itself an evil, oppressive thing?

The 19th century debate over economic justice centered on issues of property and possessions, often coming down in favor of a classless society where all possessions were held in common. The anarchist argument, still offered today by many adherents, was that "property is slavery." But how many Socialists have heard, or gave thought to the words uttered by the American socialist Eugene Debs in a speech in Girard, Kansas in 1908, which could have just as easily been said today by any market socialist: "We have not come to destroy private property. We are going to establish private property- all the private property necessary to house man (sic), keep him in comfort, and satisfy his wants."

One of the historical flaws of socialist theory is that it has been so busy fighting off the oppressive, cancerous form of enterprise known as capitalism, that it has never sufficiently addressed the issue of enterprise itself. It's as if we weren't able to, for fear of being marked with a scarlet letter and excommunicated to the land of stockbrokers and bankers. However, in a 21st century world, where most people will not only want to own their own toothbrushes but also their own homes and often their own businesses, a socialist movement that cannot speak to the issue in anything but a nay-saying tone is at the same time horribly out of touch and not representative of the interests of most working people.

A point that is often lost in the high school government classes, and in the post-cold war parlance of daily life, is that capitalism and freedom of enterprise are not the same animal, any more than are slander and the freedom of speech. Enterprise is Annie's General Store; capitalism is the economic imperialism of the new Wal-Mart that has forced Annie to file for bankruptcy. The freedom of individuals to decide to work for themselves is a crucial aspect of any free society, and therefore any socialist society. The goal of a socialist society in this regard is then to ensure that enterprise and trade is fair and unexploitative of the people and their interests, and that the welfare of society is not endangered by the abuse of such enterprise by capital.

Even the Left Party of Sweden, which as a "communist" party predated the CPSU (Bolsheviks), and has always staked out the socialist position to the left of the Social Democrats, has now acknowledged a role for enterprise in their new socialist vision by stating: "Different kinds of companies are needed: state-run, municipal, cooperative, and private." It's time for socialists to be forthcoming about the relationship between diverse economic concepts and forms, in order that we may speak honestly to the conditions of our time in the same way that Karl Marx did to his.


The purpose in this article is more to raise the issue than to provide the answers; to put the cards on the table for a new deal. The old theoretical forms we hearken back to from time to time have become more poetry than policy; if we want to be effective, we have to find our own theories for our own day.

One view is put forward for consideration by this writer, however. That above all, we must learn to speak to today's working people in today's language. That means a language of pluralism, of abundant choices and options. No one approach to a socialist economy will alone be able to create the society we seek. That doesn't mean we have to shrink back from our ideals; we merely need to reapply them in a modern context.

It is wholly possible to create a socialist economy on our terms (and not those of the IMF and World Bank), where the essential services needed by all people are provided collectively through decentralized social ownership. Not only is it possible, it is morally the only right thing to do. It is possible to foster, invest in, and promote the cooperative ownership of most large industries, which are paradoxically privately owned by their workers, but can be held accountable by an informed and democratically regulated market. And it is possible to allow for the private enterprise of individuals who work alone or who employ the labour of others, while ensuring that workers' rights are paramount and that the productivity of enterprise is geared toward the good of the people before the pursuit of profit.

Socialism is and will continue to be larger than its economics or issues of ownership; the centuries-old ideals of social, political, and economic justice transcend the confines of one school of economic thought.

Yet ironically, it may very well be through an old theoretical instrument, the dialectic, that the nuances of private and social ownership will converge to play what will ultimately become a new socialist concerto. Let the music begin.

Andrew Hammer is an activist in the democratic socialist movement. He is Editor of Socialist, and communications director for the International League of Religious Socialists.