He uses all these as resources, but he returns to American soil to work out his basic ideas and proposals. If it cannot offer a plausible projection as to how we might get from here to there, successor-system theory remains an intellectual exercise in model building-interesting in its own right, perhaps, and capable of providing a rejoinder to the smug apologists for capital, but useless to people trying to change the world. The core idea is that the workers themselves democratically elect the managers of their firms. They also share the wealth they create by sharing the profit among themselves. They make their money the old-fashioned way: by finding consumer needs, meeting those needs with decent products, and selling them to satisfied customers at reasonable prices. But how are things like costs, prices, new products and production goals determined?
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Among many now discussing this question are the participants in the s debate over whether central planning or a market-based system of socialism represented the best hope for a human future.
One of the theorists most prominent in this debate, the philosopher David Schweickart of Loyola University in Chicago , has recently contributed a short book in specific recognition that people involved in the growing resistance movement to capital are indeed looking for ways to think about the alternatives.
Schweickart wants to show that the primary negative aspects of capitalism — which he sums up as excessive inequality, unemployment, overwork, poverty, lack of democracy and environmental degradation — are necessary results of its structural features, and that a differently structured system which he calls Economic Democracy is viable, practical and superior to capitalism regarding all six of these negatives. Moreover, Schweickart argues, the transition from capitalism to Economic Democracy will not require a thorough social restructuring and can be carried out on a national scale by way of a few major reforms implemented by an elected radical government.
But Schweickart starts from scratch in order to ground his analysis on an original foundation, and his first chapter lets us know his intention to found a new tradition. We are vastly better situated than was Marx or even Lenin in this respect, for we have accessible to us not only a century of unprecedented socioeconomic experimentation but also data and conceptual tools that were unavailable to the founding theoreticians of socialism.
A society may have some of these features without others, in which case it is not capitalist. We apparently are to assume that, in the light of recent experience, the understanding of capitalism as three separable components will suffice to analyze its problems and construct a successor system.
He has already told us, however, that successor-system theory does not address, except indirectly, such Marxian concepts as alienated labor, fetishism of commodities, the labor theory of value, or the falling rate of profit. But Marx worked out his concepts to arrive at conclusions about how we can expect the system to develop.
Surely a post-Marxist theorist of economic systems ought to address whether this feature of market production can ever be consistent with democratic forms of economic development, or point out to readers why it can now be transcended.
The idea of a class struggle is not discussed. Schweickart presents a reform program, consisting mostly of government regulations, which can be fought for before a final end to capitalism. What would we do? This language, in which leaders and activists design and construct the system for a generally passive population, reflects the general spirit of the book. The labor movement is then mentioned for the first time, two pages before the end of the book.
The Model Nevertheless, Schweickart does attempt to describe for us a social system whose features and consequences he discusses in thorough detail. The theory of Economic Democracy ought to be examined for its own sake. The rest of this review is an attempt to summarize this theory and then critique it. Wage labor would be eliminated — while maintaining intact a system of competing private firms — by establishing one-person-one-vote democratic management within each firm.
Investment in plant and equipment is to be funded by means of a tax on the value of existing structures, actually a kind of lease on fixed capital which may not be privately owned , paid by firms to the state. The tax proceeds are recycled through a system of public banks whose operatives earn their living according to how well they judge both the profitability and employment creation potential of prospective investment plans presented to them.
The banks do not charge interest. They are, however, required to allocate investment funds to geographic regions on an equal per capita basis. Firms whose investment proposals are accepted then use the awarded funds to carry out their plans. Business credit is essentially abolished, so there are no stocks and bonds. Private savings may exist and be channeled into consumer loans, but the social role of private finance will be small, because capital investment is socialized.
The economy will no longer depend on expectations of a return on financial assets in order to avoid the consequences of sluggish growth or recession. If there are insufficient opportunities for productive and job-creating expansion of capacity, a portion of the social investment fund will be simply be returned to the firms who paid the capital tax, who will then distribute it to their workers to be spent on consumer goods.
This system, Schweickart argues, will be essentially free of the negative aspects of capitalism, though it will not be perfect. Extreme inequalities but not all inequality will be eliminated. The incentive to increase firm size in order to increase profits will be absent, since higher profits will have to be shared among an increased number of workers.
