Mediaboss Marketing

Socialism is both an economic system and an ideology (in the non-pejorative sense of that term). A socialist economy features social rather than private ownership of the means of production. It also typically organizes economic activity through planning rather than market forces, and gears production towards needs satisfaction rather than profit accumulation. Socialist ideology asserts the moral and economic superiority of an economy with these features, especially as compared with capitalism. More specifically, socialists typically argue that capitalism undermines democracy, facilitates exploitation, distributes opportunities and resources unfairly, and vitiates community, stunting self-realization and human development. Socialism, by democratizing, humanizing, and rationalizing economic relations, largely eliminates these problems.

Socialist ideology thus has both critical and constructive aspects. Critically, it provides an account of whats wrong with capitalism; constructively, it provides a theory of how to transcend capitalisms flaws, namely, by transcending capitalism itself, replacing capitalisms central features (private property, markets, profits) with socialist alternatives (at a minimum social property, but typically planning and production for use as well).

How, precisely, socialist concepts like social ownership and planning should be realized in practice is a matter of dispute among socialists. One major split concerns the proper role of markets in a socialist economy. Some socialists argue that extensive reliance on markets is perfectly compatible with core socialist values. Others disagree, arguing that to be a socialist is (among other things) to reject the anarchy of the market in favor of a planned economy. But what form of planning should socialists advocate? This is a second major area of dispute, with some socialists endorsing central planning and others proposing a radically decentralized, participatory alternative.

This article explores all of these themes. It starts with definitions, then presents normative arguments for preferring socialism to capitalism, and concludes by discussing three broad socialist institutional proposals: central planning, participatory planning, and market socialism.

Two limitations should be noted at the outset. The article focuses on moral and political-philosophical issues rather than purely economic ones, discussing the latter only briefly. Second, little is said here about socialisms rich and complicated history. The article emphasizes the philosophical content of socialist ideas rather than their historical development or political instantiation.

Considered as an economic system, socialism is best understood in contrast with capitalism.

Capitalism designates an economic system with all of the following features:

An economic system is socialist only if it rejects feature 1, private ownership of the means of production in favor of public or social ownership. But must an economic system reject any of features 2-4 to count as socialist, or is rejection of private property sufficient as well as necessary?Here, socialists disagree. Some, often called market socialists, hold that socialism is compatible, in principle, with wage labor, profit-seeking firms, and extensive use of markets to organize and coordinate production and investment. Others, sometimes called orthodox or classical socialists, contend that an economic system with these features is scarcely distinguishable from capitalism; true socialism, on this view, requires not merely social ownership of the means of production but also planned production for use, as opposed to anarchic, market-driven production for profit.

This section explores the core socialist commitment to social ownership of the means of production. Other important aspects of socialismfor instance, its stance towards markets and planningare discussed in later sections (especially section 8).

Consider a societys instruments of production, its land, buildings, factories, tools, and machinery; consider also its raw materials, its oil and timber and minerals and so on. Together, these instruments and these materials comprise societys means of production. To whom should these means of production belong: to society as a whole, or to private individuals or groups of individuals? This is the central question dividing capitalists and socialists, with capitalists advocating extensive rights of private ownership of the means of production and socialists advocating extensive social or public ownership of these means.

Notice that the capitalist/socialist dispute does not concern the desirability of private property in items unrelated to production. The issue between socialists and capitalists is not whether individuals should be able to own personal property (for example, toothbrushes, houses, clothing, and other articles of everyday use) but whether they should be able to own productive property (for example, stores, factories, raw materials, and other productive assets).

But what does it mean to own something? Standardly, to own something is to enjoy a bundle of legally enforceable rights and powers over that thing. These rights and powers typically include the right to use, to control, to transfer, to alter (at the limit, even to destroy), and to generate income from the thing owned, as well as the right to exclude non-owners from interacting with the owned thing in these ways. Because these rights admit of gradations, so too does ownership, which is scalara matter of degreerather than dichotomous. In general, the wider ones rights of use, control, and so on over an object, the fewer restrictions one faces in exercising these various rights, and the wider ones ownership rights over that object. Ownership, notice, may be narrowed and restricted without ceasing to be ownership. Limited ownership is not an oxymoron.

Another important distinction here is that between legal and effective ownership. These can go together, as when a person owns her car both in law and in fact: she not only has the title, but also possesses actual powers of use, control, and so on over the vehicle. But so too can they come apart. The means of production belong to all the people, proclaimed the Soviet Unions constitution, but these were just words, for in reality democratically unaccountable bureaucrats and party officials grasped all the important economic levers. Something similar could be said of the relationship between shareholders in large capitalist corporations, on the one hand, and management and executives on the other: the former have paper ownership, but it is the latter that really exercise control. In general, it is effective rather than merely legal or formal ownership that is of interest in the present context. Capitalists and socialists alike want to realize their preferred patterns of ownership not just on paper, but also in reality.

