## 1. Socialism and Capitalism



Socialism is best defined in contrast with capitalism, as socialism
has arisen both as a critical challenge to capitalism, and as a
proposal for overcoming and replacing it. In the classical, Marxist
definition (G.A. Cohen 2000a: ch.3; Fraser 2014: 57-9),
capitalism involves certain *relations of production*. These
comprise certain forms of control over the *productive
forces*--the *labor power* that workers deploy in
production and the *means of production* such as natural
resources, tools, and spaces they employ to yield goods and
services--and certain social patterns of economic interaction
that typically correlate with that control. Capitalism displays the
following constitutive features:



> 
> * (i) The bulk of the
> means of production is *privately owned and
> controlled*.
> * (ii) People legally
> own their labor power. (Here capitalism differs from slavery and
> feudalism, under which systems some individuals are entitled to
> control, whether completely or partially, the labor power of
> others).
> * (iii) *Markets*
> are the main mechanism allocating inputs and outputs of production and
> determining how societies' productive surplus is used, including
> whether and how it is consumed or invested.
> 
> 
> 



An additional feature that is typically present wherever
(i)-(iii) hold, is that:



> 
> * (iv) There is a
> *class division* between capitalists and workers, involving
> specific relations (e.g., whether of bargaining, conflict, or
> subordination) between those classes, and shaping the labor market,
> the firm, and the broader political process.
> 
> 
> 



The existence of wage labor is often seen by socialists as a necessary
condition for a society to be counted as capitalist (Schweickart 2002
[2011: 23]). Typically, workers (unlike capitalists) must sell their
labor power to make a living. They sell it to capitalists, who (unlike
the workers) control the means of production. Capitalists typically
subordinate workers in the production process, as capitalists have
asymmetric decision-making power over what gets produced and how it
gets produced. Capitalists also own the output of production and sell
it in the market, and they control the predominant bulk of the flow of
investment within the economy. The relation between capitalists and
workers can involve cooperation, but also relations of conflict (e.g.,
regarding wages and working conditions). This more-or-less
antagonistic power relationship between capitalists and workers plays
out in a number of areas, within production itself, and in the broader
political process, as in both the economic and political domains
decisions are made about who does what, and who gets what.



There are possible economic systems that would present exceptions, in
which (iv) does not hold even if (i), (ii) and (iii) all obtain.
Examples here are a society of independent commodity producers or a
property-owning democracy (in which individuals or groups of workers
own firms). There is debate, however, as to how
feasible--accessible and stable--these are in a modern
economic environment (O'Neill 2012).



Another feature that is also typically seen as arising where
(i)-(iii) hold is this:



> 
> * (v) Production is
> primarily oriented to *capital accumulation* (i.e., economic
> production is primarily oriented to profit rather than to the
> satisfaction of human needs). (G.A. Cohen 2000a; Roemer
> 2017).
> 
> 
> 



In contrast to capitalism, socialism can be defined as a type of
society in which, at a minimum, (i) is turned into (i\*):



> 
> * (i\*) The bulk of the
> means of production is under social, democratic control.
> 
> 
> 



Changes with regard to features (ii), (iii), and (v) are hotly debated
amongst socialists. Regarding (ii), socialists retain the view that
workers should control their labor power, but many do not affirm the
kind of absolute, libertarian property rights in labor power that
would, e.g., prevent taxation or other forms of mandatory contribution
to cater for the basic needs of others (G.A. Cohen 1995). Regarding
(iii), there is a recent burgeoning literature on "market
socialism", which we discuss below, where proposals are advanced
to create an economy that is socialist but nevertheless features
extensive markets. Finally, regarding (v), although most socialists
agree that, due to competitive pressures, capitalists are bound to
seek profit maximization, some puzzle over whether when they do this,
it is "greed and fear" and not the generation of resources
to make others besides themselves better-off that is the dominant,
more basic drive and hence the degree to which profit-maximization
should be seen as a normatively troubling phenomenon. (See Steiner
2014, in contrast with G.A. Cohen 2009, discussing the case of
capitalists amassing capital to give it away through charity.)
Furthermore, some socialists argue that the search for profits in a
market socialist economy is not inherently suspicious (Schweickart
2002 [2011]). Most socialists, however, tend to find the profit motive
problematic.



An important point about this definition of socialism is that
socialism is not equivalent to, and is arguably in conflict with,
statism. (i\*) involves expansion of social power--power based on
the capacity to mobilize voluntary cooperation and collective
action--as distinct from state power--power based on the
control of rule-making and rule enforcing over a territory--as
well of economic power--power based on the control of material
resources (Wright 2010). If a state controls the economy but is not in
turn democratically controlled by the individuals engaged in economic
life, what we have is some form of statism, not socialism (see also
Arnold n.d. in
 Other Internet Resources (OIR);
 Dardot & Laval 2014).


## 2. Three Dimensions of Socialist Views



When characterizing socialist views, it is useful to distinguish
between three dimensions of a conception of a social justice (Gilabert
2017a). We identify these three dimensions as:



> 
> * (DI) the core ideals
> and principles animating that conception of justice;
> * (DII) the social
> institutions and practices implementing the ideals specified at
> DI;
> * (DIII) the processes
> of transformation leading agents and their society from where they are
> currently, to the social outcome specified in DII.
> 
> 
> 



The characterization of capitalism and socialism in the previous
section focuses on the social institutions and practices constituting
each form of society (i.e., on DII). We step back from this
institutional dimension in section 3, below, to consider the central
normative commitments of socialism (DI) and to survey their deployment
in the socialist critique of capitalism. We then, in
 section 4,
 engage in a more detailed discussion of accounts of the institutional
shape of socialism (DII), exploring the various proposed
implementations of socialist ideals and principles outlined under DI.
We turn to accounts of the transition to socialism (DIII) in
 section 5.


## 3. Socialist Critiques of Capitalism and their Grounds (Dimension DI)



Socialists have condemned capitalism by alleging that it typically
features exploitation, domination, alienation, and inefficiency.
Before surveying these criticisms, it is important to note that they
rely on various ideals and principles at DI. We first mention these
grounds briefly, and then elaborate on them as we discuss their
engagement in socialists' critical arguments. We set aside the
debate, conducted mostly during the 1980s and largely centered on the
interpretation of Marx's writings, as to whether the
condemnation of capitalism and the advocacy for socialism relies (or
should rely), on moral grounds (Geras 1985; Lukes 1985; Peffer 1990).
Whereas some Marxist socialists take the view that criticism of
capitalism can be conducted without making use--either explicitly
or implicitly--of arguments with a moral foundation, our focus is
on arguments that do rely on such grounds.


### 3.1 Socialist Principles



Socialists have deployed ideals and principles of equality, democracy,
individual freedom, self-realization, and community or solidarity.
Regarding *equality*, they have proposed strong versions of the
principle of equality of opportunity according to which everyone
should have "broadly equal access to the necessary material and
social means to live flourishing lives" (Wright 2010: 12; Roemer
1994a: 11-4; Nielsen 1985). Some, but by no means all,
socialists construe equality of opportunity in a luck-egalitarian way,
as requiring the neutralization of inequalities of access to advantage
that result from people's circumstances rather than their
choices (G.A. Cohen 2009: 17-9). Socialists also embrace the
ideal of *democracy*, requiring that people have "broadly
equal access to the necessary means to participate meaningfully in
decisions" affecting their lives (Wright 2010: 12; Arnold n.d.
 [OIR]:
 sect. 4). Many socialists say that democratic participation should be
available not only at the level of governmental institutions, but also
in various economic arenas (such as within the firm). Third,
socialists are committed to the importance of *individual
freedom*. This commitment includes versions of the standard ideas
of negative liberty and non-domination (requiring security from
inappropriate interference by others). But it also typically includes
a more demanding, positive form of self-determination, as the
"real freedom" of being able to develop one's own
projects and bring them to fruition (Elster 1985: 205; Gould 1988: ch.
1; Van Parijs 1995: ch. 1; Castoriadis 1979). An ideal of *self-realization*
through autonomously chosen activities featuring people's
development and exercise of their creative and productive capacities
in cooperation with others sometimes informs socialists'
positive views of freedom and equality--as in the view that there
should be a requirement of access to the conditions of
self-realization at work (Elster 1986: ch. 3). Finally, and relatedly,
socialists often affirm an idea of *community* or
*solidarity*, according to which people should organize their
economic life so that they treat the freedom and well-being of others
as intrinsically significant. People should recognize positive duties
to support other people, or, as Einstein (1949) put it, a "sense
of responsibility for [their] fellow men". Or, as Cohen put it,
people should "care about, and, where necessary and possible,
care for, one another, and, too, care that they care about one
another" (G.A. Cohen 2009: 34-5). Community is sometimes
presented as a moral ideal which is not itself a demand of justice but
can be used to temper problematic results permitted by some demands of
justice (such as the inequalities of outcome permitted by a
luck-egalitarian principle of equality of opportunity (G.A. Cohen
2009)). However, community is sometimes presented within socialist
views as a demand of justice itself (Gilabert 2012). Some socialists
also take solidarity as partly shaping a desirable form of
"social freedom" in which people are able not only to
advance their own good but also to act with and for others (Honneth
2015 [2017: ch. I]).



