The Twilight of Globalization - by Boris Kagarlitsky

I found The Twilight of Globalization - Property, State and Capitalism by Boris Kagarlitsky (Plutopress, 2000) extremely inspiring and useful for our discussion on the state. Boris Kagarlitsky, a Russian Marxist theoretician and sociologist, was a political prisoner under Brezhnev and latterly an adviser of the Chair of the Federation of Independent Trade Unions in Russia. He is now coordinator of the Transnational Institute Global Crisis Project and Director of the Institution of Globalization and Social Movements (IGSO) in Moscow.

Although The Twilight of Globalization was written 11 years ago, long before the financial crash, the analysis is still fresh and valid. Kagarlitsky argues that the socialist movement needs to develop a program for the transformation of the state, and formulate an agenda based on the notions of citizenship and human rights and its own new vision of a democratic and decentralised state.

Here’s an extended synthesis of this important book.    

In his preface, Kagarlitsky argues that the crisis of the left is by a lack of ideological vision. To overcome this crisis we need de-revise Marxism and revitalise its theoretical tradition basing our policies on class interests, although these have to be redefined on the basis of the new social contradictions. Kagarlitsky makes the case that the popular argument about the ‘impotence of the state’ in a globalized economy is not only wrong, but also deeply dishonest because it hides the use of state institutions by the organizations of financial capital and multinational corporations: “It is precisely the strength of these capitalist institutions that forces us to put even greater emphasis on strengthening the nation-state as a countervailing force and the basis of any democratic participation”.

With the triumph of neo-liberalism the state was dramatically weakened, says Kagarlitsky in his introduction. Neo-liberalism turned international institutions like the IMF, the World Bank, the WTO that were established to provide some degree of public control over the international market into instruments of deregulation. “These institutions operate in the same way as the Soviet Politburo under Brezhnev,” claims Kagarlitsky. “IMF and World Bank experts decide what to do with the coal industry in Russia, how to reorganize the companies in South Korea or how to manage the finances of Mexico. The greater the scale of the problems, the more simplistic and primitive are the proposed answers” and “(This) new Big Brother is global or multinational, but even more faceless and even less accountable than before”. In addition, global capitalism is wasteful because it is both market-dominated and over-centralized.

Sociologically and economically there is not such a thing as a global capitalist class, claims Kagarlitsky, “but there is an integrated global capitalist network, whose movements and variable logic ultimately determine economies and influence societies. Thus, above a diversity of human-flesh capitalists and capitalist groups there is a faceless collective capitalist, made up of financial flows operated by electronic networks.” This description looks surprisingly like the old Big Brother-type faceless bureaucracy. In such circumstances, the left has to defend national societies against the global elites and against the national state, which is transformed into their tool.

In the first chapter, The State and Globalization, Kagarlitsky explains that Marx and Engels spoke of state institutions as a system of organized and legalized class coercion. Lenin not only saw in the question of power the main question of any revolution, but also reduced it to the seizure and subsequent transformation of the ‘state machine’. By the 1970s, however, it had become obvious that the state no longer enjoyed a monopoly on power. “Too few leftists have posed the question of using the state as a bridgehead in the struggle of real power. Without this, any discussion on reforms loses its meaning,” claims Kagarlitsky. He points out that the main weakness of socialists has always been their underestimation of the need for links between socio-economic and political reforms. “The new problems of society require a qualitatively transformation of the state system” he argues.

“The state system, as an instrument of the ruling class, cannot fail to take account of the interests of other social layers as well,” Kagarlitsky explains. “If kings and lords constitute a link with the pre-capitalist past, the welfare state provides a link with the future. Neo-liberal reaction is aimed at breaking this link. (…) The representatives of the social sphere – those working in public services, science, education, etc. – do not like the state, but their situation becomes still worse when state institutions are weakened. Intellectuals cannot stand bureaucrats, but they constantly appeal to them for help. Without the state the secular intelligentsia cannot exist.”

And he goes on: “The contradiction between the theoretical need for the renewal of the state and the practical bankruptcy of the state in its present-day form spills over into the impotence of the political strategy of the left, the confused declarations of ideologues and the bewilderment of activists. A theoretical argument, which is frequently invoked to justify inaction, holds that the national state, as a central element in the strategy of leftists (whether Marxists or social democrats), is now losing its significance. The weakening of the role of the national state in the context of the ‘global market’ is an incontestable fact. But it is equally indisputable that, despite this weakening, the state remains a critically important factor in political and economic development. It is no accident that transnational corporations constantly make use of the national state as an instrument of their policies.”

Leftists need their own international economic strategy and have to act in a coordinated way on a regional scale. But the instrument and starting point of this new cooperation can only be a national state explains Kagarlitsky, who considers theories on ‘stateless socialism’ completely absurd.

The logic of Globalization

The image of the state as a demoralized bureaucratic machine, unable to carry out effective management and merely swallowing the money of taxpayers, is also held by many on the left. “But the problem of the state becomes insoluble for leftists from the moment they reject the idea of the radical transformation of the structures of power (…) The democratization of power and the participation of the masses in decision-making cannot in themselves guarantee that social reforms will be successful. But if leftists, on coming to power, do not begin promptly to democratize the institutions of the state, this can only end in the degeneration and ignominious collapse of the left government”.

The widespread thesis of the ‘impotence of the state’ amongst leftists has acquired three bases: governments are seen as powerless in relation to transnational corporations, to international financial institutions and to interstate formations such as the EU. But globalization is nothing new; capitalism was born and grew to maturity as a world system. Only towards the end of the eighteenth century national capitalism, rooted in the social structures of particular Western countries, began to develop. “This national capitalism, like modern nations themselves, was not a precondition for but a product of the development of capitalism as a world system,” argues Kagarlitsky. “At the end of the twentieth century, capitalism is again becoming directly global. This does not put an end to national societies or states, although these, as in the epoch of early capitalism, are in profound crisis”. The newest period of globalization is not the ‘ultimate’ phase of capitalism but rather a product of state policies linked to international economic institutions. But “the prediction by Marx and Engels in the Communist Manifesto that capitalism would overcome all state and national boundaries has been realized in full measure only 150 years later”, claims Kagarlitsky.

The ‘Impotence of the State’

According to Kagarlitsky, the thesis of the ‘impotence of the state’ is a self-fulfilling prophecy. “A state that acts strictly according to the rules dictated by neo-liberal ideology and the International Monetary Fund does in fact become impotent”. But “Anyone who tries to issue a challenge to the existing order discovers that the state remains quite strong enough to take up the struggle”. International financial institutions have acquired enormous influence, but they cannot pursue their policies except through the agency of the state. “For the left”, Kagarlitsky explains, “the whole point of conquering power is to change the rules of the game, and at the same time to destroy the present complex of relations between national governments and international financial and political institutions. For many of these institutions, hostility and massive non-compliance on the part of national governments would be a real catastrophe, especially if the dissatisfied states tried to set up their own parallel international structures or to transform the existing ones. It is precisely because many radical alternatives lie directly on the surface, ready to be picked up, that banishing any thought of the possibility of new approaches on the national and international levels is a matter of life and death for neo-liberal ideology.”

This last and also the following quotes are very useful in determining our position towards international and inter-state institutions: “The strength of the International Monetary Fund and other international financial institutions consists above all in the fact that they coordinate their actions on an international scale, while their opponents are isolated. Consequently, the answer to financial blackmail should not be to renounce reform, but to search for allies in the international area, combining this with a clear policy of change and with reliance on the mass movement within the country.”

Inter-state agents can become agents of regulation and the public sector can receive a new impulse for its development on the inter-state level. But “international structures created within the context of a neo-liberal project cannot simply be improved and reformed. The road to a new type of integration lies through an acute crisis and, possibly, through the dismantling of these structures”.

“An understanding of the fact that integration is essential cannot reconcile serious leftists either to the European Union and the Maastricht Treaty or to the Commonwealth of Independent States. On the contrary, it is necessary to wage an irreconcilable struggle against the present international order in the name of the principles of democratic integration. The decisive role in this struggle will be played by processes occurring within the framework of the ‘old’ national states”. And “Ultimately, all international institutions represent continuations of national states, rest upon them and are powerless to act without them. This applies to the European Union, to the United Nations Organization, to NATO, and even to the International Monetary Fund and the World Bank, which at times are perceived as independent global entities.”

The Weakness of Globalized Capitalism

Without the participation of the national state, transnational capital could not keep its indispensable markets open and its boarders closed; nor could it manipulate the price of labour power and raw materials. Capitalism is impossible without laws, and laws do not exist outside states. “During the 1980s and 1990s the scale of state intervention in economic, social and cultural life has not diminished, but on the contrary has grown,” argues Kagarlitsky. “Practice shows that keeping markets open demands no less activity from governments than protectionism”. Moreover, almost nowhere has neo-liberalism led to a sharp reduction in the size of the government apparatus. In Russia, the public sector was cut to a tenth of its former size, but the state apparatus increased approximately three-fold! In many other countries cuts in spending on social needs were accompanied by increases in spending on the repressive apparatus, the privatization of the public sector dramatically increases the load on the taxation service, and so forth.