To understand socialism, one must distinguish between three forms of ownership. Under private ownership, individuals or groups of individuals (for example, corporations) are the primary agents of ownership; it is they who enjoy the various rights of use, control, transfer, income generation, and so on discussed above. Under state ownership, the state retains for itself these rights, and is thus the primary agent of ownership. Both of these forms of ownership should be familiar to anyone who has frequented a business or driven on an interstate highway.

Much less familiar is the key socialist idea of social ownership. Social ownership of an asset means that the people have control over the disposition of that asset and its product (Roemer, A Future for Socialism 18). Social ownership of the means of production, then, obtains to the degree that the people themselves have control over these means: over their use and over the products that eventuate from that use. This is a conceptually simple idea, but it can be difficult to grasp its practical implications. How, in concrete terms, could social control over the means of production be realized?

Historically, socialists have struggled to answer this question, and for good reason: it is not at all obvious how meaningful control over something as massive and complex as a modern economy might be shared across tens or even hundreds of millions of people. Broadly speaking, socialists have identified two main strategies of socialization. The first seeks to socialize the economy by nationalizing it. The second seeks the same end by radically decentralizing and democratizing economic power. These strategies will be investigated in greater detail below (see section 8), but for now a few orienting remarks are in order.

First, regarding nationalization: state ownership functions as a vehicle for socialization only to the extent that the people are themselves in control of the state. Otherwise nationalization amounts to little more than statism, not socialism; it constitutes economic rule by state officials rather than by society as a whole. Any genuinely socialist program of nationalization, then, must adhere to a two-part recipe: nationalize the economy, but also democratize the state, thereby putting the people in control of the economy at one remove.

This second step has proven rather elusive in practice. It was not accomplishedindeed, it was not even really attemptedby the so-called socialist authoritarianisms of the 20th century such as the Soviet Union and China. And certainly considerable barriers to genuine democratization exist even in countries with longstanding liberal democratic traditions, such as the United States. These barriers include the awesome influence of special interests and concentrated wealth on the political process, corporate domination of political media, voter ignorance and apathy, and so on. Democracypopular control over the stateis, in short, an ideal easier praised than implemented, even under favorable conditions. However, these considerable practical problems aside, there seems to be nothing incoherent in principle with the idea of a genuinely socialistbecause genuinely democraticprogram of nationalization.

Or is there? Many socialists argue that state ownership can never fully realize socialisms promise, no matter how democratic the relationship between the people and the state. This is because real social ownership involves not only control-at-a-remove, so to speak, but also active involvement and participation. On this conception, it is not enough for democratically accountable politicians and bureaucrats to steer the economy in your name; rather, you must do (or at least have the real opportunity to do) some of the steering yourself. The core idea here is well expressed by Michael Harrington:

Socialization means the democratization of decision making in the everyday economy, of micro as well as macro choices. It looks primarily but not exclusively to the decentralized, face-to-face participation of the direct producers and their communities in determining the matters that shape their social lives (197).

In a socialist society, average, everyday people must be active rather than passive, empowered rather than subordinated, involved rather than excluded. But if this is what genuine socialization requires, then socialism is

not a formula or a specific legal mode of ownership, but a principle of empowering people at the base, which can animate a whole range of measures, some of which we do not yet even imagine (Harrington, 197).

The point is not that nationalization can never play a role in making socialism real, but that it cannot play the outsized role often assigned to it.

But if socialists should not rely exclusively on nationalization, to what else should they appeal instead? Different socialists will answer this question in different ways, as we will see in section 8. But most would recommend leavening democratically controlled state ownership with sizable helpings of workplace democracy (as found, for instance, in the Mondragon and La Lega cooperatives in Spain and Italy, respectively), social control over investment, and various other measures to economically empower local communities and individuals (for instance, the participatory budgeting process found in Porto Allegre, Brazil, through which citizens meet in popular assemblies to decide how the citys resources should be spent). By knitting together nationalization of major industries with these and other programs and initiatives, socialists hope to bring to fruition the truly audacious project of empowering people to take command of their everyday lives (Harrington, 197).

In principle, an economy could be wholly capitalist, statist, or socialist. An economy would be wholly capitalist just in case all its productive assets were privately controlled; wholly statist, provided all such assets were state-controlled; and wholly socialist, provided all such assets were socially-controlled. While these are coherent theoretical possibilities, they have not been implemented in practice. In reality, all economies are hybrids that blend together private, social, and state ownership. It is better, then, to think of capitalism, statism, and socialism not simply as all-or-nothing ideal types of economic structures, but also as variables (Wright, 124). According to this analysis, an economy can be more or less capitalist, socialist, or statist, depending on the particular balance it strikes between the three forms of ownership.

