Thursday, February 25, 2021

Human nature is no barrier to socialism — Louise O'Shea

Advocates of capitalism would argue that this analysis overlooks the role of individual incentive in socio-economic motivation, productivity, innovation, and risk-taking. On the other hand, there are also good arguments for creating socio-economic systems that integrate individual and social, and competition and cooperation. In addition, "human nature" tends to ignore or deny diversity, among individuals, groups, and societies and their cultures.

The former communist countries are now forced to grapple with these issues in arriving at a new development model that integrates seeming opposites. The present capitalist models are unattractive as exemplars owing to the socio-economic dysfunctionality that is associated with them, e.g., inequality, oligarchy, plutonomy, imperialism, and other asymmetries, as well as socializing negative externality.

That said, the post does raise some important questions and makes some good points.

What is the most successful model presently and what are its pros and cons and how could it be improved. The Scandinavian model was held up in this regard but there has been some retrenchment toward the failed neoliberal model.

Red Flag — a publication of Socialist Alternative
Human nature is no barrier to socialism
Louise O'Shea


Peter Pan said...

A mixed economy is a spectrum. Stop thinking in binary terms of socialism vs capitalism.

Ahmed Fares said...

This from the article:

"This explains why trade unions continue to be the largest voluntary organisations in most countries where they are legal: they express a degree of consciousness on the part of workers about the need for solidarity and collective action—not selfishness and pushing others down—to improve their material circumstances."

Unions improve the lot of their workers at the expense of others in society and not at the expense of capitalists as they claim. This from Joan Robinson (note that the term "money-wages" is what we today call "nominal wages") [bold mine]:

Generally speaking, in the orthodox system, it was taken for granted, without much thought, that a rise in money-wage rates, brought about by a bargain between employers and employed, entails a more or less commensurate rise in real-wage rates, and that a rise in real wages causes a decrease in employment. In any one industry the workers obtain a higher real wage when their money wage rises, for even if the product of the industry is consumed by the workers, a rise in its price, following the rise in its wages cost, will make only a small reduction in the purchasing power of money, so that the workers in that industry gain, while the countervailing loss is thinly spread over the rest of the community. Again, in a single country, an all-round rise in money wages, even if it is accompanied by an equivalent rise in home prices, leaves the prices of imported goods unchanged in the first instance, and so leads to some rise in real wages in the home country. The orthodox economists seem to have pushed the inquiry no further than this, and appear never to have posed the question : What happens when there is an all-round rise in money wages in a closed system without international trade?

There is no doubt what their answer ought to have been. On the orthodox assumptions of perfect competition, marginal prime cost is equal to marginal wages cost in a closed system. An equal proportional rise in all money wages must therefore lead to the same proportional rise in the level of prices of a given rate of output. It follows that, unless something happens to alter the rate of output, real wages remain unchanged when money wages rise. But this proposition is not to be found in the orthodox writings. On the contrary, it was always assumed that the money-wage bargain determines the real wage, and it was not until Mr. Keynes challenged this assumption that any discussion of the problem was undertaken at all.
—Joan Robinson (An Essay On Marxian Economics)

This brings up the idea of an aristocracy of labor:

In the United States and Britain, the term "aristocracy of labor" is used as an implicit criticism of labor unions that have organized high-salary workers and have no interest in unionizing middle-income and lower-income employees—even in cases where organizing the unorganized would strengthen the unions involved. These unions, it is argued, are content to remain a "labor aristocracy". Examples might include the unions of professional athletes, which have raised the wages of a certain class of already highly paid workers—professional athletes—but refuse to organize other workers, including other employees of the teams they work for. It commonly charged that the Air Line Pilots Association, International, the Screen Actors Guild and a handful of other AFL–CIO unions conform to the labor aristocracy model of trade unionism.

source: Labor aristocracy

But as Joan Robinson pointed out, if everyone was in a union and had the same wage increases, then real wages would remain unchanged.

Peter Pan said...

Labour struggles in the early 20th century resulted in improved working conditions. Unions of the time obtained concessions that were just as important as wages. That era appears to be over in the advanced economies.