Thank you for this clear explanation! It's great to see some "here's where socialisms differ" analysis without the piece reading like some "here's why these people aren't real socialists, unlike my infallible political project!"
Um. I think you may have overlooked non-state socialism (Libertarian Socialism, Council Communism, Anarcho-Communism, Syndicalism, Mutualism etc.).
A Type IIII socialist project is one that is also committed to socializing the economy but sets as one of its key objectives the removal of all government through an insurrection (or prefiguration, transition, or collapse).
One extra wrinkle in this typology is that some "Type 2" democratic socialists see "Type 1" social democracy as a viable "stopgap" goal, if not the desired final outcome. It may be fair to describe the current DSA consensus as "build towards socialism, but stop along the road of social democracy on our way there".
I like the piece but I’d say your note 4 is the most important part, which is not addressed in full. Too many on the left are dreaming about a future and (hopefully) classless society focused on common welfare, but they overlook the fact that an existing ruling/owning/capitalist class must be defeated by some means in order to get there. And that class isn’t going quietly. Nor are they going without first employing massive state violence, which they have at the ready, no matter how peaceful, slow, or democratic the takeover is. They know it’s coming, because they have class consciousness already, and they will fight tooth and claw to keep or increase(!) their power.
We are all guilty at some point of focusing too much on the end goal and not the steps required to achieve it, but some of us are not growing out of that.
I would go further and call type 1 Democratic Socialists, type 2 Socialists and type 3 Communists
Communism in practice has meant governments controlled by the Communist Party. These governments came to power by overthrowing a prior regime through revolution or coup, making them type III.
Socialism could involve something as simple as limiting limited liability only to worker-owned and controlled corporations combined with a vigorous tort system. Big worker-owned firms would benefit from limited liability. The owners of private firms would be personally responsible for anything the firm did. An employee accidently releases some toxic chemicals that leads to several deaths. The firm owners are accomplices and tried and sentenced along with the employee. Under today's system, shareholders are not responsible for anything the firm they own shares in does. Executives can only be convicted is there is evidence they knew about it and did not act. Socialism would remove this protection over a period of time, during which firms would engage in LBOs transferring ownership from shareholders to employees.
In such a world there would still be a lot of private enterprise. It would just be on a smaller scale. An entrepreneur who grows his company to a too-big-to-manage-personally size would file for incorporation as an employee-owned firm and sell his interest to is employees. He would then use the money either to start his new business or to buy an annuity and retire. The advantage of socialism over communism is it retains the dynamism of capitalist economies, while the communist countries become sclerotic and hidebound.
Democratic socialism would mean creating socialist structures within capitalist economies like you see in the Nordic countries or "Rhine capitalism" in Germany. This system provides a good deal for workers under both stakeholder and shareholder capitalism, but at some cost in dynamism.
Finally, there would be social democrats. These would be like the New Dealers, who imposed environmental constraints on a capitalist economy such a ban on stock buybacks, tax dividends as ordinary income, and high marginal tax rates. The first two remove a direct method of maximizing shareholder value (buyback boosting share price while dividends give money to shareholders). The latter makes high levels of monetary compensation for executives uneconomic for the firm, so they resort to non-monetary compensation (in-kind and status-based). Stock options do not make sense in such a world and their use is greatly diminished. This creates a situation in which executives are not incented to focus on shareholder value above all else and have a harder time doing so anyway since they can't do buybacks and paying dividends means most of it goes to the tax man, so they don't do that. This forces them to invest for growth rather than higher stock price.
This is how the New Deal economy worked. It is the premier example of social democracy in the scheme I am presenting. Its main advantage was it was actually put into place in the US, a place where Socialism simply never got traction due to what socialists called "American exceptionalism"
Thank you for this, I’ve been sorting out potential strategy and approach in my mind and this perfectly explains/lays it out.
Help me make sure I’m understanding/getting this right — so social democrats are Type I and they basically want to provide and conserve an abundant social safety net but not ultimately socialize the entire economy (seize the means of production)?
If that’s so, I would say I’m kind of in between Type I and Type II (lol) in that I think most of life is privy to that quote from Back to the Future - “I guess you guys aren’t ready for that yet; but your kids are gonna love it.”
By which I mean: I think people are so ensconced by capitalist realism and the neoliberal status quo (especially in America, my GOD) that even the suggestion of, say, free buses is “radical communist.” Perhaps we first work to get these basic fundamentals (and build more labor power inside firms) like they have in some social democratic countries/cities with the ultimate goal of socializing the economy.
I know it sucks because we want to change everything all at once, but Americans are babies and sometimes we need to take baby steps, idk. Again - not like this is ideal, but if we can get back to like FDR new deal basics as groundwork and start pushing from there AND to also learn from history/our mistakes that we need to have a strategy to preserve that, like you correctly mentioned about building and maintaining popular power. It kind of feels like post FDR people either got lazy or complacent or ignorant and the neolibs were able to come in and ratchet everything back.
And I know I know, FDR wasn’t a socialist, but you know what I mean.
Hope to see more like this and go into more detail
"Does a socialist project respect private ownership rights, or is it trying to socialize (take under public or cooperative control) most productive assets?"
Even the Soviet Union still had private ownership rights. They had self-employed people. So that is a misnomer.
As for me, the only private ownership of the means of production should be small local businesses and maybe some small real estate investors that own duplexes. Everything else (except the HR coops below) should be socialized and owned by the public with the exclusive rights to the profits. These businesses can be owned at different levels of government. Production would be contracted out to private management-labor coops/staffing firms. These human capital firms may be quite large and nation-wide. In addition, the overall income distribution nation-wide would be democratically determined and based on principles of equity.
