By Richard D Wolff
Friday, 07 June 2013
Capitalism has stopped “delivering the goods” for quite a while now, especially in its older bases (Europe, North America and Japan). Real wage stagnation, deepening wealth and income inequalities, unsustainable debt levels and export of jobs have been prevailing trends in those areas. The global crisis since 2007 only accelerated those trends. In response, more has happened than Keynesianism returning to challenge neoliberalism and critiques returning to challenge uncritical celebrations of capitalism. Capitalism’s development has raised a basic question again: What alternative economic system might be necessary and preferable for societies determined to do better than capitalism? That old mole, socialism, has thus returned for interrogation about its past to draw the lessons about its present and future.
The Historical Background of Socialism
Since the mid 19th century, socialism has mostly been differentiated from capitalism in two basic ways. Instead of capitalism’s private ownership of means of production (land, factories, offices, stores, machinery, etcetera), socialism would transfer that ownership to the state as the administrator for public, social or collective ownership. Instead of capitalism’s distribution of resources and products by means of market exchange, socialism would substitute state central planning to accomplish that distribution. Marxism was generally viewed as the basic theoretical criticism of capitalism that went on to define and justify a social transition from capitalism to socialism. Communism was generally viewed as a distant, rather utopian stage of social development beyond socialism wherein class differences would disappear, the state would wither away as a social institution, work activity would be transformed and distribution would be based purely on need.
Before 1917, socialism comprised both the critical analysis of capitalism and the anti-capitalist programs promoted by various social movements, labor unions, writers and political parties. They advocated transitions from private toward state ownership of means of production, and from market toward state-planned distribution. Socialism was stunningly successful at winning hearts and minds; it spread quickly across the globe. By 1917, a revolution in Russia enabled a new government to replace the capitalism it had inherited with what it understood as socialism. Bolshevik leaders thus moved to nationalize productive property in industry and institute planning as hallmarks of the new Union of Soviet Socialist Republics’ (USSR’s) economy.
Yet Soviet socialism also changed and complicated the meaning of socialism in the world. Beyond being a general theory and program of anti-capitalism, socialism came also to be the label applied to what was said and done in and by the USSR. This change had profound consequences. Socialists around the world split into two wings or segments.  For one wing, the evolving Soviet revolution was the realization of what socialism had always sought. It therefore had to be defended at all costs from capitalism’s assaults. That wing increasingly defined socialism as what the USSR did after 1917; Soviet socialism became the model to be replicated everywhere.
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