One of America’s leading socialists discusses how a collectively owned economy would be structured, the limits of the welfare state, and what Keynes understood that Marx didn’t

Bhaskar Sunkara, founder of the socialist magazine Jacobin, has released a new book just in time for the 2020 presidential election season called The Socialist Manifesto: The Case for Radical Politics in an Era of Extreme Inequality (Basic Books, 2019). In the book, Sunkara makes the case for why a socialist economy, government, and society is necessary, and what it might look like. He also provides an in-depth historical look at the development of socialist intellectual thought over the past 150 years. Our Economics Editor Aaron Freedman speaks with him about the past, present, and future of socialist economics.

The transcript below has been edited for clarity

Aaron Freedman: You write that it was the firmly anti-Marxist Keynes, rather than socialists, who actually had the greatest success in challenging traditional economic orthodoxy around debt spending and the business cycle. Should socialists today care about resuscitating Keynes? Or should a socialist macroeconomics come from a different tradition?

Bhaskar Sunkara: Well, I think there’s two things. There’s not just Keynes, but also Swedish economists who helped develop their postwar welfare state. I think that Nordic experience is vital, because that’s the actual experience of trying to govern capitalism in the interest of workers, and using a certain macroeconomic tools to do that. So, obviously, I think we should go with the tools that have already worked, and see how they could be modernized, or how they could work in a more competitive, more international economy. But, yeah, don’t try to just say there’s a magical solution out there, that if only socialists had power, we could make it work.

I think a lot of the failures of socialism in the 20th century was just thinking that all the problems are political. That once you have enough political power, you could impact the system in any way you want. We should reject that. So, in other words, it’s not just taking the state and using its power. You also need a large, independent labor movement backing your program. The impact, for example, of big trade union federations that can impose sectoral bargaining and labor militancy is a missing ingredient in a lot of attempts to resuscitate social democracy by pure electoral means.

Take a country like Australia. It never had a very strong welfare state, but it’s still a relatively egalitarian country, compared to the United States at least. And it was sectoral bargaining that really determined that. It’s definitely not everything, but I think we need to start with actual existing social democracy and what worked. And then try to push it to its limits, beyond that. And that’s very important.

Where do you fall on the role of planning vs. markets in a hypothetical democratic socialist economy?

Some of the primary objections to the old socialism, the command economy, were incentive issues and calculation issues (how could a central planner determine what everyone in the economy wants and be able to produce it without prices?). I think that both continue to be important questions to address. While some people are making arguments now that with increased computing power we could overcome the calculation problem, as far as I could tell that’s not true. But even if you go beyond that, I think socialists don’t want to talk about the incentive problems involved with the planned economies of the Soviet Union and similar states. There you didn’t have real firm failure, and to me that’s actually a big barrier to weeding out inefficacies that come with a serious social cost.

There’s nothing in socialism that suggests we should prefer a fully planned economy. What we want is a system that satisfies our egalitarian kind of desire, which is, to put it simply, to say that we don’t believe in exploitation, and we want to limit hierarchy as much as possible. We think the wage-labor relation is a form of exploitation. And that we want to guarantee the necessities of life as social rights.

So from that socialist starting point, we have to ask whether markets are compatible with our vision. So I fundamentally come down with the market socialist perspective. Influenced by, among others, David Schweickart’s model in Against Capitalism and later in his pop version of that book, After Capitalism. Essentially what I think is that there should be a sphere for consumer goods that’s just like the sphere now, but it’s owned by worker-controlled firms, and these firms don’t have the same kind of impetus towards massive exponential growth because their rational interest is to maximize revenue per worker, not just total revenue.