The priorities of the state were revised under the pressure from he liberals, but they can also be altered under the pressure of the workers. According to Kagarlitsky, “The ‘impotence of the state’ is a propaganda myth. But in order for the state to be able once again to carry out its regulatory function in the interests of workers, it must itself be radically transformed and in a certain sense globalized (through democratically organized inter-state associations). Left organizations, struggling under changed conditions, no longer need only mutual solidarity but also direct coordination of their actions, making it possible to campaign effectively on the international level.”  

Neo-liberal Hegemony vs. Democracy

Kagarlitsky makes an important point that helps us understand the new nationalist movements better: “The economy can be global, although the significance and potential of national economies should not be underestimated. But society remains restricted by the frameworks provided by countries, just as the possibility of society making an impact on political and economic decisions is limited by the framework of the national state. Therefore the desire of peoples to retain the symbols and institutions of ‘their own’ states is due not only to traditionalism, nationalism or ‘sentimentality’, but to an instinctive understanding that if these symbols and institutions are lost, the final possibility for these peoples of influencing their own fate will be lost as well. Transnational bureaucracies are also state structures, and have quite obvious national roots. But they are not democratic institutions.”

And according to Jan Otto Anresson “Today – despite the internationalization of the economies – the nation-states are still supposed to be that community through witch people primarily identify themselves and through which they are able to make common decisions. The hollowing out of the nation-states thus implies a weakening of the possibilities to realize democratic communities”.

Finally, “There are no democratic institutions on the global level. Capital is being globalized, but not people. However cosmopolitan our culture might be, the overwhelming majority of people remain physically restricted by heir conditions of daily life, bound to some particular place. There is nothing intrinsically evil in this. National society and the state will remain the level on which social change is really possible and necessary. It is quite another matter that under the conditions of globalization not only revolution but also reform cannot be successful unless it spreads to a whole number of countries.”  

On a political level, the globalization of the economy has rendered the social democratic compromise pointless. “Enterprises work for the world market, but society remains national. The growth of wages does not guarantee demand for one’s own goods. The old social contract is collapsing, since it is impossible to ensure either general social discipline on the side of capital, or consumer discipline on the side of workers, who have developed the habit of spending their high wages on goods produced by the half-starved toilers in South Asian sweatshops.”

According to the theoretician of the German ‘greens’, Elmar Altveter, instead of complaining about the internationalization of capital, the left would do better to struggle for ‘social regulation yielding global results’ because regulation is impossible on the basis of the old state methods. So it has to rest on ‘global civil society’ that unfortunately only exists in the imagination of theoreticians. The so-called ‘free associations-‘ particularly on a world level are just as utopian as elitist. “Regulation really does need to become regional and global,” argues Kagarlitsky. “However, this cannot be on the basis of ‘civil society’, but must be on the basis of democracy and civil equality of rights, something which is impossible outside the state.”

The state needs to be used by the left, but also changed: “So long as workers, with the help of the state, do not succeed in changing the rules of the game, imposing countervailing limitations on capital, there cannot be any kind of balance, and consequently even the most moderate reformism is impossible. The weakness of the left arises from its unwillingness to use the force of the state against the bourgeoisie. The growth in influence of transnational structures requires the creation of a counter-weight. But at the same time the new situation demands the radical transformation of the state, of its institutions and of its social nature.”

“The general thesis of the ‘impotence of the state’ deliberately ignores the fact that there are very different states in the world – Belgium and the US, Hungary and Russia, Brazil and Costa Rica, China and Brunei.” And “In most cases the supposed ‘impotence of the state before the market’ is in fact a manifestation of the impotence or weakness of some states in the face of others, whose governments have taken on themselves the role of high priests and interpreters of the ‘logic of the market’. This is shown to perfection by the discussions surrounding the common European currency. (…) The conservative government of Germany literally compelled its partners to agree to limit their budget deficits to 3 percent as an essential condition for the introduction of a common monetary unit. (…) Any such criterion, like the planning targets of the Soviet area, is a product of formal bureaucratic thinking that has nothing at all in common with he ‘logic of the market’.

“The more the powers of the state are transferred to specialized private structures and independent (although formally state or inters-state) financial institutions, the more the sphere of democracy is narrowed. Involvement by the population in making decisions is reduced to a minimum, and once a choice has been made it becomes ‘irreversible’

Citizenship in decline

After the fall of the Berlin Wall from constituting an association of free citizens, democracy is being transformed into an oligarchy, a form of interaction of elites that are interested in democracy only as a means for legitimizing their power. Elections, free discussion and the struggle between parties are turning into a ‘democratic façade’. The result is that “The new democracies are afflicted by the same ailments as the old. Corruption is eating away at their political institutions. Disillusionment with democratic institutions, with elections and parliamentarism, is on the rise, even in countries that have long traditions of the struggle for freedom.”  

“Classical capitalism, was characterized by a positive dynamic; civil rights were won by workers, by new immigrants, by women, and by the inhabitants of colonies and overseas departments. The principle of universality triumphed. But in present-day capitalism a countervailing tendency is starting to triumph for the first time. Citizenship is increasingly becoming a privilege, as in a slave-owning society or a feudal republic”.

“Modern society needs changes no less far-reaching than during the era of the great European revolutions of the seventeenth to the nineteenth centuries. What are required are not only social revolution, but also a fundamental change in perceptions of the state and society. Because of the complexity of modern society, radical approaches are rejected as unrealistic, but this complexity is itself among the causes of the present-day crisis. Increasing complexity is a sign that a civilization is in a Spenglerian impasse.”  However,  “Complexity is not necessarily a virtue. The task of social revolution is precisely to carry out a radical simplification. The false choice imposed by the liberals of ‘more state or less state’ has to be rejected. What is now required is neither a reduction nor a broadening of state participation, but its radical transformation, a different state.” (my emphasis)

Towards the New State

“In other words, the strategy of the left has to consist not of defending the old state, but of using the crisis of this state to ensure that the basis for new institutions is laid both on a national and also on an international, inter-state level. What’s required here is an all-permeating democratization that encompasses not only the structures of political power, but also the institutions of social security; self-government; the public sector; and last but not least, the mutual connections between these various structures and institutions.”

If the left does not take up this task, the radical right will step in: “It is necessary to overstep the bounds of the traditional institutions of formal democracy not because we can in theory create something better, but because these institutions in their earlier form no longer work in any case. If the left does not take on itself the task of radically reforming the state, then this goal will sooner or later be urged by the radical right. If democracy does not affirm itself as an extra-market and to a significant degree anti-market system, the masses will follow those who call for restricting the elemental forces of the market in the name of authority, hierarchy, the nation and discipline”.

Is Nationalization Dead?

From the time of Marx, the connection between state property and socialism represented the unshakable basis of left ideology. Kagarlitsky is critical towards the notion of “socialization”: “How does a concept of socialization (various forms of stakeholding capitalism and workers’ cooperatives) differ from social-democratic regulation?” and “It remains incomprehensible why the forms that became consolidated as a result of social conflict should be those of indirect socialization, rather than the most barbaric forms of private, or for that matter, state property. It is also quite unclear how these deliberately less radical approaches (…) would lead to more radical changes, which could not be achieved through nationalization”.

“Talk of the efficiency of the nationalized sector (…) makes no sense in isolation from the question of the social nature and structure of the state. ‘The conservative state guaranteed the ultimate failure of public ownership. In other words, the failure of earlier nationalizations was due not to the ‘inefficiency of state management in general’, but to the vices of particular state institutions, vices which also made their effects felt in other areas of life, including those in which private property predominated.” But “The main shortcoming of ‘soft’ socialization is that it never happens” and ”Any serious attempt to put a moderate programme into effect will engender the need for more radical measures, including the broadening of the state sector”.

Self-management alternative

Criticizing the Mondragon model, Kagarlitsky argues “On the overall social level it makes no difference whether a productive facility belongs to one person or to a group of people, if it does not belong to the community as a whole.” And “In essence, the transition from state to collective-labour property has served merely as a cover for the seizure of management and by private financial groups of control over enterprises, as well as for managerial irresponsibility and for intensified exploitation of the workforce.”

Perhaps even more importantly: “Not only does the transformation of workers into owners fail to overturn the logic of capitalist exploitation; on the contrary, it extends it to its very limit, transforming the ‘external’ contradiction between labour and capital into an ‘internal’ one, replacing the discipline of hired labour with the far harsher principle of self-exploitation. In the Mondragon cooperatives the worker-owners are forced to limit their own incomes in the name of accumulation. (…) The conclusion is irresistible that for a particular person a cooperative enterprise, subject to the same logic of the accumulation of capital, may turn out to be a much harsher exploiter than a private capitalist or a state company.”

“The transition from individual to collective entrepreneurship basically changes nothing; in both cases we are simply dealing with corporations. The key idea of socialists has always been to put capital under the control of society. Of society, and not simply of the producers. In its pure form productive democracy is just as elitist and anti-humane as any other ‘democracy of the elect’. Moreover, it is anti-environmental and anti-intellectual”.

“Ultimately, having an orientation to collective property does not spare us from having to make a choice between capitalism and socialism. If we choose capitalism, then the exploitation of a particular worker within an enterprise is replaced by the exploitation of the whole collective ‘from outside’. Hired labour has been done away with, but hat is so much worse for the workers, since it has been replaced by a feudal type of exploitation in which the workers use their own means of production, but are unable to dispose of their surplus product. This is a step backward with democratic capitalism, whose most important conquests have been free hired labour and the workers’ solidarity to which it gives rise”.

