Transcending capitalism: three different ways? — Branko Milanovic

After the crisis of 2007-8, capitalism has entered among some parts of the public opinion into an ideological crisis. (I have written elsewhere why I think that this is not a general crisis of capitalism but a limited response to the decline of western economic and political power.) However, the question of durability or of non-permanency of capitalism has, unlike in the years after the fall of communism, reentered the public discourse. In many ways, in the West, the situation is returning to the 1970s or earlier when the ideas of alternative socio-economic systems were hotly debated. This is something that had disappeared in the next several decades driven away by neoliberalism in economics, the collapse of Soviet socialism, and the imposition of the pensée unique.

Now, things are changing, and understandably many people bring their own ideas about how capitalism can be “transcended”, that is replaced by a different socio-economic system. I want here to highlight three different ways in which this subject has recently been addressed....

Here is the nut of it.

In a new paper ”What is socialism today: Conceptions of a cooperative economy”, John Roemer starts with three essential pillars of all economic systems: an ethos of economic behavior, an ethic of distributive justice, and a set of property relations. In capitalism the three pillars are (1) individualistic ethos, (2) laissez-faire (no redistribution), and (3) privately owned means of production with profit accruing to capitalists. Until now, Roemer argues, all attempts to transcend capitalism focused on element No. 3, replacing privately owned capital with state or socially (collectively) owned capital. They have all failed.... 

Arguably, social democracy is based on 1) a communal ethos instead of an individualistic or collectivist ethos,  2) social justice based consideration of social value in addition to economic value, and 3) public control of the commanding heights of the society including the economy to organize public purpose in terms of the common good and general welfare instead of maximization of individuals' utility.

Democratic socialism would be based on 1 and 2, and three would include workers' cooperative ownership of the means of production.

Note: Branko Milanovic seemingly uses the term "transcend" as an allusion to Hegel's use of the German term aufheben as the driver of dialectic, both logical and historical.

Global Inequality

Transcending capitalism: three different ways?
Branko Milanovic | Visiting Presidential Professor at City University of New York Graduate Center and senior scholar at the Stone Center on Socio-economic Inequality, senior scholar at the Luxembourg Income Study (LIS), and formerly lead economist in the World Bank's research department and senior associate at Carnegie Endowment for International Peace