So you can have the state own the means of production, but have workers and enterprises essentially renting it from the state. That’s the justification for the capital assets tax mentioned in the book—in which the state would tax all the assets of these firms—and then beyond that, people can have their income taxed as well to fund social programs. But it seems to me that some form of worker controlled firms in the area of consumer goods and whatnot, plus a very enhanced welfare state that decommodifies key sectors of the economy like healthcare and housing and childcare, equals socialism. And obviously from there, there’s going to be adjustments and debates and some people are going to advocate for more private incentives, some people are going to advocate for more planning, more state ownership. Maybe it will go in that more-planning direction when certain technological barriers are overcome. I do actually believe if we enter an age of super abundance, maybe we don’t have to struggle in the same way to maximize efficiency through how we structure these firms.

But I think there is actually value in having certain markets. I think markets could, for example, ration scarce goods like when it comes to carbon footprints, if they’re used in an egalitarian society. Maybe it wouldn’t be cash payments, but you might want to ration people’s ability to fly while still allowing everyone to travel and see the world and so on. So, for example, you might have a carbon budget for flights.

Markets existed before capitalism, and they will exist after. Our problem is not markets—it’s exploitation. It’s dependence on markets. So if you’re in an extremely egalitarian social democracy, and then there’s worker/social ownership, and the welfare state is only enhanced, and if you can reasonably quit your job at any point and not go into destitution, are you market dependent? No.

How would an economy of worker-controlled firms compete with each other? How do you avoid worker-controlled firms also acting in only their workers’ self-interest, at the expense of society as a whole?

Obviously, we want to prevent worker-controlled firms from engaging in environmentally destructive and other types of exploitative behavior. This is the part that’s kind of a modulation of the Schweickart model which is that I tried to work through in the book.

So let’s say if workers owned a firm and paid themselves very little, they might allow ineffective and outdated techniques to continue on or it might just be an aggressive way to accumulate market share. So my view is that there needs to be wage minimums and the state should actually enforce and regulate these firms, even if they are collectively run and they’re run by a democratic operating agreement. It’s like how in your family you might want to discipline your child a certain way, but the state is there to prevent child abuse. And obviously this economy isn’t an authoritarian family—it would be democratic, but it still needs to be bound by some sort of regulations. And we also want to prevent the creation of a layer of managers and others that essentially reproduce some of the inequities that we find morally objectionable in capitalism.

But there is risks in every system. Let’s say, the risk in a market socialist system is how do you prevent people from behaving like collective capitalists, and the risk in a planned system is how do you prevent political power over distribution from being turned into economic power. That’s where you need a free civil society, you need politics to constantly adjust the system. This has to be the starting point for politics not the end point.

How do you think a democratic socialist society should address climate change? Is de-growth—actually lowering economic production—necessary or desirable? Or will that have a real negative impact on most people?

Well, obviously a lot of the issues about climate change now are distributional issues. But there will always be new needs and new desires, and those are not necessarily bad things. If somebody has an idea for a new innovation or a new technique or a new product, don’t we want to bring that to market, isn’t there value in that? We want new innovations to emerge, so I would say that the main issue is our rapid production of carbon specifically. Then beyond that is the fact that the way we regulate the environment hasn’t taken into account the extremities of this growth, but I think there are ways to have carbon neutral, or even carbon negative, growth economies. And in the future we might have other techniques to assist us like geoengineering, that we aren’t quite there with yet.

My view is that in a more democratic world, people will be able to make decisions that better reflect both their interests and those of the wider society in which their immersed. Whereas right now, I imagine everyone in ExxonMobil who’s an intelligent person, the vast majority of them, know that climate change is real, and it’s going to have devastating consequences, but obviously they’re not going to regulate themselves especially because their competitors are not going to regulate themselves. A bigger rule for the state seems to be the key.

I know there’s nuanced takes on it, but the idea of de-growth scares me, and much of the world would be scared by the idea there’s already too much stuff. I think there’s a very spartan version of socialism, that comes from a critique of consumerism but actually leads to quite authoritarian directions. Because it’s not my job to say what’s regular consumption and what’s conspicuous consumption. To some degree I do think, within constraints of a democratic state, that’s your personal decision. We could decide what to ration and what not—there was rationing during World War II!—but I don’t think that’s a very good sell, and I don’t think it would be a very just society if we went down that rabbit hole.

