Classical socialism was a movement to replace the unplanned and exploitative institutions of capitalism with national planning, public ownership and distribution according to human need rather than by the arbitrary capriciousness of the market. Its goals were to distribute economic resources broadly among the people in order to create the conditions for widespread, substantive freedom and to end alienating, exploitative labor processes. Socialism promised all people the resources to live a flourishing life, not just the market freedom to exchange, which offered no guarantee of a decent standard of living. This traditional socialist project was derived from Marx and Engels’ dream of a future that would transcend the allocative and distributional anarchy of the market through the abolition of private property and the establishment of social ownership of the means of production and central planning. For instance, in the Manifesto of the Communist Party, Marx and Engels explicitly called for “abolition of property in land” and the “extension of factories and instruments of production owned by the State” (Marx and Engels 1978, 490). In Socialism: Utopian and Scientific, Engels lamented the anarchy of the market while describing socialism as a state in which “[s]ocialized production upon a predetermined plan becomes henceforth possible” (Engels 1978, 717). Socialism, or perhaps the more advanced form of communism, would realize the human potential to harness productive forces to achieve a rational economic order, social justice and real freedom for all.
Traditional notions of socialism and communism are often defined in terms of ownership rights in the means of production, which are sometimes understood to be the product of an evolutionary process driven by technological development. From a property oriented perspective, socialism involves state ownership of the means of production, perhaps by the state taking over what Lenin called the commanding heights of production. Communism represents a higher form of development in which productive property becomes the common property of the working class, as the state withers away. One implication of these conceptions of socialism and communism is that social coordination would have to take place through some sort of planning process, since the abolition of private ownership of land, natural resources and productive capital effectively eliminates the possibility of moving means of production from one set of hands to another through a market exchange process. The inability to exchange property rights in the means of production liberates society to coordinate the use of those means through central direction, as in a firm, to achieve production that satisfies human needs rather than expands private profit.
Friedrich Hayek famously argued against these conceptions, calling the attempt to create social order and economic justice through rational planning a “fatal conceit” (Hayek 1988). He criticized socialist theory for its failure to recognize that knowledge of resource scarcities, consumer preferences, cost effective technologies, management techniques and other relevant details of economic life were not scientific data that could be articulated into an all-encompassing plan. Rather, this knowledge, such as it is, exists as the subjective, ever-shifting and possibly erroneous ideas of diverse individuals. Subjective knowledge required a constant testing ground to prove its worth, which Hayek argued was best provided by a private property, competitive market economy that was subject to the accounting conventions of profit and loss.
To be sure, Marx also recognized the dispersion of human knowledge in a market economy. However, as Chris Sciabarra argues in his fascinating Marx, Hayek, and Utopia (1995), Marx viewed the dispersal of knowledge as a result of workers’ alienation from the means of production, a transitory side effect of the property relations of capitalism. This stands in contrast to Hayek, who viewed the strictures on human knowledge as “existentially limiting,” that is, as natural and transhistorical properties of human existence (Sciabarra 1995, 119). Sciabarra understands Marx to accept epistemic fragmentation as only a temporary feature of social development, to be overcome in a socialist or communist society. For Marx, development of the forces of production and cooperative work relations would allow tacit and dispersed knowledge to be articulated and integrated in consciously directed economic activity, thereby solving Hayek’s supposedly permanent knowledge problems. Sciabarra calls this Marx’s “synoptic delusion”: the idea that one can consciously design a new society to achieve social justice. Many interpreters of Marx have embraced and extended this premise to argue that a Marxian vision of communism or socialism could be realized only by a centrally planned economy.
Yet empirical events at the end of the twentieth century (e.g., the collapse of the Soviet Union, the adoption of a market model in China, the poverty of North Korea) appear to have eliminated national economic planning as an attractive or viable option. The teleology in Marx’s theory of historical materialism, where development of the forces of production inevitably creates the conditions for social advance towards social and communal ownership is also widely rejected. What then happens to socialist and communist ideas in the twenty-first century? Is there any meaningful notion of socialism that can accommodate Hayek’s epistemological critique of state ownership, central planning and social justice? Can socialist goals be achieved without central planning and the abolition of private property?
