LTV, Working class (fwd)

Justin Schwartz jschwart at
Mon Oct 31 17:55:59 MST 1994

On Mon, 31 Oct 1994, Louis N Proyect wrote:

> On Mon, 31 Oct 1994, Justin Schwartz wrote:
> >
> > In case you want my views, I think that labor-managed market socialism is
> > better than capitalism and worth fighting for.
> >
> Louis Proyect:
> OK, let me see if I got this straight. After socialism has triumphed
> everywhere, the state will own the means of production just as it did
> under 'planned' socialism. The difference will be that the enterprises
> will be managed by the workers and compete in the marketplace just as
> they did under capitalism.

In the Schweickart model capital is also provided by the state.

 So a "peoples GM" will compete with a "people's
> Ford" and "people's Chrysler" within socialist America, and all of these
> socialist enterprises will compete with "people's Toyota" and "people's
> Mercedes-Benz" on a global basis? Is that what we have to look forward to?
Yes, although global competition would be less because enterprises would
tend to be smaller, since there would be no incentive to expand above the
level of technical economies of scale. The cooperators would not want to
divide up their profit shares among additional workers and could not make
money by exploiting anyone, so firms of the scale of GM would not arise.

> Should we also assume that when it comes time to expand production, the
> enterprises will select from among competing socialist banks and
> investment houses? Will there perhaps be a "people's stock market"?
Not on the Schweickart model. In his version, cooperators apply to the
local branch of the state bank for a grant. There would be no stock market
and no competition among capital suppliers. I myself wonder whether this
is for the best. In Roemer's model the answer to your questions is "yes."

> Will there be advertising and public relations run by socialist hucksters
> to promote products made by the people's enterprises?

Yes. Schweickart thinks that it would be much less than under capitalism,
but I do not follow his reasoning here.

> When a socialist enterprise becomes unprofitable, will the workers issue
> themselves pink slips?

Well, workers in a cooperative which is not making a profit will
presumably want to seek another line of work if they cannot reorganize
successfully. In Schweickart's version the state guarantees full
employment and acts as an employer of last resort.

> As I understand it, WWI and WWII were caused by national capitalisms
> fighting over limited markets and raw materials. How will "market
> socialism" avoid similar fights

Socialist markets are nonexpansionary for the reason stated above: the
firms don't tend to expand beyond a certain medium size. This leads to
different problems--a risk of underinvestment. But imperialism is a
feature of capitalist markets, not markets per se.

> Competition under capitalism revolves around the struggle to maximize
> profits. It has led to environmental disasters, socially questionable
> investments (junk food, cigarettes, beachfront hotels, etc.) and a
> stressed-out, alienated and generally fucked-up population. How will
> competition under "market socialism" sidestep these miseries of everyday
> life?

Environmental disasters will be minimized because cooperators won't want
to foul their own nests; also, they cannot threaten to flee to avoid

Investment is determined according to democratically agreed on social
criteria as well as profitability, so whether money is put up for things
you don't like is something you get a say in.

Alienation is reduced by self-management: workers decide the nature and
pace of production within market constraints.

I could tell a similar story about the horrors of planning, but I don't
have to: we've seen it in action. Labor managed market socialism is not
perfect and it may not be all we hoped for, but the issue is comparative.

People who are serious about the issues will familiarize themselves with
some of the extensive literature on the subject. See the special Fall
Winter 1992 issue of the Review of Radical Political Economics for
Schweickart and other planning  and market perspectives.

--Justin Schwartz


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