Monday, July 18, 2011

How I found Market Socialism and became a Wikipedian

Note for the initiated Market Socialist: the following post could appear basic and introductory, and that was its purpose.  I think that it is nevertheless informative and it can promote discussion and raise questions between many readers.  I hope that in the future I can stir your curiosity with advanced points, but to run, I must first learn how to walk.  Thank you for your patience. 

I always suspected that capitalism had some dark issues under its rug.  And living in a developing country it was very easy to see the failings of the system.  Growing up in Latin America, the gap between the haves and the have-nots is so obvious that I started wondering about it from a young age.  Some people will be convinced that inequality is the result of a meritocratic system firmly in place that rewards the intelligent and the productive (and they like to think that they are part of that group).  I tend  to think that most of us, however, can see that rewards and labor are not correlated, that the distribution of the profits generated by work is skewed towards some individuals that do not participate in the actual effort to produce them. You don´t need to read Marx to understand that some serious corrections to the way on which our current economic system works is needed to make the most of our short lives.  So where is the solution? If you are reading this you are not new to the question.  It had been the quest of my life to try to find the best answer possible, the one that we can implement to see results in this Century.

In the yearly years of this decade, after many university courses on Political Economy, and discussions about Marxism and Neo-Classic economists, I stumbled upon a book by David Schweickart that changed my academic life.  The book was called "Against Capitalism", and presented in its first chapters a well-thought account of the many reasons to replace Capitalism with a better system, with economic and ethical arguments to prove the point.  I was flabbergasted, since I felt that finally somebody gave me the tools to counter-attack the common rhetoric shields utilized by the apologists of the system, and that even had the audacity to present an alternative that solved the problems related to innovation and fairness in the archaic socialist models.  What was not to love about that?  Quickly I decided to look more into the subject, and then I found myself deep into a myriad of possible forms of the organization of the economy under democratic principles. However, without a comparison between them and with many schools of thought utilized in their construction, the well-intended ideas seemed more like an abstract cloud of goodwill than a coherent whole that could be put into practice.

For starters, the Wikipedia page on the subject was completely inadequate, and after more than three years since created it looked like this:

Wikipedia version of "Market Socialism" as of 13:55, 12 April 2005

Market socialism is an attempt by a Soviet-style economy to introduce market elements into its economic system to improve economic growth. It was first attempted during the 1920s in the Soviet Union as NEP, or the New Economic Policy, but soon abandoned. Later, elements of "market socialism" were introduced in Hungary (where it was nicknamed "goulash socialism"), Czechoslovakia and Yugoslavia (see Titoism) in the 1970s and 1980s. Modern Vietnam and Laos also describe themselves as market socialist systems. The Soviet Union attempted to introduce a market socialist system with its perestroika reforms under Mikhael Gorbachev prior to the collapse of the USSR in 1991.
Historically, market socialist systems attempt to retain government ownership of the "commanding heights of the economy" such as heavy industry, energy, and infrastructure, while introducing decentralised decision making and giving local managers more freedom to make decisions and respond to market demands. Market socialist systems also allow private ownership and entrepreneurship in the service and other secondary economic sectors. The market is allowed to determine prices for consumer goods and agricultural products and farmers and sometimes other producers are allowed to sell all or some of their products on the open market and keep some or all of the profit as an incentive to increased and improved production.
However, the Chinese experience with market socialism is another situation. The system introduced in the People's Republic of China by Deng Xiaoping in the late 1970s and has evolved into what some economists, outside of China, would argue is modern Chinese capitalism. See Socialism with Chinese characteristics.

From this definition we are able to understand that marksoc include decentralization and it is a different system than central planning.  There is also the hint that the system could be more efficient than it, but there is no clue about how it would fare against capitalism.  At this point, I felt that I could add to the wikipedian process by integrating into the article the version that Schweickart was advancing in his book.  This led to a lengthy discussion with fellow editors, antagonistic about the supposed virtues of this "new" socialism. The discussion can be read here, here, and here, where I write under the name of "Horzer". Take into account that at the moment (2005) I was still convinced of the validity of Marx´s "Labor Theory of Value" as a central justification for the necessity of Economic Democracy, which could not be the case anymore.

The last paragraph of this old page begs the question: is marksoc the system utilized in contemporary China?  David Schweickart seems to think so (Bertell Ollman ed., 1998, pg. 7-10), meaning that there is a difference between market socialism as he understands it and a specific kind that Sckweickart calls "worker-self-managed" market socialism.  Schweickart identifies three main characteristics of capitalism: it is a market economy (the prices and quantities of goods and services are determined in a free market), the means of production are privately owned (I would add that are owned by a capitalist that is entitled to its profits), and there is wage-labor.  In the case of a marksoc system, we obviously still have a market economy, but the means of production can be owned by the State or the workers.  The inclusion of the State in his definition brings him to the point alluded above: "It may or may not replace wage labor with workplace democracy, wherein workers get, not a contracted wage, but specified shares of an enterprise's net proceeds" (p. 10).  This strange laxity in Schweickart´s definition, is criticized by Kamram Nayeri in his review of this book, when he states that: "Schweickart (...) clearly is content to limit it {marksoc} to a society with a relatively more egalitarian distribution of resources and incomes".  If we believe that a marksoc economy must contemplate democracy in the workplace, as is the position of this blog, the Chinese system cannot be considered as market socialist unless most of the production is made in companies with this characteristic.  Only then can I equate marksoc with Economic Democracy.

Finally, I let to you to peruse the definition found nowadays in the Wikipedia page, and to make the changes that you, the reader, consider necessary to make it more exact and representative of the currents grouped under its wings.  All and every comment about this blog is welcomed, so fire away!

(To be fair with Schweikart, he recognized in a footnote that the Mondragon Coop. Corporation, a mostly worker-managed corporation, is a big influence in his work, but he immediately states that the example of China is "vastly more important".  This would be a main point of dissent with Hillel Ticktin in the same book)


Bertell Ollman ed. (1998). Market Socialism: the Debate Among Socialists, with contributions by James Lawler, Hillel Ticktin and David Schewikart.
Nayeri, Kamram (2003): "Market Socialism: The Debate among Socialists (book review)", Review of Radical Political Economics, 35, pg. 362.
Schweikart, David (1996): "Against Capitalism", Westview Press.

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