Given the diversity of fundamental principles to which socialists
commonly appeal, it is perhaps unsurprising that few attempts have
been made to link these principles under a unified framework. A
suggested strategy has been to articulate some aspects of them as
requirements flowing from what we might call the *Abilities / Needs
Principle,* following Marx's famous dictum, in *The
Critique of the Gotha Program*, that a communist society should be
organized so as to realize the goals of producing and distributing
"From each according to [their] abilities, to each according to
[their] needs". This principle, presented with brevity and in
the absence of much elaboration by Marx (Marx 1875 [1978b: 531]) has
been interpreted in different ways. One, descriptive interpretation
simply takes it to be a prediction of how people will feel motivated
to act in a socialist society. Another, straightforwardly normative
interpretation construes the Marxian dictum as stating duties to
contribute to, and claims to benefit from, the social
product--addressing the allocation of both the burdens and
benefits of social cooperation. Its fulfillment would, in an
egalitarian and solidaristic fashion, empower people to live
flourishing lives (Carens 2003, Gilabert 2015). The normative
principle itself has also been interpreted as an articulation of the
broader, and more basic, idea of *human dignity.* Aiming at
*solidaristic empowerment*, this idea could be understood as
requiring that we support people in the pursuit of a flourishing life
by not blocking, and by enabling, the development and exercise of
their valuable capacities, which are at the basis of their moral
status as agents with dignity (Gilabert 2017b).


### 3.2 Socialist Charges against Capitalism


#### 3.2.1 Exploitation



The first typical charge leveled by socialists is that capitalism
features the exploitation of wage workers by their capitalist
employers. Exploitation has been characterized in two ways. First, in
the so-called "technical" Marxist characterization,
workers are exploited by capitalists when the value embodied in the
goods they can purchase with their wages is inferior to the value
embodied in the goods they produce--with the capitalists
appropriating the difference. To maximize the profit resulting from
the sale of what the workers produce, capitalists have an incentive to
keep wages low. This descriptive characterization, which focuses on
the flow of surplus labor from workers to capitalists, differs from
another common, normative characterization of exploitation, according
to which exploitation involves taking unfair, wrongful, or unjust
advantage of the productive efforts of others. An obvious question is
when, if ever, incidents of exploitation in the technical sense
involve exploitation in the normative sense. When is the transfer of
surplus labor from workers to capitalists such that it involves
wrongful advantage taking of the former by the latter? Socialists have
provided at least four answers to this question. (For critical surveys
see Arnsperger and Van Parijs 2003: ch. III; Vrousalis 2018; Wolff
1999).



The first answer is offered by the *unequal exchange account*,
according to which *A* exploits *B* if and only if in their
exchange *A* gets more than *B* does. This account
effectively collapses the normative sense of exploitation into the
technical one. But critics have argued that this account fails to
provide sufficient conditions for exploitation in the normative sense.
Not every unequal exchange is wrongful: it would not be wrong to
transfer resources from workers to people who (perhaps through no
choice or fault of their own) are unable to work.



A second proposal is to say that *A* exploits *B* if and
only if *A* gets surplus labor from *B* in a way that is
coerced or forced. This *labor entitlement account* (Holmstrom
1977; Reiman 1987) relies on the view that workers are entitled to the
product of their labor, and that capitalists wrongly deprive them of
it. In a capitalist economy, workers are compelled to transfer surplus
labor to capitalists on pain of severe poverty. This is a result of
the coercively enforced system of private property rights in the means
of production. Since they do not control means of production to secure
their own subsistence, workers have no reasonable alternative to
selling their labor power to capitalists and to toil on the terms
favored by the latter. Critics of this approach have argued that it,
like the previous account, fails to provide sufficient conditions for
wrongful exploitation because it would (counterintuitively) have to
condemn transfers from workers to destitute people unable to work.
Furthermore, it has been argued that the account fails to provide
necessary conditions for the occurrence of exploitation. Problematic
transfers of surplus labor can occur without coercion. For example,
*A* may have sophisticated means of production, not obtained from
others through coercion, and hire *B* to work on them at a
perhaps unfairly low wage, which *B* voluntarily accepts despite
having acceptable, although less advantageous, alternatives (Roemer
1994b: ch. 4).



The third, *unfair distribution of productive endowments
account* suggests that the core problem with capitalist
exploitation (and with other forms of exploitation in class-divided
social systems) is that it proceeds against a background distribution
of initial access to productive assets that is inegalitarian. *A*
is an exploiter, and *B* is exploited, if and only if *A*
gains from *B*'s labor and *A* would be worse off, and
*B* better off, in an alternative hypothetical economic
environment in which the initial distribution of assets was equal
(with everything else remaining constant) (Roemer 1994b: 110). This
account relies on a luck-egalitarian principle of equality of
opportunity. (According to luck-egalitarianism, no one should be made worse-off
than others due to circumstances beyond their control.) Critics have
argued that, because of that, it fails to provide necessary conditions
for wrongful exploitation. If *A* finds *B* stuck in a pit,
it would be wrong for *A* to offer *B* rescue only if
*B* signs a sweatshop contract with *A*--even if
*B* happened to have fallen into the pit after voluntarily taking
the risk to go hiking in an area well known to be dotted with such
perilous obstacles (Vrousalis 2013, 2018). Other critics worry that
this account neglects the centrality of relations of power or
dominance between exploiters and exploited (Veneziani 2013).



A fourth approach directly focuses on the fact that exploitation
typically arises when there is a significant power asymmetry between
the parties involved. The more powerful instrumentalize and take
advantage of the vulnerability of the less powerful to benefit from
this asymmetry in positions (Goodin 1987). A specific version of this
view, the *domination for self-enrichment account* (Vrousalis
2013, 2018), says that *A* exploits *B* if *A* benefits
from a transaction in which *A* dominates *B*. (On this
account, domination involves a disrespectful use of *A*'s
power over *B*.) Capitalist property rights, with the resulting
unequal access to the means of production, put propertyless workers at
the mercy of capitalists, who use their superior power over them to
extract surplus labor. A worry about this approach is that it does not
explain when the more powerful party is taking too much from the less
powerful party. For example, take a situation where *A* and
*B* start with equal assets, but *A* chooses to work hard
while *B* chooses to spend more time at leisure, so that at a
later time *A* controls the means of production, while *B*
has only their own labor power. We imagine that *A* offers
*B* employment, and then ask, in light of their *ex ante*
equal position, at what level of wage for *B* and profit for
*A* would the transaction involve wrongful exploitation? To come
to a settled view on this question, it might be necessary to combine
reliance on a principle of freedom as non-domination with appeal to
additional socialist principles addressing just
distribution--such as some version of the principles of equality
and solidarity mentioned above in
 section 4.1.


#### 3.2.2 Interference and domination



Capitalism is often defended by saying that it maximally extends
people's freedom, understood as the absence of interference.
Socialism would allegedly depress that freedom by prohibiting or
limiting capitalist activities such as setting up a private firm,
hiring wage workers, and keeping, investing, or spending profits.
Socialists generally acknowledge that a socialist economy would
severely constrain some such freedoms. But they point out that
capitalist property rights also involve interference. They remind us
that "private property by one person presupposes non-ownership
on the part of other persons" (Marx 1991: 812) and warn that
often, although 



> 
> 
> liberals and libertarians see the freedom which is intrinsic to
> capitalism, they overlook the unfreedom which necessarily accompanies
> capitalist freedom. (G.A. Cohen 2011: 150) 
> 
> 
> 



Workers could and would be coercively interfered with if they tried to
use means of production possessed by capitalists, to walk away with
the products of their labor in capitalist firms, or to access
consumption goods they do not have enough money to buy. In fact, every
economic system opens some zones of non-interference while closing
others. Hence the appropriate question is not whether capitalism or
socialism involve interference--they both do--but whether
either of them involves more net interference, or more troubling forms
of interference, than the other. And the answer to that question is
far from obvious. It could very well be that most agents in a
socialist society face less (troublesome) interference as they pursue
their projects of production and consumption than agents in a
capitalist society (G.A. Cohen 2011: chs. 7-8).