Firms will therefore tend to be smaller, and competition will only be over incremental market share, without an incentive to drive competitors out of business. Eliminating extreme wealth and giant conglomerates will democratize both the information media and the electoral process, and the fear that financial markets will react poorly to social welfare spending will no longer be a concern. Workplace democracy will increase social solidarity, reducing divisiveness between social groups and encouraging the human tendency to take care of those less able to engage in productive labor.
Democratic Management and a Market? Schweickart is envisioning an economy of locally based firms of modest size whose competitive behavior is consistent with a concern for their home communities and the general public welfare. Schweickart is quite categorical about the consequences of democratic management. The only system in history in which economic behavior is primarily conditioned by a market has been capitalism. Competing theories exist to explain how it is that a system of prices develops that can then be relied upon to ensure the activity necessary to reproduce society.
How does it happen in a non-capitalist system? In Marxist terms, he has not confronted the notion that exchange value — a price system — depends on a social process by which all forms of human labor are reduced to a commensurable, quantifiable abstraction. Instead he believes that certain features democratic management, social control of investment can be tacked on to an existing market economy and then used like mathematical axioms to derive the consequences.
Imperatives of the Market This is not the place for a complete critique of market socialism. Briefly, though, if the market is to guarantee that workers will produce what society needs without squandering or misallocating available labor time, there must be pressure among competing enterprises to undersell one another.
Allotting some workers a smaller share in income, working some harder than others, laying some off, hiring the poor from other regions, etc. Without a survival imperative for firms and individuals alike , there will be no price system. This would be true even if a one-person-one-vote management policy is enshrined in a constitution.
But even the continued existence and robustness of such legal mandates must be questioned if economic imperatives militate against them. As has often been pointed out by radical and non-radical economists, however, capitalist profits — even if distributed as dividends — represent essential financial strength that allows firms to get the edge on their competition as well as giving them a positive incentive to expand. This activity is, once again, a matter of survival; if one firm does not undertake it, the competition will.
Controlling Investment All this is not supposed to be allowed under Economic Democracy, because investment is to be allocated socially. He suggests that small-scale capitalism may even be allowed in his system. Otherwise, after paying their capital assets tax, some firms will find themselves with more profits than others, and use the excess for expansion purposes instead of personal consumption, thereby circumventing the social investment process.
Groups who have pooled their saved money may start a large private business, or lend these savings to others who do so leading towards a private banking system. An alliance of less successful firms may wage a political fight to lower the capital assets tax and allow them to retain larger profits, arguing that the inhibition of market investment ought not to be so restrictive.
Profits remain a potential weapon in an economic war. Schweickart does not discuss such possibilities. His main concern is to convince people of the possibility of socialism, arguing, so to speak, to his right, and he presents no case against the anti-market left.
He does explain that the alternative of central planning can be criticized on the grounds that it leads to authoritarianism and is fatally inefficient, and he refers his readers to the recent debates over the market for a fuller discussion. Schweickart has asserted that a set of rules can fully govern the behavior of firms in a competitive marketplace; that an essentially different set of material incentives can emerge from a new legal structure while maintaining basic market imperatives.
But he does not examine the social forces that might maintain, or erode, the rules themselves. What can guarantee that firms are run democratically? Will a regulatory agency monitor them? What political pressures will thereby emerge? What ensures that capitalist practices — hiring disadvantaged workers for low pay, or pooling financial assets to start a large private enterprise — will be punished? How strong are forces tending against democratic management and in favor of private ownership likely to become?
Who exactly will constitute the government that stops them? Materialism and the Future These, of course, are the questions that would be posed by a historical materialist approach to economic development. Schweickart proposes to do so, by grafting onto the market a new set of structural features workplace democracy and socialized investment and imposing them by means of a set of legal rules. A new, humane direction for socioeconomic dynamics is then determined by deriving it from this structure.
Ironically, Schweickart declares himself early in the book to be a historical materialist. The negative association of central planning to failed Soviet-style authoritarian systems must certainly be faced. ATC , November-December
After Capitalism (New Critical Theory)
David Schweickart's "After Capitalism"