“The contradiction between labour and capital cannot be resolved on the level of an enterprise or of a group of enterprises. The economic interests of workers cannot be reduced to the interests of the labour collectives. Every worker is at the same time a consumer, who needs health care, education and environmental protection. The needs of workers often contradict one another. Integrating all these interests is possible only on the level of society. For the activity of enterprises to correspond to the real needs of society, producers must always be under control. Either this control is exercised by the ‘invisible hand of the market’, combined with a fully visible financial oligarchy, or the government takes on itself the same function.”

“Nor it is possible to justify collective property with reference to the need for a ‘mixed economy’. In itself, the combining within society of various forms of property, management and labour organization is neither a blessing nor a goal. A ‘mixed economy’ may transform society, transcending the logic of capitalism, or it may represent a backward and undeveloped form of the same capitalism. This depends above all on the nature of the state, and on the role and structure of the public sector.”

 The Mobilization Model

Nationalization is not a method for managing industry but a means of changing the social and economic structure of society. Kagarlitsky: “The centralized mobilizational system proved unsuited for day-to-day administration in the conditions of a developed industrial economy and consumer society. But it does not follow from this that the former successes should be doubted, or that the mechanisms of the mobilizational economy are completely unviable. They can work successfully where there is an objective need for them.”

“The rejection of nationalization signifies in practice the rejection of serious efforts to transform society. Unquestionably, the existence of state property on its own does not yet constitute socialism. It does not automatically ensure either a more just contribution of national income or a more harmonious development. But without a strong state sector, resolving all these problems is impossible in principle”.

“While fully recognizing the limitations of ‘state socialism’, we cannot fail to see the necessity of it. … Unless the state sector acts as the core of the productive system, ‘self-managed enterprises’ will be starved of investment and, ultimately, will be enslaved by financial capital.”

“The only way to break the economic power of large finance capital is through nationalization. Alternative strategies for modernization and restructuring then become possible. Only with the emergence of a state sector is it possible to speak of serious social control over the investment process”.

The myth of the inefficiency of the state sector

“The decentralization of power becomes a reality on the basis of decentralized socialization of property,” says Kagarlitsky. “Private capital is undergoing a rapid centralization and concentration not only on the national but also on the world level. Paradoxically, an association of regions can create more effective counterweights to this than a centralized bureaucratic state. The real rather than imaginary participation of workers in management can also be ensured on this basis. It is also possible on this level to resolve the contradictions between the productive, consumer, environmental, cultural and other interests of particular people”

Many late-twentieth-century writers note that the founders of socialism placed their faith not so much on the elements of socialism that had grown up within the framework of capitalism, but on the constructing of a new society, a task that would begin following victory in the class struggle. Collective property seems more attractive precisely because it arises and develops within capitalist society. However, the same can be said of the state sector. It is only necessary to make a critical study of the available experience, without restricting oneself to statements concerning the failures in the Soviet Union.

A peculiarity of the state sector   is that its future depends on the course of the political struggle and the relationship of class forces in society. For this very reason, however, the state sector is strategically important for any socialist and even democratic project. This struggle does not come to an end with nationalization, but merely takes on a different form.

The experience of China in the 1990s also shows the absurdity of the myth of the ‘inevitable inefficiency’ of state enterprises. “It was the work of the state enterprises that allowed the private and cooperative sector to make extra profits. It was the state sector that paved the way for the development of the social and productive infrastructure. (…) The losses of the state sector in China are in fact a hidden form of subsidy for the private sector. This is why the market reforms without privatization that have been implemented in China have led to a dramatic growth of private business ‘from below’, while the privatization in eastern Europe, and especially in Russia, has been accompanied by an extremely weak development of private entrepreneurship.”

What Can Nationalization Achieve?

“The results of nationalization depend in the first place on the condition of the state, on its structures and on its social character. The effectiveness of nationalization, its ability to resolve social problems and speed development, like the structure of the state sector, the position of the workers within it and the degree of democracy in management, all depend on the relationship of forces in the country.”

Historically, “The success stories include the activity of state firms in Austria and Norway. The state sector played a significant role in the modernization of French industry after the Second World War…. The nationalized banking sector served as one of the foundations of the ‘South Korean economic miracle’ of the 1970s and 1980s, showing the degree to which state property could operate successfully in the financial sphere, considered the holy of holies of capitalism.”

“Speaking of the economic achievements of state enterprises is impossible without mentioning the main success story of the late twentieth century, the Internet. This gigantic information network arise and for a long time existed as an ordinary state enterprise, organized and financed by the US government.”

“The experience of state entrepreneurship in the twentieth century shows that it is most effective when a need has appeared for assimilating new areas, for achieving new organizational and technological breakthroughs, and for creating the infrastructure and potential for further development.”

“Without public property the modern form of capitalism could simply not have developed. Globalization and liberalization became possible thanks to the preceding decades of economic expansion, which rested on the strength of the state economy”.

“The weakness of the state sector has always been its inability to catty forward its development on the basis of its own success. The state finds it easier to innovate than to administer. It finds it easier to create the new than to manage what has been created. This is why the state sector, after ensuring a breakthrough, loses the initiative and yields it to private enterprise. But does this lean that the state is doomed merely to plough the fields, the harvest from which will be gathered by private capital?”

Transforming the State

“It is clear that the model of the state enterprise, like the model of the state, needs to be dramatically altered. This is the essential task of radical reformism, the feature that distinguishes it from dogmatic currents of a communist or a social democratic stripe.”

“The degree of readiness to nationalize strategically important sectors of the economy or monopoly enterprises can be taken as a measure of the seriousness of a reformist government. Both ruling elites and left-wing politicians know very well that even successful nationalization does not mean the destruction of capitalist relations in society. But it does create the possibility that qualitatively new institutions and a new relationship of social forces may appear. Nationalization limits the options for international finance capital. It is precisely the threat of property losses that forces the elites to make serious concessions. In other words, until the question of property is posed, smaller, ‘individual’ problems will not be solved. “

“The environmental crisis demands changes in the approach taken to the use of resources. … Wherever possible, individual consumption has to be replaced by collective consumption. This applies above all to transport, and to heating and utilities (water, gas, electricity). The basis for effectiveness of collective consumption can only be high-quality socialized public services, under public control.”
“Forms and levels of socialization should be differentiated. Various types of production permit and demand different degrees of socialization. If the economy is complex, with a variety of different technological levels, the public sector can also only exist as a complex multi-level system, and not as the homogeneous, monolithic structure which socialists dreamed of in the past.”

New Approach to Property

“New technologies and new methods of organization also require changes in the approach taken to property. … The combining of market criteria with hierarchy is a fundamental principle of management under capitalism. But in present-day conditions this principle fails to work, or prevents firms from establishing between themselves the new ‘competition-cooperation’ relations that are essential if technological potential is to be used to the full. ‘New forms of governance’, based on other approaches and values, are indispensable. We shall not find out from the works of the economists how to make these approaches and values the dominant ones in society.”

“The expanded role of pension funds, like the growth in the number of worker-owned enterprises and the vitality of the often-condemned state firm, prove that the traditional capitalist system of property has been exhausted to the point where it inevitably gives birth, in the course of its development, to various ‘socialist’ experiments. However, these ‘buds of socialism’ will not be able to transform society on their own. Even capitalism, which arose within feudal society, could not get by without massive expropriation of the property of the church and the aristocracy, or without the abolition of the feudal rights which served as the economic prop of the old classes. In just the same way, it is hard to imagine that the new society will manage to arise without violating capitalist concepts of the right of property.”  

Property is above all an expression of social relations. It is another question to what degree formal legal concepts succeed in expressing the essence of these relations. “The task of the left consists of ‘generating new legal relations, new forms of property, new forms of rights and obligations’. In Specht’s view it is necessary to proceed both from the ‘dualism of private and state-owned property’ and from the counterposing of the collective enterprise to the nationalized one”.

“Partnerships between the state (as general partner) and working collectives or members of working collectives can be designed. Such variations can depend on sectors of the economy, on the sources of finance, on the management know-how sometimes to be obtained from an outside party, on contributions of assets to the companies. Issues such as liability for the state-owned enterprises, the role of enterprises in contributing to the general well being would influence the decision as to which property regime is to be applied. Yet the leading principle should be to restrict the choice of form and content of such property rights as little as possible.”

“It is quite obvious that future attempts at mechanically duplicating the Soviet model of centralized planning or of state enterprise are doomed to failure. But it is also obvious that a redistribution of power in the economy and society to the advantage of the majority, experimentation with property rights and radical changes in the position of workers on the job are all impossible without the state. If the sate is deliberately stripped of the right to hold property, there cannot be any guarantees of property for workers, and no legally secure defence of the collective interests of the majority of the members of society. Nor can state regulation have any hope of success.”

“The functions of ownership have to be redistributed, not in favour of the private entrepreneurship that has now outlived its time, but of decentralized managerial structures that ensure the democratic participation of workers in decision-making”.

“Historically, Marxism called for the nationalization of the means of production to the degree that capital was embodied in them. A democratic economy is impossible without the socialization of the process of reproduction of capital – that is, of the process of accumulation and investment.”