Thank you for this clear explanation! It's great to see some "here's where socialisms differ" analysis without the piece reading like some "here's why these people aren't real socialists, unlike my infallible political project!"
Um. I think you may have overlooked non-state socialism (Libertarian Socialism, Council Communism, Anarcho-Communism, Syndicalism, Mutualism etc.).
A Type IIII socialist project is one that is also committed to socializing the economy but sets as one of its key objectives the removal of all government through an insurrection (or prefiguration, transition, or collapse).
One extra wrinkle in this typology is that some "Type 2" democratic socialists see "Type 1" social democracy as a viable "stopgap" goal, if not the desired final outcome. It may be fair to describe the current DSA consensus as "build towards socialism, but stop along the road of social democracy on our way there".
I like the piece but I’d say your note 4 is the most important part, which is not addressed in full. Too many on the left are dreaming about a future and (hopefully) classless society focused on common welfare, but they overlook the fact that an existing ruling/owning/capitalist class must be defeated by some means in order to get there. And that class isn’t going quietly. Nor are they going without first employing massive state violence, which they have at the ready, no matter how peaceful, slow, or democratic the takeover is. They know it’s coming, because they have class consciousness already, and they will fight tooth and claw to keep or increase(!) their power.
We are all guilty at some point of focusing too much on the end goal and not the steps required to achieve it, but some of us are not growing out of that.
I would go further and call type 1 Democratic Socialists, type 2 Socialists and type 3 Communists
Communism in practice has meant governments controlled by the Communist Party. These governments came to power by overthrowing a prior regime through revolution or coup, making them type III.
Socialism could involve something as simple as limiting limited liability only to worker-owned and controlled corporations combined with a vigorous tort system. Big worker-owned firms would benefit from limited liability. The owners of private firms would be personally responsible for anything the firm did. An employee accidently releases some toxic chemicals that leads to several deaths. The firm owners are accomplices and tried and sentenced along with the employee. Under today's system, shareholders are not responsible for anything the firm they own shares in does. Executives can only be convicted is there is evidence they knew about it and did not act. Socialism would remove this protection over a period of time, during which firms would engage in LBOs transferring ownership from shareholders to employees.
In such a world there would still be a lot of private enterprise. It would just be on a smaller scale. An entrepreneur who grows his company to a too-big-to-manage-personally size would file for incorporation as an employee-owned firm and sell his interest to is employees. He would then use the money either to start his new business or to buy an annuity and retire. The advantage of socialism over communism is it retains the dynamism of capitalist economies, while the communist countries become sclerotic and hidebound.
Democratic socialism would mean creating socialist structures within capitalist economies like you see in the Nordic countries or "Rhine capitalism" in Germany. This system provides a good deal for workers under both stakeholder and shareholder capitalism, but at some cost in dynamism.
Finally, there would be social democrats. These would be like the New Dealers, who imposed environmental constraints on a capitalist economy such a ban on stock buybacks, tax dividends as ordinary income, and high marginal tax rates. The first two remove a direct method of maximizing shareholder value (buyback boosting share price while dividends give money to shareholders). The latter makes high levels of monetary compensation for executives uneconomic for the firm, so they resort to non-monetary compensation (in-kind and status-based). Stock options do not make sense in such a world and their use is greatly diminished. This creates a situation in which executives are not incented to focus on shareholder value above all else and have a harder time doing so anyway since they can't do buybacks and paying dividends means most of it goes to the tax man, so they don't do that. This forces them to invest for growth rather than higher stock price.
This is how the New Deal economy worked. It is the premier example of social democracy in the scheme I am presenting. Its main advantage was it was actually put into place in the US, a place where Socialism simply never got traction due to what socialists called "American exceptionalism"
https://mikealexander.substack.com/p/what-is-neoliberalism-an-empirical
Thank you for this, I’ve been sorting out potential strategy and approach in my mind and this perfectly explains/lays it out.
Help me make sure I’m understanding/getting this right — so social democrats are Type I and they basically want to provide and conserve an abundant social safety net but not ultimately socialize the entire economy (seize the means of production)?
If that’s so, I would say I’m kind of in between Type I and Type II (lol) in that I think most of life is privy to that quote from Back to the Future - “I guess you guys aren’t ready for that yet; but your kids are gonna love it.”
By which I mean: I think people are so ensconced by capitalist realism and the neoliberal status quo (especially in America, my GOD) that even the suggestion of, say, free buses is “radical communist.” Perhaps we first work to get these basic fundamentals (and build more labor power inside firms) like they have in some social democratic countries/cities with the ultimate goal of socializing the economy.
I know it sucks because we want to change everything all at once, but Americans are babies and sometimes we need to take baby steps, idk. Again - not like this is ideal, but if we can get back to like FDR new deal basics as groundwork and start pushing from there AND to also learn from history/our mistakes that we need to have a strategy to preserve that, like you correctly mentioned about building and maintaining popular power. It kind of feels like post FDR people either got lazy or complacent or ignorant and the neolibs were able to come in and ratchet everything back.
And I know I know, FDR wasn’t a socialist, but you know what I mean.
Hope to see more like this and go into more detail
"Does a socialist project respect private ownership rights, or is it trying to socialize (take under public or cooperative control) most productive assets?"
Even the Soviet Union still had private ownership rights. They had self-employed people. So that is a misnomer.
As for me, the only private ownership of the means of production should be small local businesses and maybe some small real estate investors that own duplexes. Everything else (except the HR coops below) should be socialized and owned by the public with the exclusive rights to the profits. These businesses can be owned at different levels of government. Production would be contracted out to private management-labor coops/staffing firms. These human capital firms may be quite large and nation-wide. In addition, the overall income distribution nation-wide would be democratically determined and based on principles of equity.
I'm way ahead of you. :)