Capitalist economic relations are often defended by saying that they
are the result of free choices by consenting adults. Wage workers are
not slaves or serfs--they have the legal right to refuse to work
for capitalists. But socialists reply that the relationship between
capitalists and workers actually involves domination. Workers are
inappropriately subject to the will of capitalists in the shaping of
the terms on which they work (both in the spheres of exchange and
production, and within the broader political process). Workers'
consent to their exploitation is given in circumstances of deep
vulnerability and asymmetry of power. According to Marx, two
conditions help explain workers' apparently free choice to enter
into a nevertheless exploitative contract: (1) in capitalism (unlike
in feudalism or slave societies) workers own their labor power,
*but* (2) they do not own means of production. Because of their
deprivation (2), workers have no reasonable alternative to using their
entitlement (1) to sell their labor power to the capitalists--who
do own the means of production (Marx 1867 [1990: 272-3]).
Through labor-saving technical innovations spurred by competition,
capitalism also constantly produces unemployment, which weakens the
bargaining power of individual workers further. Thus, Marx says that
although workers voluntarily enter into exploitative contracts, they
are "compelled [to do so] by social conditions". 



> 
> 
> The silent compulsion of economic relations sets the seal on the
> domination of the capitalist over the worker.... [The
> worker's] dependence on capital ... springs from the
> conditions of production themselves, and is guaranteed in perpetuity
> by them. (Marx 1867 [1990: 382, 899]) 
> 
> 
> 



Because of the deep background inequality of power resulting from
their structural position within a capitalist economy, workers accept
a pattern of economic transaction in which they submit to the
direction of capitalists during the activities of production, and
surrender to those same capitalists a disproportional share of the
fruits of their labor. Although some individual workers might be able
to escape their vulnerable condition by saving and starting a firm of
their own, most would find this extremely difficult, and they could
not all do it simultaneously within capitalism (Elster 1985:
208-16; G.A. Cohen 1988: ch. 13).



Socialists sometimes say that capitalism flouts an ideal of
non-domination as freedom from being subject to rules one has
systematically less power to shape than others (Gourevitch 2013;
Arnold 2017; Gilabert 2017b: 566-7--on which this and the
previous paragraph draw). Capitalist relations of production involve
domination and the dependence of workers on the discretion of
capitalists' choices at three critical junctures. The first,
mentioned above, concerns the labor contract. Due to their lack of
control of the means of production, workers must largely submit, on
pain of starvation or severe poverty, to the terms capitalists offer
them. The second concerns interactions in the workplace. Capitalists
and their managers rule the activities of workers by unilaterally
deciding what and how the latter produce. Although in the sphere of
circulation workers and capitalists might look (misleadingly, given
the first point) like equally free contractors striking fair deals,
once we enter the "hidden abode" of production it is clear
to all sides that what exists is relationships of intense subjection
of some to the will of others (Marx 1867 [1990: 279-80]).
Workers effectively spend many of their waking hours doing what others
dictate them to do. Third, and finally, capitalists have a
disproportionate impact on the legal and political process shaping the
institutional structure of the society in which they exploit workers,
with capitalist interests dominating the political processes which in
turn set the contours of property and labor law. Even if workers
manage to obtain the legal right to vote and create their own trade
unions and parties (which labor movements achieved in some countries
after much struggle), capitalists exert disproportionate influence via
greater access to mass media, the funding of political parties, the
threat of disinvestment and capital flight if governments reduce their
profit margin, and the past and prospective recruitment of state
officials in lucrative jobs in their firms and lobbying agencies
(Wright 2010: 81-4). At the spheres of exchange, production, and
in the broader political process, workers and capitalist have
asymmetric structural power. Consequently, the former are
significantly subject to the will of the latter in the shaping of the
terms on which they work (see further Wright 2000 [2015]). This
inequality of structural power, some socialists claim, is an affront
to workers' dignity as self-determining, self-mastering
agents.



The third point about domination mentioned above is also deployed by
socialists to say that capitalism conflicts with democracy (Wright
2010: 81-4; Arnold n.d.
 [OIR]:
 sect. 4; Bowles and Gintis 1986; Meiksins Wood 1995). Democracy
requires that people have roughly equal power to affect the political
process that structures their social life--or at least that
inequalities do not reflect morally irrelevant features such as race,
gender, and class. Socialists have made three points regarding the
conflict between capitalism and democracy. The first concerns
political democracy of the kind that is familiar today. Even in the
presence of multi-party electoral systems, members of the capitalist
class--despite being a minority of the population--have
significantly more influence than members of the working class.
Governments have a tendency to adapt their agendas to the wishes of
capitalists because they depend on their investment decisions to raise
the taxes to fund public policies, as well as for the variety of other
reasons outlined above. Even if socialist parties win elections, as
long as they do not change the fundamentals of the economic system,
they must be congenial to the wishes of capitalists. Thus, socialists
have argued that deep changes in the economic structure of society are
needed to make electoral democracy fulfill its promise. Political
power cannot be insulated from economic power. They also, secondly,
think that such changes may be directly significant. Indeed, as
radical democrats, socialists have argued that reducing inequality of
decision-making power within the economic sphere itself is not only
instrumentally significant (to reduce inequality within the
governmental sphere), but also intrinsically significant to increase
people's self-determination in their daily lives as economic
agents. Therefore, most democratic socialists call for a solution to
the problem of the conflict between democracy and capitalism by
extending democratic principles into the economy (Fleurbaey 2006).
Exploring the parallel between the political and economic systems,
socialists have argued that democratic principles should apply in the
economic arena as they do in the political domain, as economic
decisions, like political decisions, have dramatic consequences for
the freedom and well-being of people. Returning to the issue of the
relations between the two arenas, socialists have also argued that
fostering workers' self-determination in the economy (notably in
the workplace) enhances democratic participation at the political
level (Coutrot 2018: ch. 9; Arnold 2012; see survey on workplace
democracy in Frega et al. 2019). A third strand of argument, finally,
has explored the importance of socialist reforms for fulfilling the
ideal of a deliberative democracy in which people participate as free
and equal reasoners seeking to make decisions that actually cater for
the common good of all (J. Cohen 1989).


#### 3.2.3 Alienation



As mentioned above, socialists have included, in their affirmation of
individual freedom, a specific concern with *real* or
*effective* freedom to lead flourishing lives. This freedom is
often linked with a positive ideal of *self-realization*, which
in turn motivates a critique of capitalism as generating alienation.
This perspective informs Marx's views on the strong contrast
between productive activity under socialism and under capitalism. In
socialism, the "realm of necessity" and the
correspondingly necessary, but typically unsavory, labor required to
secure basic subsistence would be reduced so that people also access a
"realm of freedom" in which a desirable form of work
involving creativity, cultivation of talents, and meaningful
cooperation with others is available. This realm of freedom would
unleash "the development of human energy which is an end in
itself" (Marx 1991: 957-9). This work, allowing for and
facilitating individuals' self-realization, would enable the
"all-round development of the individual", and would in
fact become a "prime want" (Marx 1875 [1978b: 531]). The
socialist society would feature "the development of the rich
individuality which is all-sided in its production as in its
consumption" (Marx 1857-8 [1973: 325]); it would
constitute a "higher form of society in which the full and free
development of every individual forms the ruling principle"
(Marx 1867 [1990: 739]). By contrast, capitalism denies the majority
of the population access to self-realization at work. Workers
typically toil in tasks which are uninteresting and even stunting.
They do not control how production unfolds or what is done with the
outputs of production. And their relations with others is not one of
fellowship, but rather of domination (under their bosses) and of
competition (against their fellow workers). When alienated, 



> 
> 
> labor is *external* to the worker, i.e., it does not belong to
> his essential being; ... in his work, therefore, he does not
> affirm himself but denies himself, does not feel content but unhappy,
> does not develop freely his physical and mental energy but mortifies
> his body and ruins his mind. ... It is therefore not the
> satisfaction of a need; it is merely a *means* to satisfy needs
> external to it. (Marx 1844 [1978a: 74])
> 
> 
> 



Recent scholarship has developed these ideas further. Elster has
provided the most detailed discussion and development of the Marxian
ideal of self-realization. The idea is defined as "the full and
free actualization and externalization of the powers and the abilities
of the individual" (Elster 1986: 43; 1989: 131).
Self-actualization involves a two-step process in which individuals
develop their powers (e.g., learn the principles and techniques of
civil engineering) and then actualize those powers (e.g., design and
participate in the construction of a bridge). Self-externalization, in
turn, features a process in which individuals' powers become
visible to others with the potential beneficial outcome of social
recognition and the accompanying boost in self-respect and
self-esteem. However, Elster says that this Marxian ideal must be
reformulated to make it more realistic. No one can develop all their
powers fully, and no feasible economy would enable everyone always to
get exactly their first-choice jobs and conduct them only in the ways
they would most like. Furthermore, self-realization for and with
others (and thus also the combination of self-realization with
community) may not always work smoothly, as producers entangled in
large and complex societies may not feel strongly moved by the needs
of distant others, and significant forms of division of labor will
likely persist. Still, Elster thinks the socialist ideal of
self-realization remains worth pursuing, for example through the
generation of opportunities to produce in worker cooperatives. Others
have construed the demand for real options to produce in ways that
involve self-realization and solidarity as significant for the
implementation of the *Abilities / Needs Principle* (Gilabert
2015: 207-12), and defended a right to opportunities for
meaningful work against the charge that it violates a liberal
constraint of neutrality about conceptions of the good (Gilabert
2018b: sect. 3.3). (For more discussion on alienation and
self-realization, see Jaeggi 2014: ch. 10.)