Jack Amariglio and David Ruccio argue that non-teleological, anti-essentialist versions of what might be called a postmodern Marxian theory resist the capitalism-as-irrational/socialism-as-rational dualism that characterizes a significant portion of modern radical social theory. They criticize the delusions of rational planning, claiming to find “no evidence that planning means stability and order, nor … that it implies a ‘better’ method to get at the ‘true’ needs of individuals and/or enterprises” (Amariglio and Ruccio 1998, 250). They even take the quasi-Hayekian stance that “the disorderliness [disequilibrium] of markets can (at certain times, in particular circumstances) lead to the satisfaction of social needs” (Amariglio and Ruccio 1998, 251). From their perspective, disorder, decentering and uncertainty are ubiquitous “facts” of social existence. The aspiration of rational economic planning to achieve social justice is thus directly called into question by postmodern Marxism.
The most influential strand of postmodern Marxism derives from the path-breaking work of Stephen Resnick and Richard Wolff, who initiated what some have called the “Amherst school” of postmodern Marxism (Resnick and Wolff 1987). Resnick and Wolff advocate an epistemology that understands all human knowledge to be the product of a unique, complex and open-ended socialization rather than as a mirror of nature, and an ontology that understands the constitution and causation of social events to be the overdetermined product of various—perhaps an infinity of—natural and social forces. Since it is impossible for human knowledge to capture all possible lines of causation of social events, Resnick and Wolff reason that every social theory must inevitably specialize, adopting a favored conceptual entry point into social analysis and seeking to trace, albeit partially and provisionally, its causal connections to the rest of the social totality.
The entry point for postmodern Marxism is the concept of class. Resnick and Wolff define class as the process of producing, appropriating and distributing surplus labor. This idea of class is distinct from other more commonly held notions of class that focus on the distribution of income, wealth and power or the cultural habits of different groups of people. It also gives rise to somewhat non-traditional definitions of capitalism and socialism. Classical Marxism understands capitalism as a form of economy that combines widespread private property and more or less free markets to produce exploitation. Classical Socialism, then, aims to abolish exploitation by replacing private property with social property and markets with central planning. For the postmodern Marxists, however, there is no one-to-one relationship between the presence or absence of private property, markets, and central planning and the existence of exploitative class processes in which the producers of surplus labor do not participate in its appropriation. Class exploitation can persist in the presence of central planning and socialized property. Resnick and Wolff argue, for example, that the Soviet Union did not eliminate exploitation. They regard the Soviet experience as an example of state capitalism, rather than socialism or communism, in which state officials hired workers and appropriated surplus labor and its product (Resnick and Wolff 2002). Thus, rather than focusing on forms of ownership or exercises of power, the positive goal of postmodern Marxism is to envision and enact non-exploitative alternatives, where exploitation is understood to exist when performers of surplus labor do not participate in the appropriation of that surplus, and where non-exploitation is understood to exist when surplus producers share in the appropriation process (more on appropriation below). Because it rejects essentialist and teleological modes of analysis, it is a Marxian theory “without guarantees.” Another way to say this is that it is a Marxian theory that focuses on the organization of production processes in society, rather than on the particular results of those processes. One could call this Marxism “libertarian,” paralleling Robert Nozick’s idea that a libertarian order is one in which society recognizes rules of just transfer (whenever individual property owners consent to trade justly held property, justice is achieved), regardless of the resulting distribution of those transfers. Postmodern Marxism is similarly process oriented in that it aims to achieve a type of shared appropriation, in which the producers of surplus labor participate in the process of appropriating the product of their efforts.
In an important contribution, Stephen Cullenberg (1992) argues that confining our attention to forms of shared appropriation results in a “thin” theory of socialism, which Cullenberg views as an advantage. He contends that an important reason why people view socialism as a failure is because socialists have often promised too much. Socialism has been understood as a utopia that would end the exploitation and alienation of labor; eliminate business cycles and poverty; abolish racial, sexual and gender oppression; and establish more harmonious relations between people and the environment. If we instead see the primary goal of a Marxian socialism or communism to be the abolition of exploitative forms of appropriation, instead of socializing the means of production and implementing central planning, this reduces the political, cultural and economic burden on socialism, perhaps making it more feasible as an institutional alternative. A thin socialist perspective focuses attention on a Marxian notion of procedural fairness in which those who work should also appropriate the product of their labor, without the need to embrace central planning and state ownership of the means of production. Nevertheless, embracing only a notion of procedural fairness leaves thin socialism unable to address distributive injustices of unmet basic needs and dramatically unequal allocations of wealth, income and opportunity. A thinly socialist or communist economy in which appropriation is not exploitative can still yield gender and ethnic inequality, wasteful consumption and production, and environmental degradation, possibilities that have long been concerns in the diverse strands of the Marxian tradition. Thus, defining socialism and communism exclusively in terms of alternative forms of non-exploitative appropriation may be too limiting.