Nations and Nationalism

No one has ever managed to provide an exhaustive definition of a nation. According to Stalin, a nation is a stable, historically established community of people, which have arisen on the basis of a common language, territory, and economic and cultural life, and which has a common mentality manifesting itself in the field of culture.

A nation is a historical and political phenomenon.  “Nations, like classes, are not ‘natural’; they are born out of processes of political and economic development which include conscious work by political elites setting out to form their own ‘national’ culture”.

“The creation of national states in Europe coincided with the rise of industrial capitalism and was organically liked to it. The transformation of communities and tribes into peoples, and of peoples into nations, occurred as an integral part of the process of formation of the modern state.” Kagarlitsky agrees with Emmanual Wallerstein claiming that in almost every case statehood preceded nationhood, and not the other way around, despite a widespread myth to the contrary.

“The trouble is that in the process of modernization by no means all peoples have become nations. Meanwhile, states have arisen and collapsed, merged and split. Many peoples have developed within federations, at the same time possessing their statehood and not possessing it. Globalization, initiated by the centres of the world capitalist economy, has been superimposed on the continuing search for national self-identification and state self-organisation in the countries of the periphery and semi-periphery. The incompleteness of this process helps explain the dramatic nature of the conflicts that have arisen in the late twentieth century.”

“It is in the nature of human beings to idealize movements that have achieved success. Bolshevism became a worldwide political model of revolutionary organization for sixty years because Lenin and Trotsky succeeded on 7 November 1917 in taking and holding on to power in Petrograd. National liberation movements have been idealized in the same way. Only later has it become evident that all national movements, even those which on the whole adhered to leftist and democratic positions and have played a progressive role in history, have included reactionary components. Since the 1970s these reactionary tendencies in national movements have begun growing stronger, to a significant degree because of the growth of the general ideological and structural crisis of the left. In addition, the exhaustion of the democratic potential of traditional nationalism in a changed society is becoming more and more obvious.”

“It is obvious that attempts to solve traditional problems under qualitative different social, cultural and technological conditions will have quite different consequences. The national state is not the same in the twentieth century as it was in the period from the seventeenth to the nineteenth centuries. But to create modern forms of statehood without passing through a period of historical ripening is impossible. This means an inevitable repetition of the bloody conflicts in the past, of the injustices, cruelties and authoritarian methods that lie at the basis of any state. It means that the deliberate strengthening in society, even if only for a short time, of obsolete, archaic structures and relationships, the creation of new hierarchies clearly incompatible with the tasks of the modern world, and the implementation of policies which lag behind present-day life by a whole epoch. It is quite probable that the development of various peoples has been retarded and deformed because they have lacked their own states in the past. But the belated formation of a national state no longer compensates for this, just as gluttony in old age cannot make up for malnutrition in childhood. Moreover, he new state reflects all the contradictions and deformities of the earlier national development.”


“Self-determination has been achieved not by peoples but by territories, and not by nations but by elites, by the bureaucratic apparatus. On becoming the new state power, the old bureaucracy tries to legitimize itself through aggressive national rhetoric and symbolic actions aimed at defending ‘national interests’ from the ‘foreign adversary’.”

“Western leftists are inclined to sympathise with ‘small’ peoples and to show no special liking for ‘imperial’ ones. They are ready to speak out against German, French, Russian, Serbian and with certain reservations Croatian nationalism, while expressing sympathy for Ukraine, Bosnian, Catalan and Quebecois nationalism.  Meanwhile, they fail even to notice that ‘small’ nationalism usually becomes a real force when behind its back there looms the state interests of one or another of the ‘large’ ‘imperial’ nations – the very same United States, Russia or Germany. Moreover, the bearers of the ‘national idea’ are most often not the oppressed masses, but the local bureaucracy. “

“With the world economy becoming increasingly globalized, only large state formations are capable of pursuing autonomous financial and economic policies. In such circumstances it is quite obvious that world financial centres such as the International Monetary Fund and the World Bank, along with the ruling strata in the US, have an interest in combining increased economic integration with political disintegration.”

“The ‘national idea’ has its own internal logic of development. It moves rightward, in the direction of fascism, until blood begins t flow, and then will not be sated. Those who want to climb on board this idea will be forced to travel with it.”

“The idea of national statehood is linked closely with violence. A nation which no one threatens does not have an acute need for its own national state. A modern state cannot be reduced to, organized violence. Nevertheless, organized violence is in historical terms the first principle of the formation of states. It plays a huge role in the creation of national self-consciousness. It is not by chance that monuments to military leaders adorn the squares of most European cities, including the most peaceful.

Marx and Engels were absolutely right when they declared that no people can be free while it oppresses other people. But they were talking specifically about oppression; the existence of multi-national states did not in itself strike them as unnatural.

‘National  Question’ or the Problem of Democracy?

Socialist thinkers have advanced three alternatives for solving the national question: federalism, ‘self-determination up to the point of succession’ and cultural-national autonomy.

“Perhaps more strongly than anywhere else, the nationalism of the twentieth century has developed in the middle classes, in the bureaucratic milieu and among representatives of the ‘free professions’ for whom ‘ethnicity’ and a sense of participation in ‘their culture’ have been able to provide guarantees of earnings, career advancement and independence. Hence the anti-bourgeois essence’ of the national struggle in no way provides a guarantee that it will be democratic or leftist.”

According to Kagarlitsky, the weak point of Lenin’s concept of ‘self-determination’ is the stress it places on the administrative-political status of a particular territory: “What is the crucial element here – the people of the land? In principle, self-determination, according to Lenin, cannot be separated from a definite territorial area. For this reason it is not only prone to infringe upon the rights of  minorities inhabiting the same territory, but it also limits the realization of the national rights of that section of the people that lives outside of the territory’s boundaries.”

“The cases in which minorities have been successfully integrated show that the national question is ultimately one of civil and cultural rights. Where these rights are violated, nationalism is transformed from the ideology of narrow ethnic and corporative groups into a mass movement.”

National Liberation and Capitalism
“The approach taken by the left to the national question has traditionally been part of a general anti-capitalist strategy. (…) Once in power, the Bolsheviks were forced to abandon many of their initial theoretical positions and to improvise. (…) After the hopes of revolution in Germany had collapsed, the Russian revolutionaries placed increasing hopes on the colonial peoples. Until 1918 the ‘colonial question’ had not held a particular important place in socialist ideology. Now a rise in anti-colonial nationalism became an essential element in the general strategy for breaking the chain of capitalism ‘at its weakest link’.”

“Also, the anti-colonial movements did not always have the same priorities as the workers’ movements in industrialized countries. This was especially apparent during the years of struggle against fascism, when many representatives of Arab nationalism placed their hopes on Nazi Germany as a potential source of support in their struggle for liberation from Britain.”

“If the anti-colonial movements of the 1920s had often been traditionalist and even reactionary, headed by torpid feudal elites, after the Second World war and the proclaiming of Indian independence the situation changed. In colonial and semi-colonial countries where a native industrial proletariat, a bureaucracy and an educated middle class had arisen, interest in socialism was growing.”

“The situation changed radically in the 1980s. The West seized the initiative and began to use nationalist movements in the struggle against communism. … The situation was even more confused because many slogans of the anti-communist resistance were precisely the same as those of the earlier national liberation movement. … The weaker the democratic and socialist alternative, the more attractive nationalism appeared.”

“Then at last came the year 1989, when the communist system disintegrated and the left movement in Europe suffered an unmistakable moral collapse. Globalization and neo-liberalism meant that the old anti-imperialist and anti-colonial slogans became empty; the hegemony of the ‘centre’ was now being exercised through new methods. But radicals continued mechanically to repeat the old formulas that everyone had grown sick of hearing. (…)


“A part of the Western left tries to sit on two chairs at once, supporting the idea of national statehood for minorities and of a multicultural society. This indicates either the lack of a programme, or the kind of programmatic “flexibility” that allows one to occupy any position depending on the circumstance. “

“How does a ‘prison-house of nationalities’ differ from a multinational state? The difference lies in democracy. What leftists must defend is not the principle of self-determination or that of cultural-ethnic pluralism, but democracy and human rights as such. The only ways of solving the national question that deserve support are those that meet these criteria.”

“To the idea of the ‘national state’, leftists need to counterpose their own concept of multinational and multicultural civil society. The programme of socialists has to be based on the principle of equal civil rights, in contract to the nationalist ideology of ‘vertical solidarity’ of the masses with ‘their’ elites. If left-wing tradition presupposes social solidarity and the ‘horizontal’ unity of workers, nationalism presupposes hierarchy and vertical organisation. Leftists and national-conservatives alike see in the state a means of achieving their economic goals. But their views of the nature and social purpose of the state are diametrically opposed. This is why leftists and nationalists will never be able to unite successfully, even if they voice similar social demands.”

“There is not, and cannot be, a single universal principle making it possible to solve national problems. But there can be a single criterion: respect for democratic rights and freedoms. The positions of the left ion the national question must be assessed from this point of view as well.”