Further scholarship explores recent changes in the organization of
production. Boltanski and Chiapello argue that since the 1980s
capitalism has partly absorbed (what they dub) the "artistic
critique" against de-skilled and heteronomous work by generating
schemes of economic activity in which workers operate in teams and
have significant decision-making powers. However, these new forms of
work, although common especially in certain knowledge-intensive
sectors, are not available to all workers, and they still operate
under the ultimate control of capital owners and their profit
maximizing strategies. They also operate in tandem with the
elimination of the social security policies typical of the
(increasingly eroded) welfare state. Thus, the "artistic"
strand in the socialist critique of capitalism as hampering
people's authenticity, creativity, and autonomy has not been
fully absorbed and should be renewed. It should also be combined with
the other, "social critique" strand which challenges
inequality, insecurity, and selfishness (Boltanski and Chiapello 2018:
Introduction, sect. 2). Other authors find in these new forms of work
the seeds of future forms of economic organization--arguing that
they provide evidence that workers can plan and control sophisticated
processes of production on their own and that capitalists and their
managers are largely redundant (Negri 2008).



The critique of alienation has also been recently developed further by
Forst (2017) by exploring the relation between alienation and
domination. On this account, the central problem with alienation is
that it involves the denial of people's autonomy--their
ability and right to shape their social life on terms they could
justify to themselves and to each other as free and equal
co-legislators. (See also the general analysis of the concept of
alienation in Leopold 2018.)


#### 3.2.4 Inefficiency



A traditional criticism of capitalism (especially amongst Marxists) is
that it is inefficient. Capitalism is prone to cyclic crises in which
wealth and human potential is destroyed and squandered. For example,
to cut costs and maximize profits, firms choose work-saving
technologies and lay off workers. But at the aggregate level, this
erodes the demand for their products, which forces firms to cut costs
further (by laying off even more workers or halting production).
Socialism would, it has been argued, not be so prone to crises, as the
rationale for production would not be profit maximization but need
satisfaction. Although important, this line of criticism is less
widespread amongst contemporary socialists. Historically, capitalism
has proved quite resilient, resurrecting itself after crises and
expanding its productivity dramatically over time. In might very well
be that capitalism is the best feasible regime if the only standard of
assessment were productivity.



Still, socialists point out that capitalism involves some significant
inefficiencies. Examples are the underproduction of public goods (such
as public transportation and education), the underpricing and
overconsumption of natural resources (such as fossil fuels and fishing
stocks), negative externalities (such as pollution), the costs of
monitoring and enforcing market contracts and private property (given
that the exploited may not be so keen to work as hard as their
profit-maximizing bosses require, and that the marginalized may be
moved by desperation to steal), and certain defects of intellectual
property rights (such as blocking the diffusion of innovation, and
alienating those who engage in creative activities because of their
intrinsic appeal and because of the will to serve the public rather
than maximize monetary reward) (Wright 2010: 55-65). Really
existing capitalist societies have introduced regulations to counter
some of these problems, at least to some extent. Examples are taxes
and constraints to limit economic activities with negative
externalities, and public funding and subsidies to sustain activities
with positive externalities which are not sufficiently supported by
the market. But, socialists insist, such mechanisms are external to
capitalism, as they limit property rights and the scope for profit
maximization as the primary orientation in the organization of the
economy. The regulations involve the hybridization of the economic
system by introducing some non-capitalist, and even socialist
elements.



There is also an important issue of whether efficiency should only be
understood in terms of maximizing production of material consumption
goods. If the metric, or the utility space, that is taken into account
when engaging in maximization assessments includes more than these
goods, then capitalism can also be criticized as inefficient on
account of its tendency to depress the availability of leisure time
(as well as to distribute it quite unequally). This carries limitation
of people's access to the various goods that leisure
enables--such as the cultivation of friendships, family, and
community or political participation. Technological innovations create
the opportunity to choose between retaining the previous level of
production while using fewer inputs (such as labor time) or
maintaining the level of inputs while producing more. John Maynard
Keynes famously held that it would be reasonable to tend towards the
prior option, and expected societies to take this path as the
technological frontier advanced (Keynes 1930/31 [2010]; Pecchi and
Piga 2010). Nevertheless, in large part because of the profit
maximization motive, capitalism displays an inherent bias in favor of
the second, arguably inferior, option. Capitalism thereby narrows the
realistic options of its constituent economic agents--both firms
and individuals. Firms would lose their competitive edge and risk
bankruptcy if they did not pursue profits ahead of the broader
interests of their workers (as their products would likely be more
expensive). And it is typically hard for workers to find jobs that pay
reasonable salaries for fewer hours of work. Socialists concerned with
expanding leisure time--and also with environmental
risks--find this bias quite alarming (see, e.g., G.A. Cohen
2000a: ch. XI). If a conflict between further increase in the
production of material objects for consumption and the expansion of
leisure time (and environmental protection) is unavoidable, then it is
not clear, all things considered, that the former should be
prioritized, especially when an economy has already reached a high
level of material productivity.


#### 3.2.5 Liberal egalitarianism and inequality in capitalism



Capitalism has also been challenged on liberal egalitarian grounds,
and in ways that lend themselves to support for socialism. (Rawls
2001; Barry 2005; Piketty 2014; O'Neill 2008a, 2012, 2017;
Ronzoni 2018). While many of John Rawls's readers long took him
to be a proponent of an egalitarian form of a capitalist welfare
state, or as one might put it "a slightly imaginary
Sweden", in fact Rawls rejected such institutional arrangements
as inadequate to the task of realizing principles of political liberty
or equality of opportunity, or of keeping material inequalities within
sufficiently tight bounds. His own avowed view of the institutions
that would be needed to realize liberal egalitarian principles of
justice was officially neutral as between a form of
"property-owning democracy", which would combine private
property in the means of production with its egalitarian distribution,
and hence the abolition of the separate classes of capitalists and
workers; and a form of liberal democratic socialism that would see
public ownership of the preponderance of the means of production, with
devolved control of particular firms (Rawls 2001: 135-40;
O'Neill and Williamson 2012). While Rawls's version of
liberal democratic socialism was insufficiently developed in his own
writings, he stands as an interesting case of a theorist whose defense
of a form of democratic socialism is based on normative foundations
that are not themselves distinctively socialist, but concerned with
the core liberal democratic values of justice and equality (see also
Edmundson 2017; Ypi 2018).



In a similar vein to Rawls, another instance of a theorist who defends
at least partially socialist institutional arrangements on liberal
egalitarian grounds was the Nobel Prize winning economist James Meade.
Giving a central place to decidedly liberal values of freedom,
security and independence, Meade argued that the likely levels of
socioeconomic inequality under capitalism were such that a capitalist
economy would need to be extensively tempered by socialist elements,
such as the development of a citizens' sovereign wealth fund, if
the economic system were to be justifiable to those living under it
(Meade 1964; O'Neill 2015
 [OIR],
 2017; O'Neill and White 2019). Looking back before Meade, J. S.
Mill can also be seen as a theorist who traveled along what we might
describe as "the liberal road to socialism", with Mill in
his *Autobiography* describing his own view as the acceptance
of a "qualified socialism" (Mill 1873 [2018]), and arguing
for a range of measures to create a more egalitarian economy,
including making the case for a steady-state rather than a
growth-oriented economy, arguing for workers' collective
ownership and self-management of firms in preference to the
hierarchical structures characteristic of most firms under capitalism,
and endorsing steep taxation of inheritance and unearned income (Mill
2008; see also Ten 1998; O'Neill 2008b, Pateman 1970). More
recently, the argument has been advanced that as capitalist economies
tend towards higher levels of inequality, and in particular with the
rapid velocity at which the incomes and wealth of the very rich in
society is increasing, many of those who had seen their normative
commitments as requiring only the mild reform of capitalist economies
might need to come to see the need to endorse more radical socialist
institutional proposals (Ronzoni 2018).


