1. "Socialism has no economics, so what can I possibly have to say about it that would merit consideration above any other opinion?" This is as close a paraphrase I can recall of a reply by Paul Krugman to a question posed at the American Economics Association annual meeting in New Orleans a few years ago. The question was: "Wouldn't socialism solve all these problems"? The subject was the devastation on labor and the poor in the Great Recession. He went on to quip "economically, socialism is merely expansion of public goods", which, without going into a long discourse on the economic definition of "a public good", are generally free, and non-exclusive or universal in access---no money, no exchange -- . The left labor folks did not seem pleased with Krugman's remark, but he was actually channeling Karl Marx (I've never seen Krugman quote Marx!), who, more than once, observed that capitalism arises from scarcity, and communism from abundance. When asked about the political economy of communism -- Marx also replied -- it has none.
2. In politics, socialism tends to arise to beat back the resistance to the expansion of public goods by the private interests, and to share the rising wealth (increasing abundance) created by capitalist development.
3. Extending this thought backwards, one would judge the early phases of the Chinese and Russian revolutions (both taking place in technically and economically backward nations against putrid feudal regimes) as marked by a serious error. What does it mean, for example, to socialize a good that, for the moment, is NOT abundant, like food? It means the lines for access will be long (unproductive time is very expensive), and bribes will be made in other scarce goods to get to the front of the line. I don't see how avoiding corruption is even possible in that scenario -- a political disease that can prove fatal for a regime if it cannot be reversed. Naive economics combined with serious security threats is a particularly dangerous cocktail. At the same time, aligning the expansion of public goods with the capacity to afford and implement them will be a complex and difficult balance. The Chinese appear to be making headway in mastering this.
4. Its dangerous to think in absolutes. Consider the connection between innovation, and scarcity. In order, for example, to "abolish capitalism", one would have to postulate a theory of non-economic scarcity, since every NEW thing or service will begin as scarce. Who gets it first?
5. Unrestrained capitalism tears communities, nations, indeed the world, apart. Yet it is the engine of advances in wealth that haves sustained the uneven but nonetheless most astonishing rise of human science, art, achievement and fulfillment. It will not be modified or overcome except in rough proportion to the supply of the means of life as public goods.
Notes on Marx's proletariat.
6. Marx predicted the industrial proletariat would be the gravediggers of capitalism. A good historical economic argument can be made that indeed these wage workers were, and are, the gravediggers of a definite mode and era in capitalist development. There is good evidence and documentation on the very large impact of the class struggles -- meaning the political and economic mobilization of mass production factory workers and their communities, as an economic and social class --- in response to the dominant relations of employment then. Those relations were perfectly captured in a remark by Henry Ford that the ideal employee was "a maggot with hands".
7. Most of this mobilization was within concentrated local or regional labor markets, but occasionally, as in the 1946 coordinated CIO 'general' strike, became national. Nonetheless, it transformed the craft based US labor movement and made collective bargaining a "law of the land"-- a law created and modeled on the patterns and balance of forces of industrial relations established in the 1930s and 1940s uprisings of Marx's proletariat.
8. Nationally, Marx's "industrial proletariat" played a key role in the rise of social-democracy in the US in the form of the New Deal. Internationally, this same class advanced social democratic reforms that took both communist and socialist/social-democratic forms in Europe, similar to the New Deal (soc. security, unemployment, legalize unions) plus national health care. In the developing world run by monarchies and imperial dictatorships, including Russia, Vietnam, Cuba and China, it took primarily communist forms as a political trend -- determined by who led the liberation from colonialism. This class is playing a key role in China now demanding a rise in living standards and culture in response to the "factory of the world" labor markets. Everywhere manufacturing in the mass production phase
9. But that class -- industrial workers -- is being obliterated in advanced economies. The process is longstanding and not reversible. Most labor is hired and deployed now as a service. Service workers' income, however is widely disparate by sector, and by the divisions of human capital (education, personality, experience, etc) and its impact on the labor market. Further the employee--employer--customer relationship is significantly altered from manufacturing in most service occupations. Even much that remains product-based in advanced economies is engaged in producing an intangible commodities (e.g. software).