For example, even in the United Stateswidely seen as a bastion of capitalismthe state plays a considerable role in controlling economic activity and in distributing the proceeds thereof. Does this mean it is a statist or perhaps even a socialist economy? No. Economies should be individuated with reference to their dominant mode of ownership. Since capitalist ownership dominates the United States economymost of its productive assets being privately ownedit should be thought of as capitalist, albeit with some non-capitalist aspects. Similarly, an economy within which most productive assets are socially controlled should count as socialist, even if (as would almost certainly be the case) it also included statist or capitalist elements.

Although this article focuses on socialism rather than Marxism per se, there is an important distinction within Marxist thought that warrants mention here. This is the distinction between socialism and communism.

Both socialism and communism are forms of post-capitalism. Both feature social rather than private ownership of the means of production. Both, within Marxist orthodoxy, reject market production for profit in favor of planned production for use. But beyond these important similarities lie significant differences. In the Critique of the Gotha Progam, Marxs fullest discussion of these matters, he divides post-capitalism into two parts, a lower phase (later called socialism by followers of Marx) and a higher phase (communism). The lower phase follows immediately on the heels of capitalism, and so resembles it in certain ways. As Marx memorably puts this point, socialism is in every respect, economically, morally and intellectually still stamped with the birth marks of the old society from whose womb it emerges (Critique of the Gotha Program 614). These capitalist birth marks include:

So in all of these ways, the lower phase of post-capitalism resembles its capitalist predecessor. Over time, however, these capitalist birth marks fade, all traces of bourgeois attitudes and institutions vanish, and humanity finally achieves the higher phase of post-capitalist society, full communism.

What would full communism be like? Marx never answered this question in detailand indeed, he disparaged as utopian those socialists who focused excessively on drawing up recipes for the kitchens of the futurebut from his brief remarks about communist society certain broad outlines can be discerned. Perhaps his most famous description of communism comes in the following passage from the Critique of the Gotha Program:

In a higher phase of communist society, after the enslaving subordination of the individual to the division of labor, and therewith also the antithesis between mental and physical labor, has vanished; after labor has become not only a means of life but also lifes prime want; after the productive forces have also increased with the all-round development of the individual, and all the springs of cooperative wealth flow more abundantlyonly then can the narrow horizon of bourgeois right be crossed in its entirety and society inscribe on its banner: from each according to his ability, to each according to his needs (615):

Unpacking this passage, we see that Marx makes all of the following claims about communism:

Not only will communism (unlike socialism) do away with class, material scarcity, and occupational specialization, it will also do away with the state. As noted above, the state begins to wither away under socialism. But this process is not completed until the higher phase of full communism, for it is only in that phase that lingering class antagonisms are finally eradicated. With these antagonisms cleared away, the state has nothing to dono class conflict to manage, no further function to performand so, like a vestigial limb, it gradually atrophies from disuse. Or, as Engels famously puts this point in Socialism: Utopian and Scientific,

State interference in social relations becomes, in one domain after another, superfluous, and then dies out of itself; the government of persons is replaced by the administration of things, and by the conduct of processes of production. The state is not abolished. It withers away (91).

In sum, within Marxist theory socialism and communism are very different indeed. Although both eradicate private property and profits, only the latter also eliminates the division of labor, the state, material scarcity, and perhaps even conflict itself. It is only under communism that mankind completes its ascendance from the kingdom of necessity into the kingdom of freedom (Engels 95).

Is socialism worthy of allegiance, and if so, why?

The standard normative argument for socialism is comparative. Socialists typically single out certain moral and political values, argue that these values are poorly served under capitalism, and then support socialism by contending that these values would fare betternot necessarily perfectly, but betterunder socialism. Values drawn upon by socialists vary, but usually include democracy, non-exploitation, freedom (both formal and effective), community, and equality. Sections 47 discuss these values and their alleged connections with socialism.

But before turning to these explicitly normative arguments, a word should be said about the purely economic case for socialism. (Since this articles focus is normative rather than economic, this section will be brief.) Capitalism, many socialists hold, is wild and wasteful, prone to great booms and tremendously destructive busts. The argument goes like this: capitalist competition greatly augments societys forces of production. Each firm, merely to stay in business, must innovate. As a result, productivity soars. Ever more output can be produced for ever fewer inputs, labor included. Abundance looms.

But this very abundance, paradoxically, is an economic problem. Gluts drive down prices as supply overwhelms demand. Profits decline. Firms, forced to cut costs, sack workers and slash wages. As unemployment and economic insecurity mount, demand plummets still further: people simply dont have much money to spend. With reduced demand comes reduced opportunities for profits, hence, reduced production. What was a boom has turned into a bust, and society faces the absurd spectacle of idle farms next to hungry people; empty shoe factories beside shoeless workers; foreclosed houses alongside the homeless.

Capitalism, then, makes possible universal abundance. But its central featuresmarket competition, the pursuit of profits, and private propertyensure that this possibility will never be realized. In Marxist language, there is a deep contradiction between capitalisms forces of production and its relations of production, a contradiction that nothing short of socialist revolution can solve. Society must overthrow capitalist productive relations, replacing anarchic market production for profit with planned production for use. Only then will humanity eliminate the ridiculous concatenation of vast productive potential alongside vast unmet needs. Or so the socialist argument goes.