## 4. Socialist Institutional Designs (Dimension DII)



The foregoing discussion focused on socialist critiques of capitalism.
These critiques make the case that capitalism fails to fulfill
principles, or to realize values, to which socialists are committed.
But what would an alternative economic system look like which would
fulfill those principles, or realize those values--or at least
honor them to a larger extent? This brings us to dimension DII of
socialism. We will consider several proposed models. We will address
here critical concerns about both the feasibility and the desirability
of these models. Arguments comparing ideal socialist designs with
actual capitalist societies are unsatisfactory; we must compare like
with like (Nove 1991; Brennan 2014; Corneo 2017). Thus, we should
compare ideal forms of socialism with ideal forms of capitalism, and
actual versions of capitalism with actual versions of socialism. Most
importantly, we should entertain comparisons between the best feasible
incarnations of these systems. This requires formulating feasible
forms of socialism. Feasibility assessments can play out in two ways:
they may regard the (degree of) workability and stability of a
proposed socialist system once introduced, or they may regard its
(degree of) accessibility from current conditions when it is not yet
in place. We address the former concerns in this section, leaving the
latter for
 section 5
 when we turn to dimension DIII of socialism and the questions of
socialist transition or transformation.


### 4.1 Central and Participatory Planning



Would socialism do better than capitalism regarding the ideals of
equality, democracy, individual freedom, self-realization, and
solidarity? This depends on the availability of workable versions of
socialism that fulfill these ideals (or do so at least to a greater
extent than workable forms of capitalism). A first set of proposals
envision an economic system that does away with both private property
in the means of production and with markets. The first version of this
model is *central planning*. This can be understood within a
top-down, hierarchical model. A central authority gathers information
about the technical potential in the economy and about
consumers' needs and formulates a set of production objectives
which seek an optimal match between the former and the latter. These
objectives are articulated into a plan that is passed down to
intermediate agencies and eventually to local firms, which must
produce according to the plan handed down. If it works, this proposal
would secure the highest feasible levels of equal access to
consumption goods for everyone. However, critics have argued that the
model faces serious feasibility hurdles (Corneo 2017: ch. 5: Roemer
1994a: ch. 5). It is very hard for a central authority to gather the
relevant information from producers and consumers. Second, even if it
could gather enough information, the computation of an optimal plan
would require enormously complex calculations which may be beyond the
capacity of planners (even with access to the most sophisticated
technological assistance). Finally, there may be significant incentive
deficits. For example, firms might tend to exaggerate the resources
they need to produce and mislead about how much they can produce.
Without facing strong sticks and carrots (such as the prospects for
either bankruptcy and profit offered by a competitive market), firms
might well display low levels of innovation. As a result, a planned
economy would likely lag behind surrounding capitalist economies, and
their members would tend to lose faith in it. High levels of
cooperation (and willingness to innovate) could still exist if
sufficiently many individuals in this society possessed a strong sense
of duty. But critics find this unlikely to materialize, warning that
"a system that only works with exceptional individuals only
works in exceptional cases" (Corneo 2017: 127).



Actual experiments in centrally planned economies have only partially
approximated the best version of it. Thus, in addition to the problems
mentioned above (which affect even that best version), they have
displayed additional defects. For example, the system introduced in
the Soviet Union featured intense concentration of political and
economic power in the hands of an elite controlling a single party
which, in turn, controlled a non-democratic state apparatus. Despite
its successes in industrializing the country (making it capable of
mobilizing in a war effort to defeat Nazi Germany), the model failed
to generate sufficient technical innovation and intensive growth to
deliver differentiated consumer goods of the kind available within
advanced capitalist economies. Furthermore, it trampled upon civil and
political liberties that many socialists would themselves hold
dear.



Responding to such widespread disempowerment, a second model for
socialist planning has recommended that planning be done in a
different, more democratic way. Thus, the *participatory planning
(or participatory economy, "Parecon")* model proposes
the following institutional features (Albert 2003, 2016
 [OIR]).
 First, the means of production would be socially owned. Second,
production would take place in firms controlled by workers (thus
fostering democracy within the workplace). Third, balanced "job
complexes" are put in place in which workers can both engage in
intellectual and manual labor (thus fostering and generalizing
self-realization). Fourth, in a solidaristic fashion, remuneration of
workers would track their effort, sacrifice, and special needs (and
not their relative power or output--which would likely reflect
differences in native abilities for which they are not morally
responsible). Finally, and crucially, economic coordination would be
based on comprehensive participatory planning. This would involve a
complex system of nested worker councils, consumer councils, and an
Iteration Facilitation Board. Various rounds of deliberation within,
and between, worker and consumer councils, facilitated by this board,
would be undertaken until matches between supply and demands schedules
are found--with recourse to voting procedures only when no full
agreement exists but several promising arrangements arise. This would
turn the economy into an arena of deliberative democracy.



This proposal seems to cater for the full palette of socialist values
stated in
 section 4.1.
 Importantly, it overcomes the deficits regarding freedom displayed by
central planning. Critics have warned, however, that Parecon faces
serious feasibility obstacles. In particular, the iterative planning
constituting the fifth institutional dimension of the Parecon proposal
would require immense information complexity (Wright 2010:
260-5). It is unlikely that participants in the operations of
this board, even with the help of sophisticated computers, would
manage it sufficiently well to generate a production plan that
satisfactorily caters to the diversity of individuals' needs. A
defense of Parecon would retort that beyond initial stages, the
process of economic decision-making would not be too cumbersome.
Furthermore, it might turn out to involve no more paperwork and time
devoted to planning and to assessment behind computer terminals than
is found in existing capitalist societies (with their myriad
individual and corporate budgeting exercises, and their various
accounting and legal epicycles). And, in any case, even if it is more
cumbersome and less efficient in terms of productivity, Parecon might
still be preferable overall as an economic system, given its superior
performance regarding the values of freedom, equality,
self-realization, solidarity, and democracy (Arnold n.d.
 [OIR]:
 sect. 8.b).


### 4.2 Market Socialism



Some of the above-mentioned problems of central planning, regarding
inefficiency and concentration of power, have motivated some
socialists to explore alternative economic systems in which markets
are given a central role. Markets generate problems of their own
(especially when they involve monopolies, negative externalities, and
asymmetric information). But if regulations are introduced to counter
these "market failures", markets can be the best feasible
mechanism for generating matches between demand and supply in large,
complex societies (as higher prices signal high demand, with supply
rushing to cover it, while lower prices signal low demand, leading
supply to concentrate on other products). *Market socialism*
affirms the traditional socialist desideratum of preventing a division
of society between a class of capitalists who do not need to work to
make a living and a class of laborers having to work for them, but it
retains from capitalism the utilization of markets to guide
production. There has been a lively debate on this approach, with
several specific systems being proposed.



One version is the *economic democracy* model (Schweickart 2002
[2011], 2015
 [OIR]).
 It has three basic features. First, production is undertaken in firms
managed by workers. Worker self-managed enterprises would gain
temporary control of some means of production (which would be leased
out by the state). Workers determine what gets produced and how it is
produced, and determine compensation schemes. Second, there is a
market for goods and services. The profit motive persists and some
inequalities within and between firms are possible, but likely much
smaller than in capitalism (as there would be no separate capitalist
class, and workers will not democratically select income schemes that
involve significant inequality within their firms). Finally,
investment flows are socially controlled through democratically
accountable public investment banks, which determine funding for
enterprises on the basis of socially relevant criteria. The revenues
for these banks come from a capital assets tax. This system would
(through its second feature) mobilize the efficiency of markets while
also (through its other features) attending to socialist ideals of
self-determination, self-realization, and equal opportunity. To
address some potential difficulties, the model has been extended to
include further features, such as a commitment of the government as an
employer of last resort, the creation of socialist savings and loans
associations, the accommodation of an entrepreneurial-capitalist
sector for particularly innovative small firms, and some forms of
protectionism regarding foreign trade.



