The Myth of a Socialist Market
I felt it pressing to write an article on the particular and very peculiar trend of advocacy for so-called “market socialism” within communist spaces and why it is a very misguided attitude. I doubt that me writing an article on the topic will quell the growth of thought leaders like Richard Wolff however I think it would be important to note down how this tendency is counter to the goals of many anarchists and communists and why it stems from a very unfortunate state of gridlock with regards to the way that communist politics is organised throughout the world.
So What Exactly is Market Socialism?
I think it would be important for us to define our terms before tackling the issue of the market socialist tendency. Market socialism has many different definitions however what the one I want to tackle is the one espoused by most market socialists, that being the co-operative variety. Very basically, what many market socialists seek is a society comprised entirely of worker co-operatives as opposed to traditional hierarchical firms. What does this mean? In effect, what market socialists call for is economic democracy¹, for workplaces in which the employees of that firm control the direction of profits and the working conditions, and what happens, in effect, is a system in which capital is democratised. Now, from the get-go, there isn’t really a problem with a system like this, and in fact, it sounds much better than the system of the old Soviet bureaucracies and state autocracies we saw in previous attempts at socialism, however, as we will see later on, this isn't really the case, and it has to do with the simple fact that market socialism is a system that maintains the existence of capital, which can under no circumstances be “democratised.” To understand why this is so, we must learn about capital and what it exactly is.
Capital: A Constantly Expanding Force
Capital, is, put simply, the process by which the capitalist economy operates. Here is the general formula for capital
However, this on its own provides no context and may in fact confuse people who aren't familiar with Capital Volume 1, so we must edit it.
When a capitalist seeks to make more money, they must invest in a production process in order for that money to increase in value, hence the M’. A capitalist wouldn’t invest in the production process if the money invested did not increase in value. Since M-C-M’ is a cyclical process we can start pretty much at any point however it makes sense for us to begin with the money capital (M). A capitalist begins with a certain amount of money (with questionable origins) of which they purchase labour (Lp) and means of production (Mp), raw materials and machinery, which are then combined and whose value is expounded into the finished product (C ), which is worth much more than the original amount of money invested. This product is then sold on the market in which its value is realised back into the money form with an extra amount of value attached to it (Sv) which serves as the unpaid amount of labour that is done by the worker that goes to the capitalist. Because of this process, capitalists must exploit their workers as much as they can, otherwise, their competition would be able to undercut them and leave the capitalist bankrupt. The legal and illegal exploitation we see in workplaces is not because the capitalist is evil, to the contrary, a capitalist might possibly be a good person (if one even exists) and consider paying their labourers a fair wage, however, they are forced into the process of constantly expanding their capital at absolutely no cost, be it the environment or the sovereignty of man.
How does capital operate in a market socialist system then? Unless there are any market socialists out there who wish to correct me, there isn’t really much of a difference between the capitalist system and a market socialist system if we are to analyse the system of capital that operates within it. In a capitalist system, the worker is made a slave to the system of capital and the capitalist is also a slave to the system of capital (though in a much more favourable position), an ever-expanding behemoth that is beginning to reflect its dire consequences both for those who are exploited by it and the planet on which it functions. In a system of co-operative capitalism, the worker is made a slave on two fronts, and whatever “economic democracy” is thus neutered.
Faux Democracy
As I have laid out prior, capital’s goal is to constantly expand or it collapses, and we should thus logically deduce that capital’s need to expand would come into conflict with any democratic decision made by a co-operative. A worker co-op cannot vote to increase wages or better working conditions if it comes into conflict with the profit motive. Any democratic decision made by a collection of workers producing commodities can only exist in accordance with the goals of capital.
Is a system “democratic” when it exists only for profit and any economic decisions that contradict the expansion of capital will leave you and your enterprise bankrupt?
Socialist Imperialism
It sounds like a preposterous notion, especially for those of the social democratic variety, however, you have to keep in mind the fundamental rule of the capitalist mode of production.
Because the rate of profit decreases, even though the mass of surplus value and profit do not decrease, progress rhetoric and hurries will shout at a scampered humanity ever more loudly: work more, produce more! And when the local workers faced with their frugal compensation cannot buy the surplus product, one needs to find means to conquer markets in foreign countries to ensure consumption. That is the vicious cycle of imperialism, which inevitably has found its solution in war — and a temporary escape from the final crisis in the reconstruction of the destroyed works of humanity, created in centuries. — Amadeo Bordiga
Capital’s need to constantly expand forces nations into imperialist relations as the domestic proletariat cannot afford the surplus of commodities that they produce. As capital expands further and further, the profit rate is squeezed, forcing more money to be invested back into the means of production so that one capital can beat out another competing capital. The lower rate of profit forces capitalists to invest more into the means of production and lowering the cost of the good in the process lowering the profit rate further in a cyclical race to the bottom.
Where are these extra commodities supposed to go? We can only consume so much before we find ourselves in a crisis of overproduction. The only solution is to collapse the economy or to break the sovereignty of nations in the global south and engage in imperialism for higher profits. How will this be prevented within the “market socialist” confederation? Will the workers just “vote” to not engage in imperialism? In the already false democracy?
Mais C’est Une Transition!
I’m usually met with the accusation that I frame the goals of market socialists as that of a Titoist paradise. I don’t doubt that these people may have good intentions and might genuinely want to create a socialist society, however, their “methods” are likely to never be successful in achieving communism. Why do I think that this is the case? For the very simple reason that there is no concrete plan for a transition from this highly flawed society to some kind of planned economy. When will this transition occur? When the productive forces are sufficiently developed enough? Will the workers vote when they wake up in the morning one day when they finally feel as if co-operative capitalism is bad? Why would the worker vote against their own interest? They are motivated by profit so they can’t make any conscious decisions unless those decisions do not conflict with the health of their enterprise, and a transition to a planned economy will obviously be detrimental to the profits of a given worker co-operative, so what will happen then? Must there be a second proletarian revolution in order for this change to occur? This has not been specified and I think it points out a major flaw within the logic of those who advocate for market socialism.
Conclusions (for now)…
Hopefully in this short article I have been able to lay out how co-operative capitalism is not the solution to our current economic woes, and that what is essentially a simple reform in the capitalist mode of production, maintains the behemoth of capital, which demands constant growth to the detriment of humanity, which cannot be placed alongside the idea of democracy, as capital’s expansion would be in contradiction with any democratic decision made by a firm. It is this beast that is capital which has left entire nations devastated all in the pursuit of its own valorization, only for it not to triumph the planet, but to eventually collapse under its own internal contradictions. It is these consequences that many socialists ignore when they attempt to reconcile socialism with the existence of the commodity. A future beyond profit that doesn’t incorporate capital nor the Stalinist beuracracies that were socialist only in name but maintained every aspect of capital is a topic of discussion for another article, though I think it should be evident to all socialists that there is functionally no difference between having one choose the rate at which you are exploited and you choosing that exploitation for yourself with choice between that and going bankrupt.
[1] Bordiga is weeping right now
[2] I felt like I could’ve gone into the issue of income inequality within a system of market socialism however I figured that since this was a general critique I might limit myself to talking about co-operative capitalism in general