In part to address this problem, George DeMartino (2003) uses Resnick and Wolff’s tripartite definition of the class process as the production, appropriation and distribution of surplus labor to make an important contribution to thinking about economic justice and post-capitalist social forms. DeMartino argues that class justice has three dimensions: productive justice, appropriative justice and distributive justice. This nifty reframing allows DeMartino to reconcile Marx’s famous expression of productive and distributive justice—“From each according to ability, to each according to his needs”—to his separate concern with appropriative justice, by seeking an end to the exploitative appropriation by non-producers. It also enables us to see how the three components of the class process and corresponding notions of class justice might interact, sometimes contradict and sometimes enable each other in socialist and communist societies. Thinking of the three dimensions of class processes enables “thicker” notions of socialism and communism.
DeMartino argues that productive class justice is related to the first part of the Marxian ethic, “From each according to ability.” For DeMartino “[p]roductive class justice refers to the fairness in the allocation of the work of producing the social surplus” (DeMartino 2003, 8). We can interpret such fairness in at least three distinct ways. First, productive class justice could mean that workers have the incentive to contribute with maximum effort and productivity, a goal which might conceivably be achieved in an economy of capitalist firms. Van der Veen and Van Parijs (1986), for instance, adopt this perspective when they argue that retaining free market capitalism might be the most effective way to achieve the abundance of surplus that would enable maximum satisfaction of needs (a form of distributive class justice). Towards that end, van der Veen and Van Parijs propose the institution of a high universal basic income in an otherwise capitalist economy, an arrangement they call “a capitalist road to communism.” For them, communism is defined by a system in which labor becomes life’s prime want and in which distribution takes place according to need. A basic income large enough to achieve universal need satisfaction, funded by the highest possible marginal tax rate consistent with this distributive goal, would balance a potentially unavoidable tradeoff. That is, there might be a tension between producing for maximum need satisfaction and providing the incentive for capitalist employers to create work environments attractive enough to retain workers to produce a surplus that could be subsequently distributed through the tax and transfer system. In that case, a democratic society inspired by socialist and communist ideas might choose to sacrifice shared appropriation for maximum surplus production (a potential type of productive class justice) via capitalist processes, if some mechanism existed to distribute the increased surplus to universal need satisfaction.
A second and slightly different way to interpret the goal of productive class justice is as minimizing work roles not involved in the production of surplus. Bowles and Jayadev (2007, 1), for instance, point to the massive amount of unproductive guard labor (“the police, private security guards, military personnel and others who make up the disciplinary apparatus of a society”) employed in US capitalism as a consequence of class conflict engendered by capitalist production and inequality. Roberts (2014) discusses the large rise in employment in the financial sector in terms of the expansion of unproductive activities that siphon surplus away from rewarding productive workers and growing productive activities. Seen in this light, productive class justice leads to an investigation of how we might reduce forms of labor parasitic on the creation of goods and services that more directly increase the well-being of the typical member of capitalist, socialist or communist society.
A third way to see the possibility of productive class justice is in terms of sharing productive and unproductive work roles. This notion of productive class justice might apply to Marx and Engels’ vision of de-specialized labor patterns articulated in The German Ideology:
[I]n communist society, where nobody has one exclusive sphere of activity but each can become accomplished in any branch he wishes, society regulates the general production and thus make it possible for me to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticize after dinner, just as I have a mind, without ever becoming hunter, fisherman, shepherd, or critic.
(Marx and Engels 1970, 53)
It is an open question, though, whether a complex society could ever successfully “regulate general production,” which would probably require some kind of central planning to achieve this level of freedom and equity in the work of producing the social surplus. However, applying this conception of productive class justice to household production may be more fruitful. For example, in their important application of class theory to understand different forms of household production, Fraad, Resnick, and Wolff suggest that “a policy of regular, systemic rotation of persons across all the [work roles] in the household might well be deemed a condition of existence of household communism” (Fraad et al. 1989, 58). In this case, a kind of productive justice in the household might also contribute to a form of appropriative justice, if rotation of domestic work roles facilitates the equal participation of household members in determining how necessary and surplus household labor is performed.
