Introduction

This is the home for the research program on social ownership by David McMullen.

This site adopts the Marxist position that once capitalism has brought a society to a high level of economic development it is then ready for a transition to a more advanced system where the means of production (ie, intermediate inputs) are owned by society. This would mean that these assets are no longer owned by individuals or groups nor bought and sold, and that they are used to achieve economically efficient outcomes unimpeded by sectional interests.

The superiority of such a system would rest essentially on replacing profit as the primary motivator with a symbiotic mix of enthusiasm for the work, personal sense of responsibility and mutual supervision.

Capitalism itself is providing the prerequisites that will bring this to the fore. Firstly it is progressively eliminating routine labor and creating a work force that is generally keeping up with skill requirements of the more interesting new jobs as they are created. Secondly, it is delivering high and ever increasing average incomes that diminish the need to rise above others. In other words equality would mean shared increasing levels of affluence rather than shared poverty.

However, only social ownership can tap into the new sources of energy and creativity. It will eliminate the alienating nature of work under capitalism that takes out the fun and the desire to do one’s bit for the common good. And it will eliminate the property walls and conditions of subordination which prevent the development of an effective system of mutual supervision.

Economists would argue that even if you could harness this enthusiasm it would be in vain given that the “socialist economic calculation debate” proved that social ownership cannot make effective use of a decentralized price system. However, this “proof” can be easily dismissed because it only applies to a straw man called the Lange model.

There is nothing stopping an economy based on social ownership from making maximum use of decentralized prices. Establishments would bid for inputs on the basis of the expected value of their output and the cost of alternative available, and they would offer output at prices that reflect their costs and any possible excess demand. However, unlike capitalism or “market socialism”, transfers between establishments are not market exchanges and no individual or group benefits from their outcomes.

Furthermore a system that dispenses with markets for intermediate goods and with profits would be in a position to establish a far better price system because it would be unencumbered by the various “market failures” that currently distort costs and prices. Among these we should include most “government failures” because they are the result of market driven vested interests.

Ironically, social ownership is the only way to achieve small government. Firstly, activities such as education, health care and infrastructure that in capitalist societies tend to be highly politicized (i,e., riddled with vested interest) could under this new system be required to seek funds from independent, “apolitical” and results-orientated bodies. Secondly, there would be little need (or pretext) for regulation as producers, in consultation with users and other affected parties, could normally be trusted to work out their own formal and informal codes of practice and act in accord with the general interest. Thirdly, the welfare system would be cut back drastically. There would be work for all and only the seriously ill or disabled would be eligible for welfare payments. Everyone would be able to afford their own retirement and health insurance, and to pay the fees at the schools they choose for their children.

The main problem for a post-capitalist society is that it has to emerge from conditions created by its capitalist predecessor.

The old division of labor cannot be magically eliminated overnight and many people will resist change. Those who benefit by having high positions will be happy with the current arrangements and those who don’t benefit may lack the confidence or motivation to force through the changes or they may aspire to climb up the slippery pole of success.

However, if a future socialist revolution is centered on the most advanced parts of the world, in particular North America and western Europe,we are far less likely to have a rerun of the 20th century experience. The fact that Russia and China were “imperialism’s weakest link” was a two-edged sword. Lenin said something to the effect that it made it easier to seize power but harder to complete the tasks of the revolution.  Under the backward, conditions those leaders who just wanted to be a new bourgeoisie – open or disguised – had little difficulty in prevailing.

See The Economic Case for Social Ownership where these views are developed in greater detail.

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