“It is clear that as internationalists, leftists must call for the preservation of multinational and multicultural federations. But it is no less clear that the association must be free and voluntary. Meanwhile, the right of peoples to unite with one another has to be respected no less than their right to independence. “    

“Even if the majority of the people are wrong in demanding independence, socialists cannot support great-power coercion and repression. But this does not in any way signify that leftists must support a positive programme advanced by nationalists. When nationalism is not a form of defence of democratic rights, it is reactionary through and through. A nationalism which calls for limitations on the civil rights of ‘settlers’, which denies them equal rights in the use of their language and so on, is anti-democratic in its very essence. Also thoroughly dubious is the idea of supporting a new nationalism as a form of moral recompense for old wrongs (this is typically of Western leftists who feel a historic guilt for the crimes of their colonial period).”

“It is precisely because of the political weakness of leftists themselves that national demands are becoming a trap for them. If these demands are just, if they are supported by the majority of workers and are rejected by the ruling class, they can become a legitimate part of the socialist programme. But leftists do not understand the degree to which these slogans are their own, and the degree to which they are not. These demands are ultimately realized without the participation of leftists, and often despite their opposition, giving rise to new injustices along the way. In this respect the position of the left is tragic. In any national struggle, it is doomed to defeat. But this defeat cannot be either decisive or final, since in the final reckoning it is not national but social contradictions that decide how society develops. Every ‘victory’ in the national struggle simply turns into fresh dramas, until the national contradictions are overtaken by social development. What is catastrophic for leftists is not their inability to solve the national question, but their attempts to give this question a central place in their programme, or to solve it in isolation on the basis of their own ideology. For socialists, the best solution to the national question is to go beyond its boundaries.

The Third World Labyrinth: Is a Democratic Model Possible?

“For most of humanity, the twentieth century has been a period of modernization. As we approach the century’s end, we can state that all of the projects that have been advanced for global modernization have failed, and that the few instances of success do not change this general picture.”

“Traditional oligarchs, capitalists, technocrats and bureaucrats have proven equally incapable of carrying out successful modernization, or at any rate, of ensuring democratic development.”

“The transformation of the state into a monopoly proprietor and the creation of a statocratic system in Russia and China represented the most radical attempts at imposing a ‘final solution’ to the problems posed by this systematic diversity. (…) The contradictions of real life in these societies meant that the numerous theoreticians who sought refuge in a face-saving formula (‘degenerated workers’ state’, ‘state capitalism’, and so on) merely headed into a dead end. (…) The synthesis was unsuccessful. As the end of the century has neared, the statocratic system everywhere has began disintegrating into its component parts. The crisis of state power has called a new systematic diversity into being, and has returned the societies of Eastern Europe to a state of dependency and backwardness.”

“Marxists in the early twentieth century saw the root of the evil as lying in colonial exploitation. But when the countries of Asia and Africa achieved political independence, the dilemma was not solved, and in many cases the situation became even worse. In the 1970s the main problem was considered to be unequal exchange between industrial and agrarian raw material economies.”

“The only structure able to ensure that the investment cycle and the process of accumulation operate in the interests of peripherical societies is the national state. … The state inevitably subordinates accumulation and investment policy to the solving tasks which are its own and which it finds more natural. This was already grasped by J.M. Keynes.”

“A consistent socialization of the investment process, meanwhile, inevitably leads us outside the logic of capitalism. This is why neo-liberal reaction directs such furious attacks against all forms of state participation in the economy, even when this participation is essential for the stability of the bourgeois system itself.
Despite the failures of state planning, it remains an incontrovertible fact that the lower the level of development, the greater the need for the ‘statization’ of the economy, making possible the implementation of policies aimed deliberately at overcoming backwardness. … Statization of the economy, however, cannot by itself solve the problem. Authoritarian-bureaucratic power structures doom the state sector to inefficiency. The greater the backwardness, the worse the bureaucracy. … That is why the mixed economy remains an attractive but still vacuous slogan. Without structural reforms in the economy, and without the renewal of the system of state power, the mixed economy simply combines the vices of all the ‘models’ that have been tried and found wanting. The statization of the economy, while creating the preconditions for accelerated development, simultaneously places obstacles in the way of progress. In other words, the greater the need for a cure, the less effective the medicine. Socialists, calling for changes in the ‘class character’ of the state, have been unable to resolve this contradiction, since they have retained their faith in the old Enlightenment concepts.”

“Instead of arguing pointlessly about whether we need a ‘big state’ or a ‘small state’, we have to understand that what is necessary is a different state. A radical change in the structures of power is the only alternative to wandering in the labyrinths of authoritarian modernization.”

“The ideology of ‘reform and development’ might perhaps be reborn, but it is still not going to work. … the rise of social democratic ideology in Latin America has merely reflected the crisis of the revolutionary perspective, ‘a mood of disillusionment and anti-utopianism, but in itself this approach ‘lacks historical depth and strategic realism.’ The call to reject ‘utopian goals’ is tantamount to demanding abstention from action itself.”

“It is essential to return to democracy its original sense of people’s power. It is well known that the parliamentary road to change is far from being the most rapid. No less familiar are the catastrophic results of numerous attempts, Jacobin and Bolshevik, to speed up the changes, clearing out of the path the democratic ‘restrictions’ that hindered progress. The history of the Russian soviets in 1917 amounted to an unsuccessful attempt by the masses themselves to resolve this contradiction, creating democratic power of a new type.”

“Lenin and the Bolsheviks made many speeches praising the concept of a workers’ democracy arising spontaneously from below, but this democracy proved incompatible with the Bolshevik concepts of the party and the revolutionary state.
Through recognizing the role of the soviets and resting on the self-organization of the masses, the Bolsheviks were able to take and hold power in the autumn of 1917. But having used the soviets as a springboard to power, the Bolshevik party was unwilling and unable to renounce its own Jacobin politics. Modern-day leftists who have escaped the hypnotic effect exercised by the Jacobin-Bolshevik tradition will, it must be hoped, prove capable of drawing lessons from this experience.
It is obvious that the model of power that was embodied in the multi-party soviets of 1917 was extremely crude. In many respects the advantages of ‘worker’s democracy’ over parliamentarism were simply the fruit of the imagination of radical ideologues. It was the weakness and ineffectiveness of the soviets that led to the downfall of this form of democracy. The soviets lost their real power because they were unable to defend themselves effectively either against the onslaught of counterrevolution under civil war conditions, or against the Jacobinism of the Bolsheviks.
Nevertheless, if we want to break out of the vicious circle of ‘either parliamentarism or authoritarianism’, we have to reject the search for simple solutions.   … Nonetheless, the alternative to parliamentarism lies not in the dissolving of parliaments, but in the combining of parliaments ‘above’ with organs of popular power ‘below’. In other words, what we need is not soviets instead of parliaments, but soviets in addition to parliaments.”

“There is a democratic alternative, but it is not a bourgeois or liberal alternative. In these countries democracy is impossible without a substantial element of socialism. If the public sector plays a decisive role in the economy, if power lies in the hands of workers and their parties, and if self-management is beginning to develop within the state structures, then we are approaching a society in which direct and representative democracy are combined. But even this is not enough. The private sector and transnational corporations cannot merely be counterbalanced by enterprises directly serving the public interest. The very approach taken to development has to be changed.”

Capitalist rationality

“The experience of the twentieth century not only forces us to recognize that attempts at the rational organization of society on the model of the ‘big factory’ create a monstrous and totally irrational bureaucracy, but, still more important, also demonstrate the narrowness of the capitalist or ‘Western’ notion of rationality.”

“We will have found the way out of the labyrinth when we come to understand that the main task is not to achieve the highest possible growth rates, but to combine democracy and development, to ensure that every decision that is taken serves to guarantee the rights of the individual. The utopia of the homogeneous society, that has possessed the minds of modernizers of all political persuasions, has to be rejected. To have a democratic perspective means opting for a ‘motley society’.”

“Paradoxically, the growth of entrepreneurship ‘from below’ can also represent the outcome of the successful application of socialists measures. The overcoming of dependency, and the banishing of the bureaucratic and comprador capitalist interests that have exploited the country’s backwardness and dependency, open up definite opportunities for the development of democratic capitalism. There is inevitably a period of transition, during which the actual movement toward socialism is accompanied by the parallel development of national capitalist entrepreneurship. Ahead lies the promise of progress along several tracks and on several levels, and this is the sole guarantee of genuinely organic development.”

“Inevitably, numerous transitional forms of democratic economy will appear, such as genuine cooperation and communal property ownership; these will not in their essence be either socialist or capitalist. The role played by the public sector and by the state, which must be in the hands of the workers, is absolutely decisive for the creation of a viable democracy. Only the public sector can create the technological base for disseminating intermediate technologies, and for progressive changes in other sectors. Social ownership can take various forms – state, municipal and cooperative-collective. The decentralization of public property provides a guarantee of dynamic and integrated development that is unattainable either under the way of private monopolies, or under bureaucratic rule.

Such a strategy is impossible without the implementation of one of the most important socialist principles – that is, without democratic control over investments.”

“Communists and their allies shared the traditional idea of rigid delineation between the ‘democratic’ and ‘socialist’ phases of the revolutionary process. This concept proved untrue in practice even in relation to the Russian Revolution of 1917, and ha shown itself to be still more inapplicable under modern conditions. (…) However, the task of democratic change is precisely to create socialist institutions, which can serve as the core element of further development. Unless this task is carried out, democracy will never be consolidated; the social contradictions of a poor society will either blow it apart, or turn it into an empty farce.”