Distributive class justice is related to the second half of the Marxian ethic, “to each according to need”: how might society’s surplus product be best distributed to meet human needs? DeMartino (2003, 2000) and Burczak (2006) see Martha Nussbaum’s (2011) and Amartya Sen’s (1999) capabilities theory of justice as developing a complex, non-essentialist theory of distribution according to need that is compatible, to a large degree, with postmodern Marxism and thereby quite useful in thinking about what it means to work towards distributive class justice, whether or not the other dimensions of class justice have been achieved. We might imagine, for instance, capitalist, cooperative or independently contracting firms that pay taxes out of the surplus to a democratically organized government body, which in turn distributes the surplus to promote the attainment of universal need satisfaction or equal attainment of the capability to live well.
In the capability framework developed by Nussbaum and Sen, one of the primary goals of governmental and non-governmental organizations should be to ensure that all people have the means or resources to develop their capacity to lead choiceworthy lives. A choiceworthy life is one that a person has reason to value, because the available options allow her to achieve vital, or essential, human functions. Social institutions should ensure, to the extent that natural, technical and social constraints permit, that all individuals have the necessary means enabling choice of a complete, flourishing human life. Flourishing is defined in terms of the attainment of essential functionings. For Nussbaum, in order to lead a flourishing life, a person must be well nourished and educated, have access to adequate health care and shelter, have property that allows exploration of one’s subjective appraisal of beneficial opportunities, and possess the ability to participate in social institutions and interactions with dignity.
While specifying a universally valid definition of the essential human functions is surely controversial, since it might seem to depend upon an objective account of good human living, Nussbaum proposes that the capability approach reaches its account of flourishingly intersubjectively, through a cross-cultural conversation oriented towards answering the question: what makes us recognize others as human? As a result of this conversational approach, a list of essential human functions is always a social product, not fixed in stone, thereby remaining subject to revision through ongoing dialogue and interrogation. Nevertheless, a provisional list permits us to examine the extent to which social institutions allow individuals the opportunity to lead lives that enable them to achieve the characteristic human functions. The list provides a benchmark to judge whether the prevailing set of social structures and distribution of resources enable all people to lead flourishing lives, if they so choose. If not, then from the capability perspective, government has an obligation, in the interest of moving towards distributive (class) justice, to design and implement policies that enhance the capability of people to achieve the essential human functions, or the opportunity to lead flourishing lives.
Van der Veen and Van Parijs capitalist road to communism via establishment of a sizeable universal basic income is one concrete form in which socialist or communist government might distribute the surplus to attain human needs. But while attractive for its simplicity and appeal to equal treatment, a basic income can lead to differentially abled individuals achieving quite different degrees of need fulfillment. A blind person, for instance, requires greater resources to achieve the same degree of flourishing as someone with sight. Ernesto Screpanti (2004) thus argues for a different type of social income funded out of tax revenues in the form of various social goods—e.g., education, health care, social spaces—that meet needs more directly, making it congruent with Nussbaum’s and Sen’s capabilities approach. Screpanti also notes that free time away from work to enjoy consumption possibilities can be conceived of as a type of social good that can be increased through government policies reducing the length of the working day. While Screpanti interprets “the historical tendency toward expansion of social goods … as constituent of a process of construction of communism and extension of freedom” (Screpanti 2004, 187), in a framework that places alternative forms of appropriating surplus at the center of analysis, we might instead see the expansion of social goods, including labor legislation to reduce work hours, as a movement towards distributive class justice.
John Roemer (1996) proposes another model to achieve a type of socialist distributive justice, reasoning that corporate profit income should be distributed equally to all adult citizens. To achieve such a distribution, he advocates eliminating the capitalist, corporate stock market and replacing it with a socialist, coupon stock market. In Roemer’s model, all citizens would be given an equal endowment of coupons that could only be used to buy shares of corporate stock. Corporations would issue the shares and exchange the coupon revenue for cash at the state treasury in order to raise funds to buy capital equipment. The government would tax citizens to fill this investment fund in the treasury. The amount of tax revenue in the fund, in conjunction with the volume of shares issued during any time period, would determine the cash price of a coupon. Citizens who purchased shares would receive a portion of the firm’s profit resulting from the use of capital equipment, but they would have no right to determine the composition of firm management.