Self-management market socialism has been defended as feasible by
pointing at the experience of cooperatives (such as the
Mondragon Corporation in the Basque Country in Spain, which has
(as of 2015) over 70,000 worker-owners participating in a network of
cooperative businesses). But it has also been criticized on five
counts (Corneo 2017: ch. 6). First, it would generate unfair
distributions, as workers doing the same work in different enterprises
would end up with unequal income if the enterprises are not equally
successful in the market. Second, workers would face high levels of
financial risk, as their resources would be concentrated in their firm
rather than spread more widely. Third, it could generate inefficient
responses to market prices, as self-managed enterprises reduce hiring
if prices for their products are high--so that members keep more
of the profit--and hire more if the prices are low--to cover
for fixed costs of production. Given the previous point, the system
could also generate high unemployment. Having the government require
firms to hire more would lead to lower productivity. However, the
further features in the model discussed above might address this
problem by allowing for small private enterprises to be formed, and by
having in the background the government play a role as an employer of
last resort (although this might also limit overall productivity).
Finally, although some of the problems of efficiency could be handled
through the banks controlling investment, it is not clear that the
enormous power of such banks could be made sufficiently accountable to
a democratic process so as to avoid the potential problem of
cooptation by elites. (See, however, Malleson 2014 on democratic
control of investment.)



Another market socialist model, proposed by Carens (1981, 2003), does
not impose worker self-management. The *Carensian model*
mirrors the current capitalist system in most respects while
introducing two key innovative features. First, there would be direct
governmental provision regarding certain individually differentiated
needs (via a public health care system, for example). Second, to
access other consumption goods, everyone working full time would get
the same post tax income. Pre-tax salaries would vary, signaling
levels of demand in the market. People would choose jobs not only on
the basis of their self-regarding preferences, but also out of a sense
of social duty to use their capacities to support others in society.
Thus, honoring the *Abilities / Needs Principle*, they would
apply for jobs (within their competencies) in which the pre-tax income
is relatively high. If it worked, this model would recruit the
efficiency of markets, but it would not involve the selfish motives
and inegalitarian outcomes typically linked to them in capitalism.



One worry about the Carensian model is that it might be unrealistic to
expect an economic system to work well when it relies so heavily on a
sense of duty to motivate people to make cooperative contributions.
This worry could be assuaged by presenting this model as the long-term
target of a socialist transformation which would progressively develop
a social ethos supporting it (Gilabert 2011, 2017a), by noting
empirical findings about the significant traction of non-egoistic
motives in economic behavior (Bowles and Gintis 2011) and the
feasibility of "moral incentives" (Guevara 1977,
Lizarraga 2011), and by exploring strategies to mobilize
simultaneously various motivational mechanisms to sustain the proposed
scheme. Two other worries are the following (Gilabert 2015). First,
the model makes no explicit provision regarding real opportunities for
work in self-managed firms. To cater more fully for ideals of
self-determination and self-realization, a requirement could be added
that the government promote such opportunities for those willing to
take them. Second, the model is not sufficiently sensitive to
different individual preferences regarding leisure and consumption
(requiring simply that everyone work full time and wind up with the
same consumption and leisure bundles). More flexible schedules could
be introduced so that people who want to consume more could work
longer hours and have higher salaries, while people who want to enjoy
more free time could work fewer hours and have lower salaries.
Considerations of reciprocity and equality could still be honored by
equalizing the incomes of those working the same number of hours.



Many forms of market socialism allow for some hierarchy at the point
of production. These managerial forms are usually defended on grounds
of greater efficiency. But they face the question of how to
incentivize managers to behave in ways that foster innovation and
productivity. One way to do this is to set up a stock market that
would help to measure the performance of the firms they manage and to
push them to make optimal decisions. An example of this approach
(there are others--Corneo 2017: ch. 8) is *coupon market
socialism*. In Roemer's (1994a) version, this economic
system operates with two kinds of money: dollars (euros, pesos, etc.)
and coupons. Dollars are used to purchase commodities for consumption
and production, and coupons are used in a stock market to purchase
shares in corporations. The two kinds of money are not convertible
(with an exception to be outlined below). Each person, when reaching
adulthood, is provided with an equal set of coupons. They can use them
in a state-regulated stock market (directly or through mutual
investment funds) to purchase shares in corporations at market price.
They receive the dividends from their investments in dollars, but they
cannot cash the coupons themselves. When they die, people's
coupons and shares go back to the state for distribution to new
generations--no inherited wealth is allowed--and coupons
cannot be transferred as gifts. Thus, there is no separate class of
capital owners in this economy. But there will be income inequality
resulting from people's different fortunes with their
investments (dividends) as well as from the income they gain in the
jobs they take through the labor market (in managerial and
non-managerial positions). Coupons can however be converted into
dollars by corporations; they can cash their shares to pay for capital
investments. The exchange is regulated by a public central bank.
Further, public banks or public investment funds, operating with
relative independence from the government, would steer enterprises
receiving coupons so that they maximize profit in the competitive
markets for the goods and services they produce (so that they maximize
the returns on the coupons invested). Part of that profit is also
taxed for direct welfare provisions by the state.



This model caters for ideals of equality of opportunity (given equal
distribution of coupons) and democracy (given the elimination of
capitalist dynasties that have the ability to transform massive
economic power into political influence). It also gives people freedom
to choose how to use their resources and includes solidaristic schemes
of public provision to meet needs regarding education and health care.
Via the competitive markets in consumption goods and shares, it also
promises high levels of innovation and productivity. (In some versions
of the model this is enhanced by allowing limited forms of private
ownership of firms to facilitate the input of highly innovative
entrepreneurial individuals--Corneo 2017: 192-7). The model
departs from traditional forms of socialism by not exactly instituting
*social* property in means of production (but rather the equal
dispersal of coupons across individuals in each generation). But
defenders of this model say that socialists should not fetishize any
property scheme; they should instead see such schemes instrumentally
in terms of how well they fare in the implementation of core normative
principles (such as equality of opportunity) (Roemer 1994a:
23-4, 124-5). Critics have worries, however, that the
model does not go far enough in honoring socialist principles. For
example, they have argued that a managerial (by contrast to a
self-management) form of market socialism is deficient in terms of
self-determination and self-realization at the workplace (Satz 1996),
and that the levels of inequalities in income, and the competitive
attitudes in the market that it would generate, violate ideals of
community (G.A. Cohen 2009). In response, a defender of coupon market
socialism can emphasize that the model is meant to be applied in the
short-term, and that further institutional and cultural arrangements
more fully in line with socialist principles can be introduced later
on, as they become more feasible (Roemer 1994a: 25-7, 118). A
worry, however, is that the model may entrench institutional and
cultural configurations which may diminish rather than enhance the
prospects for deeper changes in the future (Brighouse 1996; Gilabert
2011).


### 4.3 Less Comprehensive, Piecemeal Reforms



The models discussed above envision comprehensive "system
change" in which the class division between capitalists and wage
laborers disappears. Socialists have also explored piecemeal reforms
that stop short of that structural change. An important historical
example is the *combination of a market economy and the welfare
state*. In this model, although property in the means of
production remains private, and markets allocate most inputs and
outputs of production, a robust governmental framework is put in place
to limit the power of capitalists over workers and to improve the
life-prospects of the latter. Thus, social insurance addresses the
risks associated with illness, unemployment, disability, and old age.
Tax-funded, state provision of many of those goods that markets
typically fail to deliver for all is introduced (such as high-quality
education, public transportation, and health care). And collective
bargaining gives unions and other instruments of workers' power
some sway on the determination of their working conditions, as well as
providing an important foundation for the political agency of the
working class (O'Neill and White 2018).



This welfare state model was developed with great success during the
three decades after World War II, especially in Northern Europe, but
also, in weaker but significant forms, in other countries (including
some in the Global South). However, since the 1980s, this model has
been in significant retreat, or even in crisis. Wealth and income
inequality have been increasing dramatically during this time (Piketty
2014; O'Neill 2017). The financial sector has become extremely
powerful and able largely to escape governmental regulation as
globalization allows capital to flow across borders. A "race to
the bottom" features states competing with each other to attract
investment by lowering tax rates and other regulations, thus
undermining states' ability to implement welfare policies (see,
e.g., Dietsch 2015, 2018). Some socialists have seen this crisis as a
reason to abandon the welfare state and pursue more comprehensive
changes of the kind discussed above. Others, however, have argued that
the model should be defended given that it has been proven to work
quite well while the alternatives have uncertain prospects.