Another tension in the socialist movement right now is jobs for all versus post-work. Or, as it’s often expressed in policy terms, a government jobs guarantee versus a universal basic income or social dividend. Do you think a post-work society is achievable under democratic socialism, or even desirable?

I think it should be on the horizon. I forgot who put it this way, but we want both voice and exit. So voice within the workplace, but also the end of market dependence. And I think that’s compatible with both visions. Most people believe in the dignity of productive labor, that there is actually something to take pride in. People take pride in their jobs—even bad jobs—and I think that’s an important thing to keep in mind as we are constructing a political vision. My father, for example, has been unemployed for a couple of years and now he’s basically in forced retirement. As someone who doesn’t have a humanities graduate degree and isn’t sitting around writing poetry, he’s just kind of bored and depressed at home. And I think that’s how a lot of people would react to unemployment, even in a democratic socialist society.

So my mentality is there is a lot of productive work to go around, if you’re able and willing people should be able to find jobs and contribute to the building of society. And in time, as automation increases, we transition some of that work to more civic participation, the building of a civic society if they’re no longer needed in production.

I think there is actually value in these sorts of things but at the same time I don’t believe in the compulsion of “you need to work to receive this.” I think people deserve to live just by virtue of being alive. I don’t think you need a very strong whip to get people to do stuff. People volunteer. Even the super-rich are often not idle even though they can afford to be, though given the end results of these philanthropic efforts, we’d maybe be better off if they were.

Can we imagine a type of working class philanthropy beyond the fact that workers now are all philanthropists because they are contributing more value than there are taking back? Can we imagine, in the future, some sort of society in which, maybe less people are needed in productive labor, but they’re still marshaling their efforts into civic society and volunteer associations and things like that? Yes, but I think right now, people need more than just a check in the mail. So my overall stance is we need a basic income for people doing care work, and other uncompensated work but, a jobs guarantee is an important transitional demand. I say “transitional” because I do think that it would create certain dynamics that might in the long run be unsustainable for capitalism. So it has to be a part of a transition to a different sort of society.

So now looking back to history, how do socialists escape the dynamic that plagued postwar social democracy, which could not survive the assault of neoliberalism in the 1970’s and 1980’s? Why is social democracy unsustainable, and how can democratic socialism avoid its fate?

Fundamentally, postwar social democracy rested on a class compromise. For both workers and capitalists it kind of worked well, with workers getting welfare state benefits and increased bargaining power and capitalists getting stable conditions for accumulation. In fact Sweden, because of the way the sectoral bargaining worked, were able to create a highly efficient economy. Firms that were the most efficient were able to accumulate excess profits to expand and so on and employers got more industrial peace than they did in let’s say France, or these other countries with measlier social guarantees.

Now, the welfare state compromise was actually broken from the left before it was broken from the right so you start to get, by the late 60’s, demands for industrial democracy. So the Leninist idea that workers are bought off by the welfare state is not only incorrect, it’s quite the opposite: workers are emboldened by being more secure and start to make even deeper demands. Capitalists can maybe accommodate some of these demands when times are good, but when they see their inroads in their profitability, then they are going to demand flexibility to solve that problem, or the perception of a problem. I’m not saying the 70s crisis was necessarily a wage squeeze crisis, but capitalists knew that they had a problem or potential problem, and even though they weren’t exactly sure how to restructure the economy to solve it, they knew they were going to need less regulation and weaker unions in order to have the flexibility to restore profitability.

That’s neoliberalism. It isn’t an idea, conjured up by the Chicago School or whatever, it’s capitalists responding naturally to their dilemmas and trying to be more competitive. The socialist view is that we believe that social democracy as far as we know is unstable, and understand it cannot be maintained in the long term. The crisis can be resolved in either a left wing direction—through great socialization, taking away the power of capital to withhold investment—which hasn’t been tested yet, or it’s going to be resolved the way it was resolved in the past.