A Note on "Market Socialism."

By Magdoff, Harry | Monthly Review, May 1995 | Go to article overview

A Note on "Market Socialism."


Magdoff, Harry, Monthly Review


I would like to use this occasion to try to explain why we feel estranged from the topic. Let us agree that a vision of socialism is needed, a vision that has a universal inner essence but is also subject to considerable variety in the concrete, depending on place and time (the obvious differences between a social revolution in Ghana, Mexico, or the United States). From my perspective, choice of market vs. plan is a secondary matter, not, as so many of the authors in the book believe, at the heart of the vision. A broader set of goals needs to take precedence. What kind of market, how much market, what kind of plan, how much plan are questions which have to do with how best to advance the main goals. In the final analysis, we surely agree, socialism will not be socialism unless the people are involved in the selection of both aims and methods, with adequate arrangements for change in a process of trial and error. I will try to explain why I think the broader vision needs to take precedence. For this purpose, I propose that a socialist vision of the United States would encompass the following: (1) A society which gives first and predominant attention to the poorest, the discriminated, and the disadvantaged. (2) A moral society which behaves as a good citizen of the world. (3) An economy that operates in harmony with nature. (4) A country with open borders.

What have the market and the price system to do with this vision? With respect to (1), let us first consider housing: (a) homes for the homeless, and (b) changing the slums of this country into a habitat for humans. Apart from the temporary makeshift arrangements for the homeless that even a decent capitalist society can make, I doubt that adequate, humane housing for all can be provided as long as essential aspects of the marketplace are in force. I can't see how the housing problem can be properly solved without a zero price for land, the cancellation of accumulated mortgage obligations, and the elimination of other economic relations that facilitate speculation in the buying and selling of residential facilities. For one thing, the advantages of high risers in private, public, and semi-public housing would be reduced. Market relations would then not stand in the way of constructing decent-sized structures appropriate for community life, as well as providing plenty of public space for parks, sports, child-care centers, medical clinics, schools, cultural facilities, etc. What has been said so far comes under the rubric of giving first priority to the most oppressed. But that won't be all that is needed to meet that objective. Enough jobs at good wages would have to be generated for the "excess population"--excess, that is, in a labor market that does not need them. From what I understand of the U.S. economy, the experience of the WPA, and the nature of the global unemployment crisis (so defined by the ILO), the bulk of the jobs with decent wages would have to come from the public sphere. The market, socialist or otherwise, cannot be relied on to create enough good jobs which would be financed by the scale of the goods and services they produce (especially if all four of the above "vision" items were followed). Hence, the public sphere's share of the job market would have to keep on growing. An overwhelming proportion of the economic surplus would then have to be garnered and used in ways unsuited to and unguided by the market. If so, central planning would be essential. This does not necessarily mean exclusive central control over the disbursement of the surplus; political and pragmatic elements would influence the extent to which the center, regions, and local communities participate in the planning process and in administering the use of the surplus.

Item (2) of the vision would call for even greater and more radical changes in this country's economy. The United States, with 5 percent of the world's population, consumes 20 percent (or some such disproportionate share) of the world's nonrenewable natural resources. …

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