One example of the approach of extending or retrenching the mixed
economy and welfare state proposes a combination of two moves (Corneo
2017: ch. 10, Epilogue, Appendix). The first move is to revamp the
welfare state by introducing mechanisms of greater accountability of
politicians to citizens (such as regulation of the dealings of
politicians with private companies, and more instances of direct
democracy in order to empower citizens), an improvement of the quality
of public services delivered by the welfare state (introducing
exacting audits and evaluations and fostering the training and
recruitment of excellent civil servants), and international
coordination of tax policies to prevent tax competition and tax
evasion. The second move in this proposal is to run controlled
experiments of market socialism to present it as a credible threat to
the powerful actors seeking to undermine the welfare state. This
threat would help stabilize the welfare state as the menace of
communist revolution did after 1945. Specifically, welfare states
could create new institutions that would be relatively independent
from governments and be run by highly competent and democratically
accountable civil servants. "Sovereign Wealth Funds" would
invest public money in well-functioning enterprises, to yield an equal
"social dividend" for citizens (on Sovereign Wealth Funds,
see also Cummine 2016, O'Neill and White 2019). The second
institution, a "Federal Shareholder", would go further by
using some of these funds to buy 51% of the shares of selected
enterprises and take the lead within their boards of directors or
supervisory boards. The objective would be to show that these
enterprises (which would include significant participation of workers
in their management, and ethical guidelines regarding environmental
impacts and other concerns) maximize profits and thus offer a
desirable and feasible alternative to the standard capitalist
enterprise. Effectively, this strategy would run controlled
experiments of shareholder market socialism. The working population
would learn about the feasibility of market socialism, and capitalist
opponents of welfare entitlements would be disciplined by fear of the
generalization of such experiments to settle again for the welfare
state.



Another strategy is to introduce various experiments seeking to
*expand the impact* of *social power* (as different from
state and economic power) within society (as defined in sect. 1). (See
survey in Wright 2010: chs. 6-7). A set of mechanisms would
target the deepening of democracy. Forms of direct democracy could
foster citizens' deliberative engagement in decision-making, as
exemplified by the introduction of municipal participatory budgeting
in Porto Alegre, Brazil (which features citizens' assemblies
identifying priorities for public policy). The quality of
representative democracy can be enhanced (and its subservience to the
power of capitalists decreased) by introducing egalitarian funding of
electoral campaigns (e.g., by giving citizens a sum of money to
allocate to the parties they favor, while forcing parties to choose
between getting funding from that source and any other
source--such as corporations), and by creating random citizen
assemblies to generate policy options which can then be subject to
society-wide referenda (as in the attempt to change the electoral
system in British Columbia in Canada). Finally, forms of associational
democracy can be introduced that feature deliberation or bargaining
between government, labor, business, and civil society groups when
devising national economic policies or when introducing regional or
local (e.g., environmental) regulations. A second set of mechanisms
would foster social empowerment more directly in the economy. Examples
are the promotion of the social economy sector featuring economic
activity involving self-management and production oriented to use
value (as displayed, e.g., by Wikipedia and child care units in
Quebec), an unconditional basic income strengthening people's
ability to engage in economic activities they find intrinsically
valuable, and the expansion of the cooperative sector. None of these
mechanisms on its own would make a society socialist rather than
capitalist. But if we see societies as complex "ecologies"
rather than as homogeneous "organisms", we can notice that
they are hybrids including diverse institutional logics. An increase
in the incidence of social empowerment may significantly extend the
socialist aspects of a society, and even eventually make them dominant
(a point to which we return in the next section).



A final point worth mentioning as we close our discussion of dimension
DII of socialism concerns the growing interest in addressing not only
the economic arena, but also the political and personal-private ones.
Some scholars argue that classical socialists neglected the increasing
"functional differentiation" of modern society into these
three "spheres", concentrating in an unduly narrow way on
the economic one (Honneth 2015 [2017]). Thus, recent socialist work
has increasingly explored how to extend socialist principles to the
organization of relatively autonomous governmental institutions and
practices and to the shaping of intimate relationships among family
members, friends, and lovers, as well as to the relations between
these diverse social arenas (see also Fraser 2009, 2014; Albert 2017).
There is, of course, also a long-standing tradition of feminist
socialism that has pushed for a wide scope in the application of
socialist ideals and a broader understanding of labor that covers
productive and reproductive activities beyond the formal workplace
(see, e.g., Arruzza 2013, 2016; Dalla Costa and James 1972; Federici
2012; Ehrenreich 1976 [2018]; Gould 1973-4; Rowbotham et al
1979; Rowbotham 1998).


## 5. Socialist Transformation (Dimension DIII)



We turn now to the last dimension of socialism (DIII), which concerns
the transformation of capitalist societies into socialist ones. The
discussion on this dimension is difficult in at least two respects
which call for philosophical exploration (Gilabert 2017a:
113-23, 2015: 216-20). The first issue concerns
feasibility. The question is whether socialist systems are accessible
from where we are now--whether there is a path from here to
there. But what does feasibility mean here? It cannot just mean
logical or physical possibility, as these would rule out very few
social systems. The relevant feasibility parameters seem instead to
involve matters of technical development, economic organization,
political mobilization, and moral culture. (For some discussion on
these parameters see Wright 2010: ch. 8; Chibber 2017.) But such
parameters are comparatively "soft", in that they indicate
probability prospects rather than pose strict limits of possibility,
and can be significantly changed over time. When something is not
feasible to do right now, we could have dynamic duties to make it
feasible to do later by developing our relevant capacities in the
meantime. The feasibility judgments must then be scalar rather than
binary and allow for diachronic variation. These features make them
somewhat murky, and not straightforwardly amenable to the hard-edged
use of impossibility claims to debunk normative requirements (via
contraposition on the principle that ought implies can).



A second difficulty concerns the articulation of all things considered
appropriate strategies that combine feasibility considerations with
the normative desiderata provided by socialist principles. The
question here is: what is the most reasonable path of transformation
to pursue for socialists given their understanding of the principles
animating their political project, viewed against the background of
what seems more or less feasible to achieve at different moments, and
within different historical contexts? Complex judgments have to be
formed about the precise social systems at which it would be right to
aim at different stages of the sequence of transformation, and about
the specific modes of political action to deploy in such processes.
These judgments would combine feasibility and desirability to assess
short-term and long-term goals, their intrinsic costs and benefits,
and the promise of the former to enhance the achievement of the
latter. The difficulty of forming such judgments is compounded by the
uncertainty about the prospects of large societal changes (but also
about the long-term consequences of settling for the status quo).



Marx (1875 [1978b]) himself seemed to address some of these issues in
his short text "The Critique of the Gotha Program" of
1875. Marx here envisioned the process of socialist transformation as
including two phases. The final phase would fully implement the
*Abilities / Needs Principle*. But he did not take that
scenario to be immediately accessible. An intermediate step should be
pursued, in which the economy would be ruled by a *Contribution
Principle* requiring that (after some provisions are put aside to
fulfill basic needs regarding health care, education, and support for
those unable to work) people gain access to consumption goods in
proportion to how much they contribute. This lower phase of socialist
transformation would be reasonable because it would enhance the
prospects of transitioning away from capitalism and of generating the
conditions for the full realization of socialism. The implementation
of the Contribution Principle would fulfill the promise systematically
broken by capitalism that people would benefit according to their
labor input (as in capitalism capitalists get much more, and workers
much less, than they give). It would also incentivize people to
increase production to the level necessary for the introduction of
socialism proper. Once such level of development is in place, the
social ethos could move away from the mantra of the "exchange of
equivalents" and instead adopt a different outlook in which
people produce according to their diverse abilities, and consume
according to their diverse needs. This sequential picture of
transformation features diachronic judgments about changes in
feasibility parameters (such as the expansion of technical capacity
and a change in patterns of motivation). Marx also envisioned
political dimensions of this process, including a "dictatorship
of the proletariat" (which would not, as some popular
interpretations hold, involve violation of civil and political rights,
but a change in the political constitution and majoritarian policies
that secure the elimination of capitalist property rights (Elster
1985: 447-9)). In time, the state (understood as an apparatus of
class rule rather than, more generally, as an administrative device)
would "wither away".



History has not moved smoothly in the direction many socialists
predicted. It has not been obvious that the following steps in the
expected pattern materialized or are likely to do so: capitalism
generating a large, destitute, and homogeneous working class; this
class responding to some of the cyclical crises capitalism is prone to
by creating a coherent and powerful political movement; this movement
gaining control of government and resolutely and successfully
implementing a socialist economic system (G.A. Cohen 2000b: ch.6;
Laclau and Mouffe 1985). Given the fact that this process did not
materialize, and seems unlikely to do so, it turns out that it would
be both self-defeating and irresponsible to fail to address difficult
questions about the relative feasibility and moral desirability of
different strategies of potential socialist transformation. For
example, if the process of transformation involves two or more stages
(be they the two mentioned above, or some sequence going, say, from
the welfare state to shareholder or coupon market socialism and then
to the Carensian model), it might be asked who is to evaluate and
decide upon what is to be done at each stage of the process, on what
grounds can it be expected that earlier stages will enhance the
likelihood of the success of later stages rather than undermine them
(e.g., by enshrining institutions or values that will make it hard to
move further along the path), what transitional costs can be accepted
in earlier stages, and whether the costs expected are outweighed by
the desirability and the increased probability of attaining the later
stages. Such questions do not want for difficulty.