Socialists find further economic faults with capitalism. Capitalism misallocates resources towards producing what is profitable rather than what is needed. True, what is needed can sometime be profitable. But often the two categories come apart. Think, the socialist will say, of the vast resources spent producing luxuries for the rich, while the needy go without. Or consider the underproduction of critical, but unprofitable, antibiotics, even as lifestyle drugs (like Propecia, for baldness) roll off the production line.

Capitalism is also inefficient in its use of human labor power. Capitalism functions best when there exists a reserve army of the unemployed, in Marxs phrase. The credible threat of unemployment reduces workers salary demands and increases their work effort. But unemployment means idle workers: able bodied people, willing to work, who cannot find an outlet for their productivity. This is a waste, and it would not exist under socialism (or so it is claimed.)

Further, capitalism allows an entire segment of the (able-bodied) population to live without working: namely, the independently wealthy, who can simply live off investment income. This, again, is wasteful; were these people recruited into the labor process, labor time for the rest could decline. Finally, capitalism misdirects the labor of many of those it does employ. Just think, the socialist will say, of the legions of lawyers, advertisers, marketers, and financial workers. Such workers (and others beside) perform no real productive function. Their jobs are necessary only within the framework of capitalism itself. In a socialist economy, there is no need for marketing, financial speculation, or lawyers specializing in mergers and acquisitions. Socialism would free people currently doing these tasks to apply their talents in a more useful way. Marketers could become teachers; financiers, farmers. And we would all be the better for it.

In sum, socialists seek to upend the common sense view of capitalism. Most people take it for granted that whatever its normative flaws, at the very least capitalism delivers the goods, so to speak. Not so, replies the socialist. Because it is prone to economic crises, and is wasteful and inefficient in its use of the means of production (including human labor), capitalisms economic bona fides must be questioned.

The article turns now to the normative case against capitalism and in favor of socialism, starting with democracy.

Democracy means rule by the people, as opposed to rule by the rich, or rule by the excellent, or, more generally, rule by any part of the people over the rest. Systems plausibly claiming to be democratic can vary along at least three dimensions. They can bring a broader or a narrower range of issues under democratic jurisdiction; their members can be more or less directly involved in the exercise of political power; and they can insist upon greater or lesser equality of influence (or perhaps opportunity for influence) over political processes. Call these the scope, involvement, and influence dimensions, respectively.

Other things being equal, as involvement, scope, and equality of influence increase, so too does democracy. Thus it can make sense to say that one democratic system is more democratic than another. So too, it is possible to compare different democratic ideals in terms of their democratic-ness. A principle or ideal that insists upon maximal equality of influence, for instance, is (other things equal) more democratic than a principle or ideal that does not.

Socialists are radical democrats. They do not merely profess rule by the people; they also interpret that ideal in a highly democratic way, opting for maximalist or near-maximalist positions along all three of the just-mentioned dimensions. They want democracy to have very broad scope; they want citizens to be highly involved in democratic processes; and they want citizens to have roughly equal opportunities to influence these processes. And they typically argue, further, that the democratic ideal, understood in this rich and demanding way, militates against capitalism and in favor of socialism. This article will focus on the scope and influence dimensions.

To see this argument, consider first the scope dimension of democracy, which concerns the question: where should the boundary between public and private, between politics and civil society, be drawn? Which issues should be subject to democratic choice? Many socialists endorse something like the following principle:

All Affected Principle: People affected by a decision should enjoy a say over that decision, proportional to the degree to which they are affected.

However, it is a rather short stepor so say socialistsfrom this intuitively plausible principle to the radical conclusion that economics should be subordinated to democracy, that large swathes of economic life should be politicized and brought under popular control. All that is required to make that leap is the seemingly incontrovertible premise that many economic issues affect the public. When a local business fires 20% of its workers, this affects the public. When financiers withdraw support for a new shopping center, this affects the public. When societys productive assets are deployed to make yachts for millionaires rather than affordable housing, this affects the public. When corporations pull up roots and relocate production to greener pastures, this affects the public.

In all of these cases (and many others besides), peoples lives are affectedindeed, often profoundly affectedby economic decisions. Do they get a say in these decisions, as required by the All Affected Principle? Not under capitalism, which grants extensive control over such matters to holders of private property rights. Where private property reigns, owners rather than affected parties decide, for example, whether to hire or fire, to invest, to relocate, and so on. From the socialist point of view, this is a serious offense against democracy. Capitalism, socialists claim, depoliticizes what should remain political; it cedes far too much control over common affairs to private parties. It is, in this way, insufficiently democratic.