Beyond models

“The democratization of the economic structures and the dominant position of various types of public property should ensure greater equality, and as a result, a more stable society. (…) To jump across historical stages is impossible. The success off anti-capitalist measures creates the illusion of a ‘leap to socialism’. Nevertheless, society still passes through this stage, only taking a different route.  (…) Doing violence to reality not only leads to the degeneration of the revolution, but compromises its ideals on a world scale, and thus plays an objectively reactionary role.”

“A revolutionary regime in a backward country faces three possible variants. These are defeat and the restoration of the old order; degeneration, Thermion and ultimately, as the Soviet experience showed, bureaucratic restoration; and the consolidation of revolutionary changes through democratic reforms. The last of these roads is the most difficult. Ti presupposes the rise and survival of a sector of socialist self-management in an economy which retains elements of various systems. The new model of development gives birth to a new model of the class against capitalist and statist ones.”

“For a long time it was accepted that the main danger faced by a revolution came from its enemies. This is an illusion. The main danger faced by a revolution is inherent in the revolution itself. Revolutions, which go to far, perish. But a revolutionary process cannot be haltered by decree at a predetermined spot. A revolution has its own logic and its own momentum. Nevertheless the revolutionary process can, and at times must, be redirected onto a reformist track. In such cases there is talk of ‘rightward shifts’ and of ‘deviations’, but it is through such methods that the achievements of the revolution can and must be consolidated.
Reformism has to become part of revolutionary strategy. Making the transition from revolutionary ardour to the everyday work of reform is difficult, but it is precisely this which makes it possible to bring reality more closely into accord with the revolutionary ideal. “

“Without revolutionary resolve, the reformist project will never be implemented. Reformist illusions can therefore prove just as dangerous as revolutionary ones. (…) Reformist moods have provided the source of many great revolutionary movements. (…) Faced to choose between reform and revolution, a society will generally prefer reform, unless mass consciousness is firmly convinced that the revolution will proceed in a peaceful and democratic manner. (…) Historical reality, therefore, does not give us the luxury of a choice between revolutionism and reformism. Reformism lacks a purpose unless it is combined with revolutionary perspectives, and revolution without reformist work is equally pointless. (…) The democratic model is full of contradictions, but this is precisely the reason why it is viable.


“The temptation for the left to become nostalgic and conservative is strong and deeply rooted in the minds of millions of working people who form the core constituency  of the socialist movement. It is true that their situation has worsened since the introduction of neo-liberal reforms. But there is no way back. And this is why the neo-liberal global elite is not afraid of the nostalgic left.”

“The neo-liberal model of capitalism is unstable in principle. Rejecting the criticisms of both Marx and Keynes, and destroying the regulatory structures established under the influence of their ideas, the new world economic order has returned us to the rules of ‘classical’ capitalism – including overproduction and over-accumulation of capital.” (…) Marx was right when he insisted that these contradictions logically led to revolution. But where are the revolutionaries? Where is the revolutionary project?”

“Regulation remains an empty word unless the power of the New Big Brother is undermined politically and economically. That can be done and must be done internationally but through nation-states. The left must not just fight to conquer the state but first of all to transform it. That was the core idea of the original Marxist project and it is as valid today as it was hundred years ago. The state is weakened by the neo-liberal model –so we must use its weaknesses in our struggles.”

“We do not fight for more state or less state but for a different state. The network society will not emerge as a result of capitalist evolution but it can become a product of socialist transformation. We must recreate the public sector as decentralised and democratic, connected to community and accountable. We must re-establish the social security system on the basis of self-organisation and representation. And society must penetrate the state as deeply as possible.  (…) The left must reinvent the state- based on social networks, participation and citizenship, as opposed to the totalitarian hierarchies of the corporate Big Brother and multinational capitalist giants. (…) New Big Brother has to be stopped.”

“That can be achieved through class struggle and –through expropriation of big corporations. If we are afraid of thinking in these terms we are doomed to defeat politically and morally. Is the left capable of responding to the challenges it faces? Maybe it is not. But in this case the loser will not –just be the socialist movement but the humanity as a whole. “  


Envisioning Real Utopias - Erik Olin Wright

Envisioning Real Utopias - Erik Olin Wright

“Hugely rich and stimulating, Envisioning Real Utopias is many books in one: an incisive normative diagnoses of the harms done by capitalism; a masterful synthesis of the best work in political sociology and political economy over the past thirty years; an innovative theoretical framework for conceptualizing both the goals of progressive change and the strategies for their achievement; an inspiring survey of actually existing challenges to capitalism that have arisen within capitalism itself; and a compelling essay on the relation between the desirable, the viable and the achievable. Anyone interested in the future for leftist politics has to read this book”
Adam Swift, Balliol College, Oxford (from the back cover)

 Erik Olin Wright, Professor of Sociology at the University of Wisconsin, wrote an important book that is not only of great value for the left in general, but also for everyone looking for an alternative on mainstream economic politics, including those who consider P2P as a sort of harbinger of a new society. “Envisioning Real Utopias” is in my opinion a highly balanced, multi-sided and critical analysis of different strategies towards “socialism”, rooted in present day society. Wright’s theoretical approach is perhaps a little “too academic” for most activists, so it probably needs to be “translated” into a language people understand (but this is also true for a lot of material on ¨2P on forums like these, including my own contributions). What I particularly liked about his book was its nuanced, non-dogmatic and non-judgemental approach to issues that divide the (radical) left for many decades.

Another interesting feature of this work is the fact that is the result of a conscious collective effort by hundreds of people around the world and discussions held in venues from China to Norway. “The most striking fact of my discussions in those venues,” Wright observes, “was the commonality of the issues raised, the commonality of criticisms and concerns, and also the commonality of the general enthusiasm for the agenda I laid out.” According to Wright, we need to do two things: stress the word “social” in “socialism” and understand that democracy is the core problem for transcending capitalism.

I apologize for the length of this review; I will make it shorter when I have more time.

1. Why Real Utopias

“There was a time, not so long ago, when both critics and defenders of capitalism believed that “another world was possible. It was generally called socialism, ” Wright observes in his introduction. Today, most people lost this believe. Envisioning Real Utopias wants to provide empirical and theoretical grounding for radical democratic egalitarian visions of an alternative social world.

Wright looks closer at some examples of what he calls “real utopias”: Participatory city budgeting in the city of Porto Allegre (Brazil); Wikipedia as a profoundly anti-capitalist way of producing and disseminating knowledge; the Mondragón worker-owned cooperatives in the Basque region of Spain, the idea of an unconditional basic income and its pilot project in Namibia. According to Wright, “A vital belief in a utopian idea may be necessary to motivate people to set off on the journey from the status quo in the first place, even though the likely actual destination may fall short of the utopian ideal. Yet, vague utopian fantasies may lead us astray, encouraging us to embark on trips that have no real destinations at all, or, worse still, which lead us towards some unforeseeable abyss.” It may be naive to say that where there is a will there is a way, but it is certainly true that without a “will” many “ways” become impossible.

The belief in the possibility of radical alternatives to existing institutions has played an important role in contemporary political life,” Wright explains. “It is likely that the political space for social democratic reforms was, at least in part, expanded because more radical ruptures with capitalism were seen as possible, and that possibility in turn depended crucially on many people believing that radical ruptures were workable. The belief in the viability of revolutionary socialism, especially when backed by the grand historical experiments in the USSR and elsewhere, enhanced the achievability of reformist social democracy as a form of class compromise. The political conditions for progressive tinkering with social arrangements, therefore, may depend in significant ways of the presence of more radical visions of possible transformations.” And, importantly: (This) “does suggest that plausible visions of radical alternatives, with firm theoretical foundations, are an important condition for emancipatory social change.”

Today “radical visions” are not taken seriously anymore. There is an ideological rejection of grand designs, even by many people on the left. “This need not mean an abandonment of deeply egalitarian emancipatory values, but it does reflect a cynicism about the human capacity to realize those values on a substantial scale. This cynicism, in turn, weakens the progressive political forces in general,” Wright observes.

2. The Tasks of Emancipatory Social Science

According to Wright, any emancipatory social science faces three basic tasks: elaborating a systematic diagnosis and critique of the world as it exists; envisioning viable alternatives; and understanding the obstacles, possibilities and dilemmas of transformation. We must show that the explanation for suffering and inequality lies in specific properties of institutions and social structures, and that we need to start with the diagnosis and critique of the causal processes that generate these harms.  Behind every emancipatory theory lies an implicit theory of justice, Wright explains. His vision on justice, understood as “radical democratic egalitarian,” rests on two broad normative claims: social justice (all people need to have broadly equal access to the necessary material and social means) and political justice (all people need to have broadly equal access to the necessary means to participate in decisions about things affecting their lives).

This struggle for social justice is fought on a national level: “Although the moral universe for egalitarian ideals is global, the struggle for these ideals are deeply shaped by the practical constraints of the existing nation states since these are the social units within which political agency for social change remains largely concentrated.” As for political justice, Wright claims that people should have as much control as possible over all decisions affecting their lives, including economic decisions since these have massive effects on our collective fate. Social alternatives can be elaborated and evaluated in terms of three different criteria: desirability, viability, and achievability.

“The Marxist description of communism as a classless society governed by the principle ‘to each according to need, from each according to ability’ is almost silent on the actual institutional arrangements which would make this principle operative. But purely utopian thinking about alternatives may do relatively little to inform the practical task of institution building or to add credibility to challenges of existing institutions.”