10. To the "proletariat's" significant achievements in raising wages and standards in manufacturing, and contributing to a vast expansion of democratic power world-wide, must be added the accelerated incentives for corporations to automate. Add to this the ability to export labor intensive manufacturing to less developed parts of the world, or closer to export markets and/or important resources, voila, you have both the seeds and bitter fruits of the disappearance of the "middle class". Recovery from this phase will not be led by the disappeared, but by.....who? The end now has to include erosion of the "lower" class, and the "upper" classes, altogether, by the advance of "free stuff"
Socialism and Fascism
11. In the prolog to World War II, German and Italian fascism triumphed because Left and social democratic forces failed to unite to defeat it. On the social democratic side were forces who supported reform of capitalist relations. On the Left, mostly Communist, were those who saw capitalism itself as the cause of the fascist threat, and (therefore?) an inevitable consequence of capitalist relations. An important question is: Was that failure to unite to defeat fascism inevitable? Did it really require raising the question to an entirely different international level, where the question of unity had to be put before Roosevelt, Stalin and Churchill?
It's worth reviewing the connection between capitalism and fascism, in light of the rise of Trump and other 21st Century--hatched fascist movements. I start from the following premises, which I do not want to argue here, but seem beyond debate:
- Capitalism has long term as well as short term cycles. The long term ones are associated with sudden or accumulated major shifts in both technology, and capital accumulation. Technology over time (and the science behind it) radically restructures the division of labor in society, and thus alters its class and political structure in profound ways. Such restructuring demands vast sums of capital to achieve, and deploy throughout economies and societies. This results in a powerful tendency, well documented by Thomas Piketty, toward inequality and the undermining of democracy as instability grows.
- Capitalist development generates, at different times and stages, powerful incentives both for and against democratic social organization. On the one hand, no owner of a business wants the state to be handing out prerogatives and monopolies (like the Kings did!) to their favorites (unless its him!). On the other, they resist EVERY tax intended to avert the catastrophes associated with rising inequalities and the injustices they inflict and perpetuate.
- Fascist movements have signatures that are unique to each culture in which they arise, but they share 1) active support and financing from the most degraded faction of the rich; 2) a reliance on racism, nationalism and fear to divide and separate their adversaries, since they seldom actually represent a majority of the population; 3) a wholesale rejection of democratic institutions and values in favor of rule by force.
12. We see today in the US a revised form of the divisions that failed to halt fascism in the 1930s. The US has a two party system which naturally evolves from the winner take all outcomes and rules that dominate most elections. The divisions between anti-fascist forces thus take place mainly within and around the Democratic Party, at least for now. The Hillary-Bernie gap is the most publicized reflection. But there are more dimensions than that. Neither trade unions, pro-equality movements, pro-peace, public health and environmental advocates, most liberal and "new" capital (think Robert Rubin for an example), nor many others have identical stances or interests -- though all are mostly opposed to the fascist threat. It is unreasonable to expect these forces to unite as one---because they are NOT 'one'. But it is essential that they coalesce to rid themselves of the threat that will doom them all.
13 For the liberal and social democrat, no reforms will happen until the threat to democracy by fascists is defeated. That cannot happen without joining with the Left, which means that the commitment to REFORM to remedy the social basis of the fascist threat must be sincere. For the Left, "capitalism", reformed or not, will persist as long as the means of life are significantly satisfied by commodities -- things sold and purchased for cash or credit. Commodities will persist as long as they are scarce, and recede in proportion to rising abundance. So too with capitalism and socialism. As abundance grows the former will recede and the latter expand. What is socialism? We will know we are there when most stuff is free.
more to come.