But if the root cause of this democratic deficit is private control over productive assets, then the solution, or so socialists argue, must be social control over the same. Social property brings into the democratic domain what private property improperly removes. What touches all must be decided by all; economic matters touch all; therefore economic matters must be decided by all. This is the simple but powerful democratic syllogism at the heart of one major argument for socialism, for social rather than private control of the economy. What might social control over the economy look like in practice? Section 8 explores competing answers to this question.

Socialists find further grounds for rejecting capitalism in democracys influence dimension. Standardly, democracy is held to require not merely that all citizens have a say, but that they have an equal say. But what does this really mean? To clarify, suppose that A and B have equal voting rights, but A, being rich, educated, and leisured, has a greater chance to influence the political process than B, who is poor, uneducated, and short on free time (he must work long hours to make ends meet). Do A and B have an equal say, in the sense required by democracy?

Nearly all socialists, and indeed, many non-socialists, would say no; they would detect a democratic deficit in this scenario, for they typically see democracy as requiring not merely formal equality of opportunity for political influence but also substantive or fair equality of opportunity for political influence. On this view, it is not enough for A and B to enjoy identical legal protections to vote, to run for office, to engage in political speech, and so on. Instead, genuine democracy requires (over and above this merely legal equality) that equally talented and motivated citizens have roughly equal prospects for winning office and/or influencing policy, regardless of their economic and social circumstancesor something along these lines.

Now, capitalism clearly can implement formal political equality. Many capitalist societies grant their citizens equal rights to vote, to run for office, and so on. But can capitalism implement substantive political equality?

Many socialists think not. Capitalism, they point out, generates steep economic inequalities, dividing society into rich and poor. But in a variety of ways, the rich can translate their economic advantages into political ones. This translation can occur relatively directly, as when the rich buy political influence through campaign contributions, or when they hire lobbyists to steer legislative priorities (sometimes going so far as to draft laws themselves). Or it can occur relatively indirectly, as when the wealthy use their ownership of media to shape public opinion (and thus the political process), or when capitalists threaten to take their money out of the country in response to disliked (usually leftist) policies, thereby limiting what government can do.

But whether moneyed interests affect politics directly or indirectly, the net result is the same: capitalism amplifies the voices of the rich, enabling their concerns to dominate the political process. Indeed, some socialists, pressing this objection to its logical conclusion, contend that democracy under capitalism is really little more than oligarchyrule by the richcovered by a democratic fig leaf. Or, as Vladimir Lenin put this point: Democracy for an insignificant minority, democracy for the richthat is the democracy of capitalist society (79).

Sophisticated defenders of capitalism respond by arguing that capitalisms democratic deficits can be repaired within a fundamentally capitalist framework. Campaign finance reform, regulation of lobbying, restrictions on corporate domination of media, even limitations on the movement of capital across borders would, together, do much to restore or preserve political equality amidst capitalist economic inequality, and yet none of them are incompatible with capitalism per se. It follows (capitalists argue) that there is no need to throw out the baby of capitalism with the bathwater of political inequality. Sufficiently reformed, capitalism can indeed realize not just formal political equality but also substantive political equality.

The question, socialists would reply, is whether these reforms would ever be chosen by political elites under capitalism. Will capitalist oligarchs willingly undercut the very basis of their rule by socializing control over mass media, installing real campaign finance reform, limiting capital flows, and so on?

Would socialism perform any better than capitalism on this influence dimension of democracy? Would it enable equally talented and motivated citizens to have roughly equal prospects for influencing politics? Socialists argue that it would. Because it eliminates class, socialism eliminates the major threat to substantive political equality. (Of course, other forms of exclusion, such as racism and sexism, must also be overcome.) Wealthy property owners will not dominate the political process at the expense of the poor and unpropertied because the latter will be an empty set. Everyone will be a wealthy property owner, in the sense that everyone will share control over the means of production and will have access to a dignified standard of living. Everyone will therefore have roughly equal economic resources to bring to bear on the political process.

Put differently, whereas capitalism attempts to secure political equality despite massive economic inequalities, socialism attempts to secure political equality in large part by eliminating these inequalities.

According to many socialists, one of capitalisms central moral failings is that it is exploitative. Socialism, by contrast, would not be exploitativeor so these socialists allegeand this is one of the main reasons for preferring it to capitalism.

But what is exploitation? Is capitalism truly exploitative? And would socialism really eliminate exploitation? This subsection explores socialist answers to these questions.

Although there is no universally accepted account of exploitation, Jeffrey Reimans Marx-inspired suggestion that exploitation is a kind of coercive prying loose of unpaid labor provides a good framework for discussion (3). On this account, a person is exploited if and only if she is forced to work for free. Feudal serfs, for example, were exploited because they were legally and physically compelled, at sword-point if necessary, to spend part of their working time toiling in the lords fields for nothing in return. This was forced, unpaid labor of the most obvious sort, and it constituted a serious form of exploitation.

But are capitalist employees exploited? At first glance, it would appear not. Workers get paid wages, so it doesnt seem as if they are working for free. Nor does it appear that workers are forced to work. Capitalism, being a system of free labor, grants workers ownership over their labor power and entitles them to sell itor notas they please. So where is the force supposedly inherent in the capital/worker relationship?