While citizens could not exchange coupons for cash, they would be permitted to sell their shares for coupons at any time, and they would do so if they thought they could turn around and purchase shares in other companies that promised a higher profit flow. In this way, the coupon price of shares would reflect citizens’ expectations about the future profitability of firms, thus providing information about the effectiveness of firm management. A citizen’s stock holdings would be sold at death, and the coupon revenue would return to the state, preventing concentration of coupon and stock wealth through inheritance.
One advantage of a coupon stock market is that all people would receive an annual sum of money independent of their wage and salary income. For instance, in 2014, an egalitarian distribution of US corporate profits to all adult (over 18) US citizens would have yielded about $8,500 per person, a sum large enough to make a substantial dent in US poverty. The second substantial benefit of this plan is that it would reduce the political power that a few wealthy elites enjoy under capitalism. Roemer reasons that the concentration of stockholding in capitalism means that a few shareholders have the incentive to influence the political process in order to increase their profit incomes. Such influence is used to minimize anti-pollution laws, labor regulations and other legislation that threatens to reduce profits as well as to increase the probability that governments will undertake profit-enhancing foreign aggression, perhaps, for instance, to ensure the flow of cheap oil. An equitable distribution of profit income would reduce the concentrated benefit of lobbying against policies that increase the public good at the expense of profits. Because it is costly to engage in political lobbying and because the benefits of lobbying would be diffused with the dispersed distribution of profit income, Roemer expects that his coupon stock market would lead to a government that was more interested in policies to enhance the common good. An egalitarian distribution of corporate profits—a type of socialist class justice—would thus help to achieve what others have called an effective property-owning democracy.1
Interrogating the contours of appropriative class justice deserves special attention in a postmodern Marxism that is principally concerned with ending exploitative class processes, since the understanding of exploitation and its absence in production is inextricably tied with the concept of appropriation. Resnick and Wolff define appropriation to mean to “receive ... directly into his or her hands” (Resnick and Wolff 1987, 146). Their definition might be restated as “becoming the first title holder of an asset.” In this definition, appropriation does not occur as the result of an exchange, because during exchange already-defined property rights are transferred between two parties.2 Thus, where the notion of distributive class justice is concerned with the characteristics of results, appropriative class justice focuses on how the production process is organized.
In his classic presentation of the labor theory of property, John Locke (1980) confined the issue of appropriation to the first ownership of previously unowned (or commonly owned) natural goods. In his important book, Property and Contract in Economics (1992), David Ellerman argues that the question of appropriation can also refer to the assignment of property rights to newly manufactured commodities that are produced using inputs with clearly defined property titles. In the process of production, new goods are created that were not previously owned by anyone, and thus they cannot be acquired through exchange. For example, an automobile that emerges at the end of an assembly line has no obvious, pre-existing property right attached to it. This automobile must be appropriated; someone must become its first owner.
Ellerman points out that appropriation can also be seen to have another aspect. In the process of fabricating a commodity like an automobile, some property titles are extinguished. For example, the electric power that is used to manufacture a car in a capitalist enterprise no longer exists as a legal entity that can again be bought and sold after the car has been produced. The firm is the last owner of the electric power that is embodied in the newly produced car. Perhaps more significantly, in a typical capitalist production process, the capitalist is the last owner of workers’ labor time. As Marx noted, in a capitalist enterprise, “the worker works under the control of the capitalist to whom his labor belongs” (Marx 1976, 291). To be the last owner of a property right is sometimes referred to as expropriation. Ellerman asks us to think of this expropriation as the “appropriation of the liabilities” involved in manufacturing the automobile. When we are alert to this additional dimension of appropriation, it focuses our attention on the appropriation of the entire product of the firm—output assets and input liabilities—rather than to just the surplus product.