Radical egalitarian ideas are often met with comments like ‘sounds good on paper, but it will never work’: “The best-known example of this problem is comprehensive central planning, the classic form in which revolutionaries attempted to realize socialist principles,” observes Wright. “As it turned out, there is a range of “perverse” unintended consequences of comprehensive central planning which subvert its intended goals, both because of the information overload generated by complexity and because of a range of problems linked to incentives.”  People generally don’t believe that “another world is possible. Society and its social rules are seen as “natural”, even if one accepts the diagnoses and critique of existing institutions. Such fatalism poses a serious problem for people committed to “change the world”. And to make things even worse, Wright adds that: “The history of human struggles for radical social change is filled with heroic victories over existing structures of oppression followed by the tragic construction of new forms of domination, oppression, and inequality.”

Therefore emancipatory social science needs to develop a scientifically grounded conception of viable alternative solutions. “The achievability of an alternative depends upon the extent to which it is possible to formulate coherent, compelling strategies, which both help create the conditions for implementing alternatives in the future and have the potential to mobilize the necessary social forces to support the alternative when these conditions occur” says Wright.

A theory of transformation involves four central components:
-       A theory of social reproduction
-       A theory of the gaps and contradictions within the process of reproduction
-        A theory of the underlying dynamics and trajectory of unintended social change
-        A theory of collective actors, strategies and struggles

“The final central component of a theory of social transformation is a theory of strategies of collective action and transformative struggle. The theory of social reproduction maps out the obstacles to social change we face. The theory of contradictions helps us understand the opportunities that exist in spite of hose obstacles. A theory of the dynamic trajectory –if we had such a theory- would tell us how these obstacles and opportunities are likely to evolve over time. And the theory of transformative strategy helps us understand how we can collectively contend with the obstacles and take advantage of the opportunities to move us in the direction of social emancipation.”

In 3, Wrights sums up eleven (well known) criticisms of capitalism:

1) Capitalist class relations perpetuate eliminable forms of human suffering:
2) Capitalism blocks the universalization of conditions for expansive human flourishing
3) Capitalism perpetuates eliminable deficits in individual freedom and autonomy
4) Capitalism violates liberal egalitarian principles of social justice.
5) Capitalism is inefficient in certain crucial respects
6) Capitalism has a systematic bias towards consumerism
7) Capitalism is environmentally destructive
8) Capitalist commodification threatens important broadly held values.
9) Capitalism, in a world of nation states, fuels militarism and imperialism
10) Capitalism corrodes community
11) Capitalism limits democracy

Reasons enough to look for alternatives, but do they exist? Wright comments on Marx’ theory of historical trajectory: “Marx had an intellectual brilliant, if ultimately unsatisfactory, solution to the problem of specifying an alternative to capitalism in a credible way. Rather than develop a systematic theoretical model to demonstrate the possibility of a viable emancipatory alternative, he proposed a theory of the long-term impossibility of capitalism”. Capitalism would ultimately become an impossible social order and be replaced by socialism. Wright: “The trick is then to make a credible case that a democratic egalitarian organization of the economy and society is a plausible form of such an alternative. (…) Here is where Marx’ theory becomes especially elegant, for the contradictions which propel capitalism along its trajectory of self-erosion also create a historical agent –the working class- which has both have an interest in creating a democratic egalitarian society and an increasing capacity to translate that interest into action. Given all of those elements, Marx’ actual theory of socialism itself involves a kind of pragmatist faith in the principle “where there is a will there is a way”, grounded in a spirit of experimental problem-solving by creative solidaristic workers.”

Marx was relatively vague about the actual process through which the destruction of the political superstructure of capitalism would occur, and provided only the slightest of hints about what socialist institutions would look like. Socialism would replace private ownership of the means of production by some collective form of ownership and some form of comprehensive planning would replace the market.  Wright concludes that “Marx proposed a highly deterministic theory of the demise of capitalism and a relatively voluntaristic theory of the construction of its alternative.” His final thesis on communism can be considered a utopian affirmation of the normative ideal of radical egalitarianism.

Wright acknowledge that there is much in the Marxist tradition of social theory that is of great value, particularly its critique of capitalism and the conceptual framework of its analysis of class. But there are also some important inadequacies in Marx’ theory of the future of capitalism, beginning with the theory of historical trajectory : “Crisis tendencies within capitalism do not appear to have an inherent tendency to become ever more intense over time; class structures have become more complex over time, rather than simplified through a process of homogenizing proletarianization; the collective capacity of the working class to challenge structures of capitalist power seems to decline within mature capitalist societies; ruptural strategies of social transformation, even if they were capable of overthrowing the capitalist state, do not seem to provide a socio-political setting for sustained democratic experimentalism.”

Capitalism has a tendency to periodic economic crises of greater or lesser severity, but there is no overall tendency of intensification of disruptions to capital accumulation, so we no longer have grounds for the idea that capitalism becomes progressively more fragile over time. “One can still hold the view that a severe and prolonged capitalist crisis, if it were to occur, might provide a historical “window of opportunity” for radical social transformation”, Wright argues, “but this is much weaker than a prediction about the increasing likelihood of such crisis over time”.  Wright claims that Marxists generally underestimate the extent to which state interventions can significantly moderate economic disruptions. Second, he does not see a long-term continuous tendency for the rate of profit to decline within mature capitalist economies and third, he considers the conceptual foundations of the “law of the falling tendency of the rate of profit” problematic.

On the other hand, can it be that the heightened globalization of modern capitalism undermines the capacity of the national states to moderate crisis tendencies? And if that is the case, will future economic crises not be far more intense than in the past since no effective global crisis management institutions are likely to develop? The financial crisis of 2008 may signal this new process of intensification. In addition, the environmental destruction generated by capitalist growth could ultimately destroy the ecological conditions for the existence of capitalism. And third, the shift from an industrial economy to a service economy, or a “knowledge economy”, could mean that it will be more and more difficult for owners of capital to dominate economic activity. “Intellectual property is inherently more difficult to monopolize than physical capital,” Wright explains. “Particularly with the advent of new information technologies it is simply too easy for people to subvert private property rights in information and knowledge. (…) Furthermore, the production of knowledge and information is most efficiently done as a collaborative, cooperative social activity, and thus the imposition of capitalist property rights on this process increasingly acts as a “fetter” on the further development of these forces of production. As a result, in the long run, capitalism will become more and more vulnerable to the challenge of non-capitalist ways of organizing the production and distribution of information and knowledge.”

These arguments do suggest that the long-term trajectory of capitalism will culminate in its self-destruction, but they remain speculative and underdeveloped, Wright concludes that capitalism may be undesirable, while still being reproducible. But this does not imply that it is impossible to transform the system: “Even if its internal dynamics do not generate a trajectory towards self-destruction, it could still be transformed through collective action. But such collective action will not necessarily be abetted by the increasing fragility of capitalism.”

What proletarianization?

The second major problem with he classical Marxist theory of the destiny of capitalism concerns the theory of proletarianization: “While it is certainly true that the course of capitalist development has incorporated an increasing proportion of the labour force into capitalist employment relations, in the developed capitalist world this has not resulted in a process of intensified proletarianization and class homogenization but rather in a trajectory of increasing complexity of class structure.”

Many locations in the classical class structure do not fall neatly in the two basic positions (worker versus capitalist): “In particular, class locations like those of managers and supervisors have the relational properties of both capitalists and workers and thus occupy “contradictory locations.” Professionals and highly skilled technical workers also occupy contradictory locations through their control over credentials. Somewhat less than half of the labour force in most developed capitalist countries occupies such contradictory locations.” Second, after a very long period of decline, in many capitalist countries there has been a market growth of self-employment and small employers. “To be sure, many of these small firms and independent self-employed persons are subordinated in various ways to large corporations, but nevertheless they are quit distinct from the working class,” Wright explains. Third, despite the increasing concentration of wealth in the hands of a small group of super rich, (especially in the US), it is also the case that an increasing proportion of the population have some corporate investments, either in the form of direct investments in stocks or in contributory pension funds. This does not mean that we are moving towards a sort of “people’s capitalism”, but it adds complexity to the class structure of capitalism. Fourth, with the large-scale entry of women into the labour force, the ways in witch many individuals are linked to the class structures have become more complex than in the past, since in two-earner households family members are linked to the class structure through two jobs, not just one. And finally, there is increasing stratification within the working class in many developed capitalist countries. “Non of these forms of complexity in class relations mean that class is of declining importance in people’s lives, or that class structures are becoming less capitalist in any fundamental way. They simply mean that the structural transformations predicted by the intensification of class struggle thesis have not occurred,” concludes Wright

The result of this increasing heterogeneity of interests amongst employees is that the capacity of the working class to challenge capitalism seems to decline within developed capitalist societies. This heterogeneity makes the task of building solidarity and forming stable political coalitions more difficult. “But the weakness of system-challenging class capacity also reflects ways in which capitalist democracies have offered people real opportunities to organize for significant improvement in their conditions of life within the constraints of capitalism” explains Wright, clearly referring to reformism. But… “The resulting “class compromises” -in the form of the labour movement and the welfare state- have enabled workers to make real gains.” Wright acknowledges that these gains have been eroded in the last decades, but claims that they remain sufficiently strong to obstruct anti-system solidarities. Here, he makes a very important point, clearly contradicting the so-called “death” of reformism” proclaimed many times by the radical left: “Given the robustness of capitalism and the strength of the institutions that reproduce it, at least in mature capitalist democracies, such class compromises are probably still a credible course of action for working-class organisations. In any case, in no developed capitalist society has the working class developed a collective capacity to challenge the foundations of capitalist power. “