Take the issue of force first. In general, a person is forced to do something X whenever she has no reasonable alternative to doing X. Workers, then, are forced to sell their labor power to capitalists just in case they have no reasonable alternative to doing so. But of course they dont have a reasonable alternative, or so some socialists contend. Their argument is simple. Everyone must make a living. There are, under capitalist property relations, only two main ways to do this: one can live off of investment or property income, or one can live off of wages. By definition, workers cannot pick this first option; they dont own means of production, so they cant live off of income generated by such ownership. This leaves wage labor as the only acceptable option. True, workers are formally free to decline capitalist employment, but this does not represent a reasonable option since its consequences are so dire: starvation or, in more enlightened circumstances, life on the dole. Workers therefore have no minimally reasonable choice but to sell their labor power to owners of means of production.

It follows that workers are forced to work for capitalists, even if they are not so forced by capitalists (or indeed, by anyone else). The forcing in question is structural rather than agential; as Reiman explains, it is an indirect force built into the very fact that capitalists own the means of production and laborers do not. Or, as Marx puts this point, it is the the dull compulsion of economic relations rather than direct force that completes the subjection of the laborer to the capitalist (Capital Vol. I, 737).

Not all socialists accept this argument. G.A. Cohen, for example, suggests that individual workers do have a reasonable alternative to selling their labor power: they can become capitalists themselves (The Structure of Proletarian Unfreedom). Not overnight, perhaps, but with enough scrimping and saving, is it not possible for an individual worker to start a business of her own? Cohen concludes that individual workers are not forced to sell their labor power. (He also argues that workers are collectively unfreeunfree as a classsince not all, or even many, workers can escape their class at the same time; the economy can absorb only so many small business owners at any given moment. But this alleged collective unfreedom of workers, though interesting and important, is peripheral to our present topic and so must be set aside.)

In response, some socialists question whether opening a small business really represents a reasonable option for most workers. For one thing, many workers simply cant save enough to open such a business: their wages are just too small relative to the cost of living. For another, even if a worker is able, through years of thrift, to open his own business, most businesses fail, often leaving the owner much worse off financially than she would have been had she simply remained a wage laborer. Pulling together these ideas, one critic of Cohen concludes that escaping into the petty bourgeoisieis a reasonable alternative only for a tiny minority of workers. Thus the vast majority of working-class individuals are forced to sell their labor power to earn a living (Peffer, 152).

But even if Cohen is wrong, and individual workers are forced to sell their labor power, notice that it does not yet follow that workers are exploited. For forced labor alone does not exploitation make. Exploitation, as described above, involves forced, unpaid labor. Let us turn, then, to the issue of compensation, and in particular, to the question of whether workers toil (at least in part) for free.

Again, surface appearances cut against the socialist position. Wage laborers standardly receive an hourly wage. If they work, say, eight hours, they get eight hours pay. It certainly seems, then, that workers receive full compensation for their toil. Perhaps this compensation is unfairly low, but that is a different issue: the exploitation charge, standardly construed, is that workers are forced to work for no pay, not that they are forced to work for low pay.

But probe more deeply, some socialists contend, and the unpaid nature of much work under capitalism becomes clear. To see their argument, it helps to start with an easier case: feudal production. Under feudalism, serfs spent part of their working time working in their own fields and the rest working in their lords fields. They kept whatever they could grow on their own plots, and surrendered whatever they grew on the lords. Put differently, serfs received compensation for part of their working time, but no compensation at all for the rest of it. A great deal of their work, then, was wholly unpaid: a fact that was very obvious to all involved, given the physical separation between paid work (on the serfs fields) and unpaid work (on the lords).

Marxists argue that precisely the same division between paid and unpaid work exists under capitalism. Workers spend the first part of their working day working, in effect, for themselves. This is the part of the day during which they produce the equivalent of their wages. Marx calls this necessary labor time. But the working day does not stop there. Indeed, it cannot stop there, for if it did, there would be no surplus product for the capitalist to appropriate, and thus no reason for the capitalist to hire the worker in the first place. So the capitalist requires the worker to perform surplus labor, which is just labor beyond necessary labor: labor beyond what is required to produce value equivalent to the workers wage. The value produced during surplus labor time, Marx calls surplus value. Crucially, this surplus value belongs to the capitalist rather than the worker, and is the source of all profits.

To illustrate, consider a worker who produces 1 widget per hour over the course of an eight-hour shift, thus yielding eight widgets in total. Her boss takes these widgets, sells them, and then returns part of the proceeds to the worker in the form of a wage. But this wage must be less than what the capitalist reaped by selling the widgets. Otherwise the capitalist would have nothing left over as profit. To fix ideas, suppose that the workers daily wage is equivalent to the value of 2 widgets. To produce this value, she had to toil for 2 hours (at 1 widget per hour). Yet her shift lasts 8 hours. It follows that she spent 2 hours working for herself, and 6 hours working for her boss: which is to say, 6 hours working for free.