To speak of the appropriation of the entire product in Ellerman’s sense refers to being the first owner of all outputs or assets created in the production process, as well as to be the last owner of all the input liabilities, especially labor time, consumed in the production process. While Marx apparently nowhere offers a clear definition of the concept of appropriation, Ellerman’s notion does capture two characteristics of the capitalist labor process that Marx noted to be particularly important: that workers do not own any of the product their labor jointly creates and that capitalists are the last owners of workers’ labor time (Marx 1976, 291–2). Although the Resnick-Wolff concept of class asks us to focus our attention on the appropriation of surplus labor and its product, it is very hard to imagine an institutional arrangement that would permit worker involvement in the appropriation of surplus labor and its product without also facilitating worker participation in the appropriation of necessary labor and its product. Thus, in what follows we will employ the Ellerman notion of appropriation to imagine post-capitalist, non-exploitative futures.
Thinking about appropriation in terms of first ownership of all produced outputs as well as last ownership of all input liabilities allows us to sidestep some aspects of a thorny debate, explained clearly by Roberts (2014), regarding the question of which workers should be regarded as productive of surplus in considering notions of socialism and communism. Abolishing exploitation involves ending the appropriation of surplus labor exclusively by non-producers, and Marx believed this could be accomplished through “the ultimate abolition of the wages system” for all workers (Marx 1965, 79). Interestingly, Marx’s conclusion dovetails nicely with Ellerman’s advocacy of what he calls universal self-employment—independent contracting or working in a democratic, worker-directed, cooperative enterprise—through a prohibition of the wage-for-labor-time contract, on the grounds that wage-labor is incompatible with a purported inalienable right to self-governance (a right which, to be sure, might be rejected by many Marxists). But clearly abolition of the wages system would do more than end the appropriation of surplus labor by non-producers; it would also prohibit the wage-for-labor-time exchange more generally, which would end the appropriation of the liability for workers’ time by a non-producing hiring party. The issue in ending exploitation becomes more than reassigning first ownership of the produced commodities embodying surplus; it also leads to thinking about how appropriation occurs when any labor is hired. Who is and who should be the last owner of workers’ time: some non-working (potentially exploiting) hiring party, as in private and state capitalism, the workers themselves, or perhaps a co-determined enterprise where community members and labor (or labor and capital owners) cooperatively manage and share appropriation?
With this conception of appropriation in mind, one way to conceptualize socialism is as a system in which workers appropriate their own product, in terms of owning any commodities they might generate from their efforts and in terms of being the last owners of their used-up labor time. Understood in this way, socialism would be compatible with a mixed system of independent contractors and cooperatively organized worker-managed enterprises, where all workers (and only workers) in the firm participate in the appropriation process. A socialism that included only independent contracting and self-managed enterprises could possibly be implemented in a private property, market system, where the wage-for-labor-time exchange (i.e., labor rentals) was legally abolished. Jaroslav Vanek, an influential proponent of worker self-management, proposed a constitutional amendment to prohibit human rentals as one method to achieve this goal. He offered the following language:
Whenever people work together in a common enterprise (whatever their number), it is they and they only who appropriate the results of their labors, whether positive (products) or negative (costs and liabilities), and who control and manage democratically on the basis of equality of vote or weight the activities of their enterprise. These workers may or may not be owners of the capital assets with which they work, but in any event such ownership does not impart any rights of control over the firm.
(Vanek 1996, 29)
Communism would impose additional restrictions on production methods, requiring the end of any form of individual appropriation and mandating collective appropriation in all cases, thereby restricting both the capitalist firm and the independent contractor. Resnick and Wolff (1988) introduce a distinction between two possible types of communism. Type I communism would involve an institutional arrangement in which “all adult individuals in society participate collectively … as appropriators of surplus labor, but only some individuals (a smaller number) perform surplus labor” (Resnick and Wolff 1988, 142). One possible institutional form in which workers share, presumably democratically, in the process of appropriation with non-producers would require the board of directors of each enterprise to be composed of workers and elected members of the relevant community, however specified, perhaps as regional or national representatives. Such a communist board of directors, with both workers and delegates of citizens from the surrounding area, would manage the production process (i.e., appropriate the liabilities) and appropriate the output of the enterprise. Ownership of the means of production could take many conceivable forms, whether individually, worker, or community owned.
