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Capitalist Crisis, Socialist Renewal

This much is clear: not in a long time has capitalism been so critically questioned in the US and “socialism” so widely debated as a social alternative.  The left can and should seize this moment.  One part of doing that is to formulate a new program — including a new definition of socialism — that could grasp a mass consciousness, become central to public political debate, and inspire a new left mobilization in the US.

First, we need to settle our accounts with the (definitions and practices of) socialisms of the past.  As Engels did in his Socialism: Utopian and Scientific, we need to state both what past socialisms accomplished and why they could not overcome and replace capitalism.  Despite ruthless and implacable opposition, powerful labor, left, and socialist organizations were built and progressive social changes achieved.  A rich left tradition of socialist criticism and analysis was created and spread globally.  Across the nineteenth and twentieth centuries, the first wave of modern, anti-capitalist socialism became a global social force.  However, where and when socialists made revolutionary breakthroughs against capitalism — whether or not they took state power — socialism’s advances proved limited, vulnerable and therefore often temporary.  The histories of the USSR and China, like those of socialist and communist programs and parties across the rest of the world, attest to distortions and reversals that enabled renewals of capitalism.

There were, of course, many contributors to socialism’s history: those that impinged from outside and those that worked their effects from within.  I am concerned here with the latter.  Following Engel’s model, I explore what has to change inside socialism to improve its chances to achieve new, further, and more secure breakthroughs in moving the human community beyond the injustice, limits, and costs of capitalism.  Let’s begin by subtitling the remainder of this short essay: Socialism: Macro and Micro.

Socialisms of the past focused on two broad social conditions: (1) the ownership of productive property, and (2) the mechanism of distributing productive resources and productive outputs.  Capitalism was thus defined in terms of its reliance upon private ownership of productive property and markets.  By contrast, socialism embraced socialized productive property and national economic planning (usually to be operated by a state apparatus controlled by socialists).  Capitalism and socialism were thus differentiated in macro terms.  What then did socialism mean at the micro level of society inside its individual enterprises?

The blunt answer is: not much.  No clear differentiation of capitalism from socialism has so far emerged for the internal structures of enterprises.  While socialists supported and often led workers’ struggles for better wages and working conditions inside capitalist enterprises, their chief concerns were more macro-oriented.  They sought to coordinate workers’ struggles inside enterprises with developing political movements aimed to transform private into socialized property and markets into planning.  Thus, when and where socialists became politically dominant, the basic internal structures of enterprises were not fundamentally altered.  Laborers still finished their work days and departed, leaving behind their labors’ fruits and leaving to others — boards of directors — the decisions about what to produce, how, and where, and what to do with the surpluses/profits.  True, socialists emphasized state regulation of those boards’ decisions or sometimes replaced private corporate boards of directors with state officials.  However, the basic structures connecting workers to enterprise decision-makers remained, where socialists shaped them, markedly like their counterparts under capitalism.

In  Socialism: Utopian and Scientific, Engels’ key point was that many early socialists believed that powerful utopian visions of a better, post-capitalist society could not only capture people’s imaginations but also thereby realize socialism.  But utopian socialism, Engels argued, had not succeeded.  Socialists therefore had to supplement it with a materialistically grounded (i.e. “scientific”) strategy for practically transforming capitalism into socialism.  Scientific socialism would identify key potential revolutionary agents and mobilize them politically for that transformation.

However, the macro focus of scientific socialism also proved inadequate to secure a transition from capitalism to socialism.  It lacked the supplement of a micro focus, namely a definition of socialism at the level of each enterprise: specifically, that enterprises be reorganized such that the laborers become collectively their own board of directors.  This micro dimension of socialism ends the classic divided organization of capitalist enterprises pitting those (the board of directors) who make the enterprise’s key decisions against those who labor but do not make those decisions.

The full range of new strengths and potentials available to 21st century socialism if it adds this micro dimension cannot be listed here, let alone elaborated.  Consider just two examples.  First, a macro-cum-micro socialism institutionalizes real worker participation in all aspects of production.  Socialism will thereby mean that the workers themselves will be charged to transform the inherited capitalist enterprises by ending their divisions between manual and mental labor, directors and directed.  Building a new socialist society will mean the workers’ continuous role in reorganizing enterprises based on equality, sharing, or rotating all specific functions, and continuous collective decision-making.  Socialism would then engage all workers in a life-long process of self-transformation alongside and intertwined with macro-level socialist transformation.  The end result would equip and motivate workers to participate fully in politics and culture as well as in the economy.

Second, such a macro-cum-micro socialism can bring a concrete, practical meaning to otherwise often vague references to socialist “democracy.”  That kind of democracy would refer to how the collective of workers inside each enterprise reach all its key decisions.  These enterprise collectives would necessarily enter into continuous deliberations and negotiations with one another and with similarly democratic collectives based on residency to reach genuinely democratic social decisions.

Utopian socialism contributed to the socialist tradition’s growth and maturity, but its limits provoked a self-critique formulated around the concept of scientific socialism advocated by Marx and Engels.  Scientific socialism then enhanced the tradition’s further globalization and deepened both its theorizations and its practices.  Nonetheless, scientific socialism has now outgrown its overly macro bias and thereby provoked another self-criticism.  The result is the resolve to add the micro level so that the macro and micro levels will together provide at once the indispensable supports for but also the democratic constraints on one another.  Can such a reconstituted socialist conception and program also fail?  Of course, but that is no argument against taking socialism another important step further just as the earlier socialists did.  Today’s global crisis exposes all of capitalism’s fault lines, but it also offers socialists the chance to renew their project if they can learn and apply the lessons of socialism’s history.

Rick Wolff is a Professor Emeritus at the University of Massachusetts in Amherst and also a Visiting Professor at the Graduate Program in International Affairs of the New School University in New York.   He is the author of New Departures in Marxian Theory (Routledge, 2006) among many other publications.  Be sure to check out Rick Wolff’s new documentary film on the current economic crisis, Capitalism Hits the Fan, at

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