We can now appreciate Marxs remark that the secret of the self-expansion of capital [that is, the secret of profit] resolves itself into having the disposal of a definite quantity of other peoples unpaid labor (Capital Vol. I, 534). Profits, on Marxist analysis, are possible only through the extraction of unpaid surplus labor from workers. Wage workers toil gratis no less than serfs. That the division between paid and unpaid labor under capitalism is temporal rather than physical or spatial (as under serfdom) makes this division harder to see, but it does not in any way diminish its realityor so the socialist argument goes.

How exactly is socialism supposed to eliminate exploitation? Notice that it would not eliminate work itself, as Marx writes, Just as the savage must wrestle with Nature to satisfy his wants, to maintain and reproduce life, so must civilized man, and he must do so under all social formations and under all modes of production (Capital Vol. III, Ch. 48). So even under socialism, work must be done.

However, it does not follow that people must be forced to do it. Society could eliminate the compulsion to labor by partly decoupling income (or access to basic resources more broadly) from work. Philippe van Parijss unconditional basic income represents one way to achieve this decoupling. On his proposal, which has attracted significant support from socialist quarters, each citizen, no matter how rich or how poor, would be paid a monthly income, set as high as possible, and in any case sufficient to live with dignity. This income would come without any strings attached. In particular, it would not be conditional on working, seeking work, or training for future work. It would go to all members of the political community: leisured surfers off of Malibu no less than industrious steelworkers in Pittsburgh.

Perhaps the economic feasibility of such a proposal may be questioned. But for present purposes, the important thing to appreciate is the way in which a UBI (as it is known) gives each person the real freedom to drop out of the paid labor force, thereby eliminating both the compulsion to work and (therefore) exploitation.

From a socialist perspective, there are at least two potential problems with this way of eliminating exploitation.

First, a UBI enables people to live off the hard work of othersno reciprocation required. Again, surfers get the check no less than people with paid employment. But socialists complain when capitalists live off the work of others; shouldnt they complain when surfers (and so forth) behave similarly?

Second, there is nothing uniquely socialist about a UBI. Capitalist no less than socialist societies can implement a UBI, thereby enabling everyone to live decently without working. A defender of capitalism might therefore insist that when it comes to exploitation, capitalism and socialism are on all fours: both are equally susceptible to exploitation and equally able to enact the policies needed to eliminate it.

In response, socialists might point to the second necessary feature of exploitation, non-compensation. Notice that compensation takes many forms. Acquiring exclusive control over a sum of money, or over a bundle of resources, is one of them. But so too is acquiring a share of control over resources. Say that you and I work to build a tree house which we then jointly control. Neither of us has exclusive say over the tree house. And yet it would be wrong to conclude that our labors have gone uncompensated. We have been compensated; its just that our compensation comes in the form of common rather than private property.

This is precisely the sense in which all labor is compensated under socialism. Workers own the means of production together; they (therefore) own the surplus generated by these means. True, they do not own this surplus privately. They share control over its disposition and use. But shared control can be a form of compensation no less than private control.

Under capitalism, workers have private ownership over their wages (and the things these wages buy) but no ownership at all over most of what they produce. This is the sense in which most of their laboring activity goes uncompensated. Workers produce a surplus, hand it over to capitalists, and are then cut out of the picture; their bosses are free to do with the surplus whatever they like: consume it, invest it, burn it, and so forth. Under socialism, by contrast, workers have private ownership over their wages (or, in a money-less economy, over resources for personal use) and collective ownership over the social surplus they produce. They both make the surplus and share control over how to use this surplus. At no point, then, are socialist producers toiling for free, since their labors go towards building an economy that is shared and controlled by all. Its as if everyone made a gigantic tree house that everyone is then free to use and to help govern.

So, contrary to the capitalist objection raised 4 paragraphs back, it seems that socialism is uniquely well positioned to eliminate exploitation. Both socialism and capitalism could, in principle, eliminate forced labor by attenuating the link between income and work. But only socialism can ensure that all work is compensated through common ownership of the social surplus. Thus socialism expunges exploitation from economic life even absent something like a UBI, whereas the same cannot be said of capitalism.

Against this argument, critics might reply that the kind of compensation for surplus labor promised by socialism is wholly inadequate. Under capitalism, the workers surplus is appropriated by the capitalist; under socialism, the workers surplus is appropriated by society. From the workers point of view, this may seem a distinction without a difference. Both appropriations rob the worker of effective control over the fruits of her labor. True, under socialism the worker is a member of the group doing the appropriating, but, as merely one of millions of such members, her individual influence over that group is infinitesimal. Is it plausible to regard her tiny sliver of decision-making power over the surplus as compensation for her surplus labor? Arguably not, in which case socialism does not actually eliminate exploitation.