Resnick and Wolff’s type II communism exists when only performers of surplus labor participate in appropriation; non-producers are excluded. Wolff develops a version of this idea in his book Democracy at Work (2012), in which he advocates replacing the capitalist firm with what he calls “workers’ self-directed enterprises.” In a workers’ self-directed enterprise, each productive worker serves as an equal member of the firm’s directing board. Wolff indicates that productive workers could hire unproductive workers into an employment relationship, rather than inviting them to join a firm as co-members, since they are not engaged in generating a surplus. As he puts it, in a workers’ self-directed enterprise, productive workers would use a “portion of the surplus to hire and provide operating budgets as needed to managers, clerks, security guards, lawyers, and other workers not directly engaged in producing surpluses” (Wolff 2012, 124). A workers’ self-directed enterprise thus contrasts with a cooperative, self-employment firm in which no person is employed by another since all self-employed workers, whether classified as productive or unproductive, collectively appropriate the whole product.3 Self-employment firms do not fall neatly into either Resnick and Wolff’s type I or type II form of communism, which is why they might be thought of as socialist rather than communist. But just as self-employment firms can exist with multiple types of ownership rights in the means of production, a system of workers’ self-directed enterprises could also permit private property rights in land and capital goods, the production for profit, and commodity markets. But whatever the form of property ownership, in a socialist or communist system, property rights would convey no appropriation rights.
Appropriative class justice clearly requires some form of workplace democracy and worker appropriation, and since it is possible for a democratic workplace to rent privately owned, community-owned or state-owned capital goods, appropriative class justice could be achieved without the traditional socialist method of “socializing the means of production.”4 Herbert Gintis (2010), however, argues that workplace democracy and worker appropriation require worker ownership of capital goods, since non-working owners will be reluctant to lend or rent capital equipment without some degree of control over the production process and the corresponding use and maintenance of the capital that they own or that serves as loan collateral. Consequently, Gintis maintains that worker appropriation also requires worker ownership of productive property. Such an arrangement is feasible in production processes with a low capital-labor ratio, but in many large-scale enterprises (i.e. precisely those most likely to take advantage of the corporate form to raise the necessarily great amounts of capital), worker ownership is not attractive to ordinary workers. To see why, consider that in 2012, 53,500,000 people were employed by US corporations that had a total market capitalization of $18,668,333,210,000.5 Capital per worker in the corporate sector was thus about $350,000, an amount much greater than the average net worth of a typical member of the working class. Even if we can imagine an economic or political mechanism that would transfer firm ownership directly to its workers, it would be too risky for most of those workers to hold the bulk of their assets in their workplaces, thereby deriving both their labor incomes and capital incomes from their jobs. If worker appropriation were legally mandated, per the Vanek amendment, and if worker ownership were required to make this successful, workers would likely exercise undue caution in the conduct of their enterprises.
Since feasible types of appropriation are often not independent of the ownership and distribution of productive assets, for the foreseeable future it is difficult to conceptualize socialist and communist forms of appropriation without also considering how ownership rights to productive assets are distributed. There are many alternatives. David Schweickart (2012) advocates a post-capitalist model that he calls “economic democracy.” He imagines a future in which small firms “operate pretty much as they do now”, while large firms—perhaps those that currently are organized as corporations—are “‘owned’ by society as a whole” (Schweickart 2012, 206–7). Socialized firms would be controlled by their workers, not state officials, who would elect representatives to the firms’ boards of directors, thus achieving a type of socialist appropriative justice. Schweickart proposes that public banks finance investment in these enterprises with funds raised through a capital assets tax levied on all firms. While this model avoids the difficulties of full worker ownership, rules and institutions would have to be carefully designed to ensure that democratic firms perform adequate maintenance of the capital stock and to guard against capture of the investment financing process by special interests.
To help facilitate worker appropriation without socializing ownership of the “commanding heights,” Theodore Burczak (2006) suggests implementing a socialist “stakeholding” grant, drawing upon Bruce Ackerman and Anne Alstott’s (1999) model of a stakeholding society. Ackerman and Alstott argue for implementing a sizable cash payment—an $80,000 basic capital grant—to adult citizens at the age of maturity to enable the achievement of real equality of opportunity. Their stakeholding proposal is “based on the community’s obligation to give each person equal respect by providing her with equal resources to develop her unique talents” (Ackerman and Alstott 1999, 194). With adjustments, Ackerman and Alstott’s stakeholding proposal offers an attractive institutional structure to achieve a type of socialist distributive justice with the ability to enable democratic workplaces. While Ackerman and Alstott use possession of the means to attend college as the standard proxy for equality of opportunity—thus an $80,000 capital grant—a socialist or communist system that retained private property might use possession of the means to purchase the average capital stock per worker as the standard measure of equal opportunity. This first revision of the Ackerman-Alstott proposal is based upon a view of the stakeholder grant as a share of the accumulated capital stock of the society into which a person is born. A second modification to the Ackerman and Alstott plan is necessary so that the grant is directed towards uses enabling non-exploitative work environments. Ackerman and Alstott argue for no limit on how people could use their capital grant because they accept the liberal belief that there are plural conceptions of the good life. They insist that once the government provides individuals with the means to achieve opportunity, it is up to those individuals to decide the best use of their grant, even if that includes a yearlong party on the beach. From a Marxian perspective, a wealth grant is not valuable for its own sake but for its ability to enhance non-exploitative work opportunities, either through self-employment or by providing a funding source to finance worker-owned and self-managed enterprises. A grant could perform this function if it were limited to investments in human and physical capital: post-secondary education, vocational training, equipment to become an independent contractor, and potential membership fees to join a worker-owned and self-directed firm.
