Economic Democracy
As socialists, we believe that political democracy alone does not go far enough. In fact, with great inequalities of wealth, political democracy itself is threatened and sometimes negated. As Supreme Court Justice Louis Brandeis put it, “we can have democracy in this country or we can have great wealth in a few hands, but we can’t have both.”
Many of the fundamental decisions that affect us everyday are made not by representatives chosen at the ballot box, but by executives in corporate boardrooms who are answerable to no one except capital. Workers should not be contributing their labor to the domination of capital, but to their own collective benefit.
Concretely, this means:
• Public ownership of (at least) the commanding heights of the economy. One example we have currently is that of public electric power, which has consistently been cheaper than electricity produced by investor-owned utilities (IOUs). These economic sectors should be democratically controlled by the communities they serve.
• Joint worker-consumer control of the economy. This does not mean a takeover of small business and family farms. Our goal is worker-consumer ownership and control. They family farm is an example of worker ownership in the present economy, but control is in the hands of food corporations, and banks, who establish prices and credit, and often drive small farmers off their land. In our modern, post-industrial society, we will also need to find ways of realizing democratic control of the means of communication.
The embryos of some of the institutions that would form a socialist economy already exist in today’s economy. Such places as producer co-ops, consumer co-ops, and worker collectives provide suggestions and experiments on how a socialist economy might work on a larger scale. The multi-industry Mondragon Cooperative, for example, is a major factor in the economy of the Basque region of Spain.
Capitalist enterprises alienate workers from their work in several ways. One way is the production of goods for profit, not use. This leads to the production of useless goods, followed by a psychological manipulation of the public in order to create a “need” through advertising. Production without regard to the consequences leads to environmental despoliation and arms races between nations.
Two examples of production for profit, no need, in the current system are:
1. The failures of drug companies to develop or manufacture “orphan drugs” – drugs that treat diseases so rare that there is no profit in their production. Even though drug companies have the highest rate of profit of U.S. industry, the Reagan administration had to sign a bill giving a tax break to drug companies before they would agree to make such drugs. (And the companies still opposed the legislation!)
2. The disappearance of trolley cars. Trolleys in an age of energy shortages could be a cheap, clean, energy-efficient way of moving people around our larger cities. We don’t have trolley cars in most U.S. cities today because during the late 1940’s and early 1950’s, General Motors bought up the trolley car companies, not to run them more efficiently, but to tear up the tracks so they wouldn’t compete with CM cars and buses.
A socialist economy would be based on production for use. “What makes the most profit” but “What do we need?” This would be possible because the people making decisions would not be a few rich executives in corporate boardrooms, but representatives of society as a whole.
An economy based not on competition but on human need would be able to plain how to prevent the crises inherent to the capitalist system. Frederic Engels in A Critique of Political Economy put it this way:
The law of competition is that demand and supply always strive to complement each other, and therefore never do so…If demand is greater than supply, the price rises and, as a result, supply is to a certain degree stimulated. As soon as it comes to the market, prices fall; and if it becomes greater than demand, then the fall in prices is so significant that demand is once again stimulated. So it goes on unending – a perpetually unhealthy state of affairs…The economist comes along with his lovely theory of demand and supply, proves to you that “one can never produce too much,” and practice replies with trade crises, which reappear a regularly as the comets.
A socialist economy could plan collectively and democratically how much of whatever needs to be produced. There is disagreement among socialist about how centralized this would be. Some Socialists still see a place for a market, as was present in the decentralized self-management collectives in Yugoslavia.
The ultimate goal of Socialism is to create a classless society, with no rich and no poor. Everyone will have equivalent relationships to the means of production. This doesn’t mean absolute equality – there may be pay differentials based on need and type of job. But everyone’s fundamental needs will be met, and no one will get rich at the expense of others. Society will be structured along the line of the old slogan by Louis Blanc, “From each according to his or her abilities, to each according to his or her needs.”
For this goal to be reached, a new ethics will have to be cultivated, in which cooperation replaces competition and conflict. Some people will object to this as “contrary to human nature.” Many socialists (and anthropologists) believe that human nature is not set in stone, but rather that it is a product of our environment. As Dorothy Day, founder of the Catholic Worker movement, put it, “ We want a society where it is easier for people to be good.” Even if we were to accept that humans are evil by nature, is this a reason for society to cater to such instincts? This seems an argument for murder, rape, and slavery as much as for competition or war. But we need not deny self-interest in advocating cooperation. We need to equate self-interest with class interest and ultimately our survival!
In doing so, we will need to identify what Marx called “false consciousness” – the tendency of the working class to mistakenly identify its interests with the interests of its rulers, and the widespread belief that “anyone can get ahead in this society.” In fact, the odds are four to one that you will die in the same social class in which you were born.