Addressing questions such as these dilemmas of transitional strategy,
socialists have envisaged different approaches to social and political
transformation. Four significant examples (extensively discussed in
Wright 2010: Part III, 2015b, 2016--which we follow here) are
articulated by considering two dimensions of analysis regarding (a)
the primary goal of the strategy (either (i) transcending the
structures of capitalism, or (ii) neutralizing the worst harms of it)
and (b) the primary target of the strategy (either (i) the state and
other institutions at the macro-level of the system, or (ii) the
economic activities of individuals, organizations, and
communities).



The first strategy, *smashing capitalism*, picks out the
combination of possibilities (a.i) and (b.i). A political organization
(e.g., a revolutionary party) takes advantage of some of the crises
generated by capitalism to seize state power, proceeding to use that
power to counter opposition to the revolution and to build a socialist
society. This is the strategy favored by revolutionary socialists and
many Marxists, and pursued in the twentieth century in countries such
as Russia and China. If we look at the historical evidence, we see
that although this strategy succeeded in some cases in transitioning
out of previously existing capitalist or proto-capitalist economic
systems, it failed in terms of building socialism. It led instead to a
form of authoritarian statism. There is debate about the causes of
these failures. Some factors may have been the economically backward
and politically hostile circumstances in which the strategy was
implemented, the leaders' deficits (in terms of their tactics or
motives), and the hierarchical frameworks used to suppress opposition
after the revolution which remained in place for the long-term to
subvert revolutionaries' aims. Large system changes normally
have to face a "transitional trough" after their onset, in
which the material interests of many people are temporarily set back
(Przeworski 1985). A political dilemma arises, in that, if liberal
democratic politics is retained (with a free press, liberty of
association, and multiparty elections) the revolutionaries may be
unseated due to citizens' political response to the
"valley of transition", while if liberal democratic
politics are supplanted, then authoritarian statism may be the
consequence, eradicating the possibility of a socialist outcome to
which it would be worthwhile to seek to transition.



A second strategy, picking out the combination of possibilities (a.ii)
and (b.i), has been *taming capitalism*. It mobilizes the
population (sometimes in sharp political struggles) to elect
governments and implement policies that respond to the worst harms
generated by capitalism, with the aim of neutralizing them. New
policies include social insurance responding to risks faced by the
population (e.g., illness and unemployment), tax funded, state
provision of public goods which markets tend to fail to provide (e.g.,
education, public transportation, research and development, etc.), and
regulation of negative externalities produced in markets (e.g.,
regarding pollution, product and workplace hazards, predatory market
behavior, etc.). The strategy, implemented by social-democratic
parties, worked quite well during the three decades of the
"Golden Age" or *Trente Glorieuses* following World
War II. However, progress was halted and partly rolled back since the
retreat of social democracy and the introduction of neoliberalism in
the 1980s. Possible explanatory factors are the financialization of
capitalism, and the effects of globalization, as discussed above in
 section 4.3.
 There is a debate as to whether capitalism is really tamable--it
may be that the Golden Age was only a historical anomaly, borne out of
a very particular set of political and economic circumstances.



The third strategy, *escaping capitalism*, picks out the
combination of possibilities (a.ii) and (b.ii). Capitalism might be
too strong to destroy. But people could avoid its worst harms by
insulating themselves from its dynamics. They could focus on family
and friendships, become self-subsistence farmers, create intentional
communities, and explore modes of life involving "voluntary
simplicity". However, this strategy seems available mostly to
relatively well-off people who can fund their escape with wealth they
have amassed or received from capitalist activities. The working poor
may not be so lucky.



The final strategy, *eroding capitalism*, picks out the
combination of (a.i) and (b.ii). Economic systems are here seen as
hybrids. People can introduce new, socialist forms of collective
activity (such as worker cooperatives) and progressively expand them,
eventually turning them from marginal to dominant. Recently this kind
of strategy of the erosion of capitalism through institutional
transformation rather than piecemeal changes within existing economic
structures, has been referred to as "the institutional
turn" in leftist political economy (see Guinan and O'Neill 2018). Wright (2015b, 2016) suggests the analogy of a lake ecosystem, with the introduction
of a new species of fish that at first thrives in one location, and
then spreads out, eventually becoming a dominant species.
Historically, the transformation from feudalism to capitalism in some
parts of Europe has come about in this way, with pockets of
commercial, financial, and manufacturing activity taking place in
cities and expanding over time. Some anarchists seem to hold a version
of this strategy today. It offers hope for change even when the state
seems uncongenial, and likely to remain so. But critics find it
far-fetched, as it seems unlikely to go sufficiently far given the
enormous economic and political power of large capitalist corporations
and the tendency of the state to repress serious threats to its rules.
To go further, the power of the state has to be at least partially
recruited. The fourth strategy then, according to Wright, is only
plausible when combined with the second.



As discussed by Wright, this combined strategy would have two elements
(we could see Corneo's proposal discussed in
 section 4.3
 as another version of this approach). First, it would address some
important, problematic junctures to expand state action in ways that
even capitalists would have to accept. And second, the solutions to
the crises introduced by state action would be selected in such a way
that they would enhance long-term prospects for socialist change. One
critical juncture is global warming, and the social and political
problems of the Anthropocene era (Lowy 2005; Purdy 2015; Wark
2016). Responding to its effects would require massive generation of
state-provided public goods, which could remove neoliberal
compunctions about state activism. A second critical juncture concerns
the large levels of long-term unemployment, precariousness, and
marginalization generated by new trends in automation and information
technology. This involves threats to social peace, and insufficient
demand for the products corporations need to sell on the consumption
market. Such threats could be averted by introducing an unconditional
basic income policy (Van Parijs and Vanderborght 2017), or by the
significant expansion of public services, or by some other mechanism
that secures for everybody a minimally dignified economic condition
independent of their position within the labor market. Now, these
state policies could foster the growth of social power and the
prospects for socialist change in the future. Workers would have more
power in the labor market when they came to be less reliant upon it.
They could also be more successful in forming cooperatives. The social
economy sector could flourish under such conditions. People could also
devote more time to political activism. Together, these trends from
below, combined with state activism from above, could expand knowledge
about the workability of egalitarian, democratic, and solidaristic
forms of economic activity, and strengthen the motivation to extend
their scope. Although some critics find this strategy naive
(Riley 2016), proponents think that something like it must be tried if
the aim is democratic socialism rather than authoritarian statism.
(For specific worries about the political feasibility of a robust
universal basic income policy as a precursor to rather than as a
result of socialism, see Gourevitch and Stanczyk 2018).



Other significant issues regarding dimension DIII of socialism are the
identification of appropriate political agents of change and their
prospects of success in the context of contemporary globalization. On
the first point, socialists increasingly explore the significance not
only of workers' movements, but also their intersection with the
efforts of activists focused on overcoming gender- and race-based
oppression (Davis 1981; Albert 2017). Some argue that the primary
addressee of socialist politics should not be any specific class or
movement, but the more inclusive, and politically equal group of
citizens of a democratic community. For example, Honneth (2015 [2017:
ch. IV]), following in part John Dewey and Juergen Habermas, argues
that the primary addressee and agent of change for socialism should be
the citizens assembled in the democratic public sphere. Although
normatively appealing, this proposal may face serious feasibility
difficulties, as existing democratic arenas are intensely contaminated
and disabled by the inequalities socialists criticize and seek to
overcome. The second issue is also relevant here. There is a
traditional question whether socialism is to be pursued in one country
or internationally. The tendency to embrace an internationalist
horizon of political change is characteristic among socialists as they
typically see their ideals of freedom, equality, and solidarity as
having global scope, while they also note that, as a matter of
feasibility, the increasing porousness of borders for capitalist
economic activity make it the case that socialist politics may not go
very far in any country without reshaping the broader international
context. A difficulty here is that despite the existence of
international social movements (including workers' movements,
international NGOs, human rights institutions and associations, and
other actors), institutional agency beyond borders that can seriously
contest capitalist frameworks is not currently very strong. In
addressing these difficulties, action and research on socialist
justice must interact with ongoing work in the related areas of
gender, race, democracy, human rights, and global
 justice.[2]