Instead of basic capital grants, Joseph Blasi, Richard Freeman, and Douglas Kruse (2013) advocate a type of shared capitalism, which has the promise to evolve towards socialist and communist forms of appropriation, through various changes in tax policy to encourage capitalist firms to share profits with their workers and to distribute stock ownership widely to all employees. For example, they suggest that income tax law might favor interest income earned by lending to firms partly or wholly owned by workers, that lower estate taxation be levied on small business enterprises sold to workers upon the owner’s death, and that deductibility of stock options and stock grants from corporate taxation be allowed only if these options are available to all corporate employees. While they argue that profit sharing and the expansion of worker ownership is a way to reduce inequality (and to enhance socialist distributive justice), these proposals are also intended to enable the evolution of what we have called socialist appropriative justice.6
A final type of shared appropriation and another evolutionary form between capitalism and socialism—achievable when the ownership of productive assets is distributed unequally—is to mandate that the board of directors of the enterprise be composed partly of representatives elected by workers and partly of representatives elected by capital owners. Such a system of co-determined enterprises is widely practiced in contemporary Germany, where the law mandates that large firms reserve at least one third of board seats for representatives of the firm’s workers.
Socialists and communists have ample reason to reject Hayek’s diagnosis of being afflicted with a fatal conceit, as long as the search for more egalitarian forms of productive, appropriative and distributive class justice does not rely on the presumption that abolition of capital markets, state ownership and national economic planning are the means and the end of post-capitalist development. A vast network of law, culture, property rights, exchange mechanisms and public policy sustains the microeconomics of the exploitative capitalist firm and “free market” production and distribution. Non-exploitative firms and egalitarian types of production and distribution likewise have the capacity to develop through socialist and communist interventions in this same network, without the need for an imagined singular rupture with the “capitalist system” (Gibson-Graham 2006).
1 Roemer (2013) has subsequently rejected this model, anticipating difficulties with implementing and sustaining the coupon stock market. In its place, he now argues for a more traditional social democratic model that retains capitalist work relations but implements a highly progressive tax system to fund an extensive set of welfare-expanding institutions. Social democracy (like the coupon stock market) might achieve a form of socialist distributive class justice, but it makes no attempt at productive or appropriative class justice.
2 In a provocative essay, the subjectivist Austrian economist Israel Kirzner (1979) suggests that the economic meaning of a commodity is never a settled issue in that buyers of commodities might see very different uses and values in those commodities than do sellers, giving rise to the possibility that new value arises, and is appropriated by the entrepreneurial purchaser, in the act of exchange itself. The difficulties such a concept of appropriation in exchange poses to thinking through non-exploitative forms of economy will be left aside in this essay.
3 The joint notions of division of labor and comparative advantage (i.e., that someone who is absolutely more productive might have a comparative advantage at an unproductive activity) seem to make the distinction between productive and unproductive labor inside the firm difficult to operationalize.
4 Related discussions of producer cooperatives where workers assume the role of appropriator can be found in Jossa (2014) and Kristjanson-Gural (2011).
5 US Census, http://www.census.gov/library/publications/2015/econ/g12-susb.html; World Bank, http://data.worldbank.org/indicator/CM.MKT.LCAP.CD (accessed April 28, 2016).
6 Bowles and Gintis (1998) suggest an alternative set of public policies that might favor the gradual evolution of democratically self-managed workplaces in a market economy.
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