To what extent do socialists agree on the economy?

Although socialists are united in their recognition of the atomising effects of capitalism, it will be argued that there is nevertheless substantial, irreconcilable divergence within socialism on the economy. ‘The economy’ can be defined as the relations between different economic agents. On the one hand, Marxists assert that capitalism is inherently exploitative, and is doomed to collapse as a result of its internal contradictions. On the other, social democrats and third-way proponents argue that capitalism can be reformed, and that the ‘internal contradictions’ that Marx predicted had not materialised. However, there are also significant differences within each of these individual strands, particularly within the revolutionary socialist tradition.

All socialists agree that capitalism can have detrimental consequences for the wellbeing of the general population. Though there is divergence on the extent to which capitalism should therefore be reformed, Marxists, democratic socialists and advocates of the third-way accept that a free market economy can have atomising effects, destroying bonds of community and mutual recognition (similar to Durkheim’s ‘anomie’). Marx, for instance, argued that capitalism alienates the workers from each other and the products of their labour, whilst Giddens accepted that the ‘selfish’ brand of capitalism of Thatcher ignores the underlying tendency of humans towards sympathy and cooperation, stressing the importance of community. Socialists similarly recognise that capitalism produces inequality, which can be economically inefficient and socially destructive; Anthony Crosland, a social democrat, therefore argued in ‘The Future of Socialism’ for programs of income redistribution, whilst both Giddens and Crosland support of the idea of ‘equality of opportunity’. Though revolutionary socialists disagree that capitalism can be reformed, asserting that it is inherently exploitative, there is nevertheless agreement between Rosa Luxembourg and Marx that capitalism is doomed to collapse and must be replaced by a communist system. Further, both Luxembourg and Giddens can be seen to recognise the attributes of a globalised capitalist system. Luxembourg, in ‘the Accumulation of Capital’, foresaw the global spread of the free market into less economically developed markets, whilst Giddens recognised that the dominance of globalisation meant countries had to provide competitive economic policies. On balance, though, these areas of agreement are exceeded by the substantial and irreconcilable divergence among socialists on the economy.

Though socialists agree that inequality is generally a destructive force, they do not agree on the extent to which it should be reduced. There is a clear difference between Marxists, who advocate absolute equality, and social democrats and third-way proponents, who argue that this is economically impractical. Instead, Crosland and Giddens place far more emphasis on equality of opportunity. Nevertheless, there is a clear distinction between social democrats and third way proponents. Social democrats accept widespread wealth redistribution to achieve relative equality, though Giddens rejected the extensive social engineering that underpinned such schemes. Instead, in his view, a ‘social investment state’ would provide a ‘contract’ between government and citizen so as to discourage a culture of dependency. Socialists also strongly disagree on the ownership of the economy, as utopian socialists such as Emile Babeuf thought that the origins of private property lay in violence and exploitation; others, such as Charles Fourier, advocated the organisation of society into ‘phalanxes’ where workers are able to democratically control the means of production. However, Beatrice Webb thought that the centralised state should gradually take over the running of public services. Assuming workers to be too ‘self-interested’ and selfish to run their own affairs, she thought that socialism could only be delivered through the coordinated efforts of highly trained specialists and administrators. Anthony Crosland, however, thought that the collective ownership of the economy in post-war Britain had gone far enough, theorising that the internal contradictions of capitalism that Marx had predicted (including the increasing division between worker and capital owner) had not materialised due to the dispersal of business ownership through the extension of democracy and industrial bargaining. Further, Giddens entirely rejected state ownership of the economy, advocating the importance of private property and asserting the primacy of the market over the government - in his view, ‘top down’ state intervention was both ineffective and inefficient.

In conclusion, therefore, socialists disagree far more on the economy than they agree. There are significant, irreconcilable differences between the various strands of socialism, for instance, democratic socialists think that capitalism can be gradually reformed and replaced with socialism (through Webb’s ‘inevitability of gradualness’), whilst social democrats and third way proponents disagree that capitalism will ‘replaced’. Revolutionary socialists, meanwhile, state that capitalism cannot be reformed, as it is inherently exploitative; this particular contrast was clearly highlighted by the antagonistic relationship between Luxembourg and Eduard Bernstein. There is a clear contrast between the Marxist notion - of the inherent contradictions in capitalism, rejection of private property, and belief that capitalism alienates humans from their cooperative nature - and the view proposed by Giddens that capitalism even encouraged positive attributes like responsibility. Within the revolutionary socialist tradition, Marx and Luxembourg disagreed about the economic circumstances through which revolution could arise (Luxembourg arguing that it could occur spontaneously in societies that had not reached ‘late-stage’ capitalism). Though all socialists recognise that an ideal society is one which is more equal, where there are bonds of mutual cooperation rather than an ‘atomistic’ collection of individuals, overall socialists disagree far more on the economy than they agree.

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