Many socialists point to considerations of freedom, broadly understood, to support socialism over capitalism.

Freedom comes in many varieties. This article will discuss two. Formal freedom involves the absence of interference. Effective freedom involves the presence of capability. A person who is unable to walk has the formal freedom to ascend a steep flight of stepsassuming that no one will interfere with her attemptbut lacks the effective freedom to do so.

It is sometimes suggested that socialism fares poorly with respect to formal freedom. There are two main grounds for this contention, one historical, the other conceptual.

Historically, many countries claiming to be socialist trampled basic liberties such as freedom of expression and religion. They imprisoned and killed political dissidents and other enemies of the people. Far from being free societies, they were deeply oppressive ones.

Some critics of socialism suggest that this historical correlation between socialism and oppression was no accident. Rather, it reflects a deep flaw in socialisms design. Socialism concentrates economic and political power in the hands of the state. Abuse is inevitable under such conditions. Milton Friedman, building off of this insight, famously posited a necessary connection between capitalism (which, unlike socialism, disperses economic power rather than concentrating it) and freedom: not all capitalist societies are free, but all durably free societies must be capitalist.

Socialists concede the heart of Friedmans point, but argue that it does not undermine their position. Friedman, they say, was right to warn against excessive centralization of power. But he was wrong to suggest that socialism necessarily requires said centralization. The contemporary socialist ideal is profoundly democratic and decentralized; it seeks to disperse economic power, not concentrate it. It aspires to an economy and a society controlled from the broad bottom, not the narrow top. So the kind of socialism that contemporary socialists embrace is simply different than the kind of socialism targeted by Friedmans critique. Put differently, Friedmans worry attacks a view held by very few socialists todayor so it might be argued.

Turning to a different objection, it is sometimes suggested that on purely conceptual grounds socialism is a more restrictive society than capitalism. The argument for this claim is simple. Capitalism permits private ownership of productive assets; socialism does not. Socialism therefore provides less formal freedom than capitalism. It interferes with various economic activities that capitalism allows. Thus, if what you value is formal freedom, then you should prefer capitalism to socialism.

The trouble with this argument, as pointed out by G.A. Cohen, is that it see[s] the freedom which is intrinsic to capitalism [but not] the unfreedom which necessarily accompanies capitalist freedom (Capitalism, Freedom, and the Proletariat 150). Capitalism does indeed allow some things that socialism forbids: for example, opening a business. But the converse is also true. To use Cohens example: I am free to pitch a tent on common land. I am not free to pitch a tent on land that you own privately. Should I try, the state will interfere, thereby reducing my formal freedom. Private propertys effects on formal freedom, then, are not uniformly positive, but mixed. Private property extends formal freedom to owners even as it withdraws it from non-owners. As Cohen writes, To think of capitalism as a realm of freedom is to overlook half its nature (Capitalism, Freedom, and the Proletariat 152)

Of course, precisely the same can and indeed must be said of socialism. All systems of property, whether capitalist or socialist, exert complex effects on formal freedom; all such systems necessarily distribute both freedom and unfreedom. But in light of this complexity, our guiding question herewhich system, capitalism or socialism, provides more formal freedom?is probably unanswerable. All we can say with confidence is that these systems provide differently shaped zones of formal freedom; each extends formal freedom in some ways while restricting it in others. However, it seems extremely difficult, perhaps impossible, to determine which of these zones is larger overall. At the very least, defenders of capitalism must say a great deal more to establish that capitalism is, a priori, a freer society than socialism.

Socialists score this particular fight a draw.

Whereas socialists tend to play defense regarding formal freedom, they go on offense when discussing effective freedom.

Effective freedom, again, involves the capacity to accomplish ones ends. This implies but goes beyond formal freedom. Say that my goal is to complete a marathon. One way I can fail to accomplish this goal is by meeting with agential interference. If you physically restrain me from participating in the race, you undermine my effective freedom by undermining my formal freedom. However, effective freedom usually requires much more than the mere absence of interference. I can actually complete a marathon, for example, only if a host of further conditions are in place. Some are broadly social: I must live in a society in which marathons occur. Others are broadly economic: I must be able to afford all the costs associated with training for the race, traveling to the race, entering the race, and so forth. And there are physical or internal factors as well. I cant finish the marathon unless I have sufficient mobility and endurance. All of which is to say that effective freedom depends upon a wide range of factors, many of which have nothing to do with human interference per se.

Now, in a good and just society, which effective freedomswhich capabilities, as they are sometimes calledwould people have? The typical socialist response runs as follows. At a minimum, everyone must have the effective freedom to meet their basic needs for food, shelter, health care, and so on. With these capabilities in place, people are able to survive. This is a crucial accomplishment, and one demanded by minimal standards of justice and decency. However, a truly good society must set its sights higher; it must enable people not merely to survive, but also to flourish.

See more here:
Socialism | Internet Encyclopedia of Philosophy