The Democratic Socialist Alternative to Capitalism

by James Petras

For over 150 years socialism has been recognized as the principle alternative to capitalism. Facing declining living standards, rising unemployment and underemployment, massive foreclosures of home mortgages, endless wars of oppression and domestic decay, more and more people are raising the demand for an alternative.

More than ever the socio-economic conditions are ripe to bring about a socialist transformation.

The capitalist system is based on a fundamental contradiction: production and distribution of goods and services is based on the social cooperation of millions of workers, engineers, truckers and pilots, retail clerks, health and educational employees and many others. While the economy is based on social cooperation (“socialized”) the owners are private, they take the profits, they hire and fire workers, they locate and relocate plants, and they invest or speculate. Capitalism is the collective production of the many for the profit of a few. Under socialism collective production would be linked to collective ownership and “profits” and their allocation would be based on decisions by the producers for the producers.

The economy cannot function without workers, professional engineers, accountants, secretaries and others. In contrast the private owners of capital- the capitalist- are not necessary for producing or distributing goods and services; they live off what “their” workers and employees produce. When capitalists go on vacation or play golf the economy continues to function “normally”. In contrast if the workers and employees do not show up for work, as is evident when workers call for a “general strike” nothing is produced or distributed. Under socialism, social production and distribution would be under social ownership.

Defenders of capitalism claim the economy is too “complex” to be run by worker controlled planning boards (2) others claim that private ownership “the market” is more efficient than public enterprises, (3) others claim the market leads to greater prosperity and finally some claim public ownership under workers’ control impinges on freedom.

Under today’s giant multi-national conglomerates, spanning the world and employing more workers and earning more than the budgets of many small nations, the corporate elite engages in central planning and complex decision making based on information processed by powerful computers. Complexity or large scale decision making is not a problem for giant private corporations and will not be a problem for worker elected boards of directors.

Efficiency, measured by investments that produce goods and services for the vast majority of workers’ needs, is severely lacking under capitalism as evidenced by the huge amount of capital wasted on speculative activity, the decline in living wages, the 50 million families without health care and the loss of opportunity for secure employment. Under capitalism “efficiency” is measured  simply by rates of profit  regardless of their source or impact on the people which the economy is supposed to serve.

Capitalism measures “prosperity” by profits even when the profits are a result of rising food prices, rents, interest rates, plant closures and relocation of capital from productive to speculative activity and relocation to low wage countries. In other words capitalism prospers by impoverishing workers, renters, consumers, home buyers and small business suppliers to big firms. Prosperity is not inherent in capitalism—-it results from workers struggle, extracting a part of the wealth that workers produce.

Capitalists Look to the Government to Secure Their Welfare

The claim that capitalism and liberty are synonymous is absurd. Capitalists run their businesses with an iron fist.. Capitalist run to the government for bailouts; use  government power of ‘eminent domain’ to expropriate small property owners to expand their real estate empires. In other words capitalists look to the government and state intervention to secure their ‘welfare’.—i.e. profits. Capitalist only call the state intervention tyrannical when it intervenes on behalf of the health and welfare of workers. Today the “market” is based on state intervention for capitalist. Under socialism the state would intervene to reallocate resources to benefit the workers and conserve the environment.

Change Begins With Struggle

The transition from capitalism to socialism would begin with the organization, education, and struggles of the workers. Through immediate, local, regional struggle over reform—public health, labor rights, against social security cut backs and exploitation, powerful movements would emerge which could lead to the creation of a worker-employees’ party independent of the two capitalist parties. Through elections and direct action, political power would become the basis for making an essential change.

We Have No Democracy Today

Under the capitalist system, the concentration of wealth in the hands of the capitalist class undermines democracy and equal opportunity. The ‘price’ of electing a President is now nearly a billion dollars, a Senator at least a hundred million and a Congressman tens of millions. Wealthy owners control the mass media—which are owned by capitalists, who promote their own candidates and bias reporting to promote profit making and exclude any critics of capitalist profiteering. Socialists advocate public investment in public health, education, pensions, Social Security, the environment and the general welfare of the vast majority of working Americans.

Democrat Socialist Alternative to Capitalism

Concentrated wealth and political power leads to rule by the few, oligarchy not democracy.

Capitalism perpetuates and deepens inequalities of opportunity; the children and families of capitalist oligarchs inherit wealth, control the ladders of economic influence and buy the best lawyers to avoid prosecution for swindles, violations of occupational safety, environmental contamination and labor laws. While some individuals may rise from the middle class to the top they are the exception to the rule. The capitalist class decides which individuals rise and which do not, based on their capacity to generate the greatest profits for the capitalist class by lowering the wages and benefits of their fellow workers and professionals.

A Socialist government would sharply reduce inequities basing pay on years of training, skills and application. A Socialist government would increase the ‘social wage’: it would use tax revenues to fund free health and education., guaranteed pensions and provide low interest loans for public and private housing and transport. It would fund leisure parks, six week vacations and make large scale public investments in pollution free energy sources (sun, wind, wave, etc.) and technological innovations to lighten and reduce the work week.

Political accountability would be based on free elections, based in both local economic and geographic units. Elections will take place at the workplace and at the municipal, state and federal level. Candidates would face limits on campaign expenditures and election campaigns would last no more than 6 weeks. Issues would have to be detailed, in the streets and public meetings and the media would have to provide equal time to all candidates who qualify.

Elected legislatures based on representatives of workers, employees, professionals and managers would decide economic priorities and then vote on a general course of action to a joint worker-management committee. Women, minorities, environmentalists and occupational health commissions would analyze the impact of policies in their constituencies and make policy recommendations.

Public ownership of large scale enterprises would co-exist with private ownership of small and medium size factories, stores and offices. Private ownership of homes and transport would co-exist with co-operative and public property. The entire system would be self financed based on the transfer of trillion dollar war budgets to civilian social and productive economy; the trillion dollar speculative funds of Wall Street would be transferred to rebuilding infrastructure, manufacturing, social services and pension funds. Profits would be reinvested in life improvements and upgrading skills and training and economic competitiveness in the world market. Security would be based on community councils and professionally trained police; external threats to the territorial US would be by a professional military subject to democratic control

Our economy possesses enormous wealth and our work force is highly productive: there is no reason why this wealth and skill cannot be converted into a means to enrich the lives of the great majority of American workers and restore the dignity and self respect to the American working class.


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