What Socialism Is and Is Not

What Socialism Is and Is Not

Socialists are at a minimum committed to economic planning that goes counter to the operation of an economy in which private firms predominate and profits are distributed among shareholders and managers. A system of this kind necessarily perpetuates the class division between a wealthy minority and a propertyless majority. A capitalist economy, moreover, can only respond to “effective demand” backed by actual purchasing power. It operates for the benefit of paying customers only and does not recognize the existence of other people. In consequence it normally fails to satisfy basic material needs except in a roundabout way that is not to everyone’s taste. To put it crudely, the logic of the system entails the production of luxury goods for the few, rather than the provision of food, clothing, and decent housing for the many.

This is not due to the bad will or imbecility of those in control: it follows logically from the operation of the market. In an egalitarian community this would not happen, since all customers would have approximately the same purchasing power, but bourgeois society is not egalitarian. The result is that social inequalities are constantly reproduced and even rendered more acute, even though society grows richer and there is some rise in real incomes. The built-in automatism is such that those who start off with material advantages (including advantages in skill, training, and education) secure a disproportionate share of the social product. “The price mechanism rewards people according to the scarcity of resources (labor and property) that they possess, but it does not itself contain any mechanism for equalizing the distribution of scarcities. For justice in distribution we clearly have to summon the forces of the state.”

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