Wright sees no examples of significant revolutionary challenges to capitalism in developed capitalist countries, only in less developed capitalist societies. In a few cases socialist revolutionaries have succeeded in gaining power, but “While there have been brief episodes of such egalitarian democratic participation within attempts at the revolutionary transformations of capitalism, such episodes have always been short-lived and relatively isolated.” The reason can be found in the extreme pressures, both economic and military, from powerful capitalist countries during the aftermath of these revolutions leading to an urgency to consolidate power and build strong institutions to withstand these pressures. “Since democratic experimentalism is inevitable a messy process, which depend heavily on an ability to learn from one’s mistakes over time, it is understandable that revolutionary regimes might have felt, they could not wait for this to work” Wright guesses. Another problem could be the low level of economic development of the economies within which revolutionary movements succeeded in seizing political power: “Revolutionary parties may in certain circumstances be effective “organizational weapons” for toppling capitalist states, but they appear to be extremely ineffective means for constructing a democratic egalitarian alternative. As a result, the empirical cases we have of ruptures with capitalism have resulted in authoritarian state-bureaucratic forms of economic organization rather than anything approaching a democratic-egalitarian alternative to capitalism.”

An alternative approach

Faced with the facts of life, Wright tries an alternative formulation of the problem:  In the absence of a compelling dynamic theory of the destiny of capitalism, an alternative strategy is to shift our efforts from building a theory of dynamic trajectory to building a theory of structural possibility”. In other words, a theory that does not predict the course of development over time, but chart the range of possibilities for institutional changes under different social conditions.

According to Wright, there is no social theory sufficiently powerful to even begin to construct a comprehensive representation of possible social destinations or possible futures. More over, such a theory might be impossible in principle: “The process of social change is too complex and too deeply affected by contingent concatenations of causal processes to be represented in the form of detailed maps of possible futures”. Therefore, Wright suggests: “Perhaps the best way we can do is to think of the project of emancipatory social change as a voyage of exploration. We leave to a well-known world with a compass that shows us the direction we want to go (…) but without a map which lays out the entire route from the point of departure to the final destination.” 

This approach retains a strong normative vision of life beyond capitalism, but acknowledges the limitations of our scientific knowledge of the real possibilities of transcending capitalism. This is however not the same as embracing the false certainty that there exist no limits one can cross for constructing a radical democratic egalitarian alternative. “We need to construct what might be called a socialist compass: the principles which tell us if we are moving in the right direction” concludes Wright.

5. The Socialist Compass

“Since the pivot of the concept of capitalism is the private ownership of the means of production, this has generally meant that socialism is understood as requiring public ownership of one form or another, most typically through the institutional device of state ownership.”  

Wright defines power as the capacity of actors to accomplish things in the world. He distinguishes three important forms: economic power, based on the control over economic resources; state power, based on the control over rule making and rule enforcing capacity over territory; and social power, based on the capacity to mobilize people for voluntary collective actions of various sorts. “Using slogans, we can say that there are three ways of getting people to do things: you can bribe them; you can force them; you can convince them. These correspond to the exercise of economic power, state power and social power. And… these are closely linked to the distinctions between capitalism, statist and socialism”. Wright goes on defining ownership as a multidimensional idea involving a bundle of different kinds of enforceable rights (i.e. effective powers) over things. Ownership varies along three dimensions: the agents of ownership, the object of ownership and the rights of ownership. But: “In practice, the actual ownership relations over the means of production in all capitalist economies are more complex (…) since the effective power over many aspects of the use of machines, buildings, land, raw materials, and so forth have been removed from the private owners and are held by the state (for example health and safety requirements, taxation…). And “The issue is further complicated by the well-known distinction between “ownership” and “control” in many economic contexts. Large capitalist corporations are owned by shareholders, but the actual control over the operation of the firms is in the hands of managers and executives”. These factors do not prevent that even in highly regulated economies private owners retain the right to buy and sell property from which they generate an income. This is an essential property of ownership because it determines the allocation of the social surplus to alternative forms of investment, and thus the directions of economic change over time.

Three domains of power and interaction: the state, the economy, and civil society

Wright uses Michael Mann’s definition of the state as the organization with an administrative capacity to impose binding rules and regulations over territories. “The legitimate use of force is one of the key ways this is accomplished, but it is not necessarily the most important way, Wright explains. “State power is then defined as the effective capacity to impose rules and regulate social relations over territory, a capacity which depends on such things as information and communications infrastructure, the ideological commitments of citizens to obey rules and commands, the level of discipline of administrative officials, the practical effectiveness of the regulations to solve problems, as well as the monopoly over the legitimate use of coercion.”

This idea of socialism rooted in social power is not the conventional way of understanding socialism The concept of socialism proposed by Wright is grounded in the distinction between state power and social power, state ownership and social ownership. Wright defines socialism as an economic structure within which the means of production are socially owned and the allocation and use of resources for different social purposes is accomplished through the exercise of what can be termed “social power”. By that he means power that is rooted in the capacity to mobilize people for cooperative, voluntary collective actions of various sorts in civil society. In these terms the ideal of democracy is a society in which state power is fully subordinated to and accountable to social power. The people, organized into various associations (parties, communities, unions…) rule society collectively. “Democracy is thus, inherently, a deeply socialist principle” Wright concludes. “If “democracy” is the label for the subordination of state power to social power, “socialism” is the term for the subordination of economic power to social power.” 

The market and the notion of hybrids

Wright’s concept of socialism differs from conventional definitions also because it does not say anything explicitly about markets. Particularly in the Marxist tradition, socialism has usually been treaded as a rationally planned economy contrasted to the anarchic character of the capitalist market economy. Wright’s definition of socialism does not preclude the possibility that markets could play a substantial role in coordinating the activities of socially owned and controlled enterprises. Social empowerment over the economy means broad-based encompassing economic democracy.
In terms of the definitions used by Wright, no existing economic system has ever been purely capitalist, statist or socialist, since it is never the case that the allegation, control and use of economic resources is determined by a single form of power. He points out that “all existing capitalist societies contain significant elements of statism since states everywhere allocate part of the social surplus for various kinds of investments, especially in things like public infrastructure, defence and education, ” and that “Capitalist societies also always contain at least some socialist elements; at least through the ways collective actors in civil society influence the allocation of economic resources indirectly through their efforts to influence the state and capitalist corporations. The use of the simple, unmodified expression “capitalism” to describe an empirical case is thus shorthand for something like “a hybrid economic structure within which capitalism is the predominant way of organizing economic activity.”  

Pathways to social empowerment

We have a pretty good idea of the institutional arrangements of capitalism and statism, but not of socialism as an ideal of social empowerment over economic activity. Wright does not think that we need propose blueprints for the realisation of “socialism”, but we do need a “socialist compass”. In traditional socialist theories the essential route by which popular power was translated into control over the economy was through the state. “The basic idea was this: Political parties are associations formed in civil society with the goal of influencing and potentially controlling state power. People join parties in pursuit of certain objectives, and their power depends in significant ways upon their capacity to mobilize such participation for collective action of various sorts. (…) If a socialist party (…) controls the state, which in turn controls the economy, then one can argue that in this situation an empowered civil society controls the economic system of production and distribution”.

This “statist socialism” was at the heart of traditional Marxist ideas: the party was organically connected to the working class and accountable to associated workers. Thus its control over the state would be a mechanism for civil society to control the state. Revolutionary socialism also envisioned a radical reorganization of the state institutions and the economy, through councils or “soviets” allowing the involvement of workers’ associations in the exercise of power in both the state and production. “The party was seen as pivotal to this process, since it would provide the leadership (play the “vanguard” role) for such a translation of associations in civil society into effective social power,” says Wright. But it turned out differently “Whether because of the inherent tendency of revolutionary party organizations to concentrate power at the top, or because of the terrible constraints of the historical circumstances of the Russian Revolution and its aftermath, whatever what potential there was for the Communist party to be subordinated to an autonomous civil society was destroyed in the course of the Russian Civil War and the early years of the revolution. By the time the new Soviet state had consolidated power and launched its concerted efforts at transforming the economy, the Party had become a mechanism of state domination, a vehicle for penetrating civil society and controlling economic organizations. The Soviet Union, therefore, became the archetype of authoritarian statism under the ideological banner of socialism, but not of a socialism rooted in democratic social empowerment. Subsequent successful revolutionary socialist parties, for all their differences, followed a broadly similar path, creating various forms of statism.”

Because of the failure of Stalinism, few socialists today believe that comprehensive statist central planning is a viable structure for realizing socialist goals. “Nevertheless”, says Wright, “statist socialism remains an important component of any likely process of social empowerment. The state will remain central to the provision of a wide rage of public goods, from health to education to public transportation. The central question for socialists, then, is the extent to which these aspects of state provision can effectively be brought under the control of a democratically empowered civil society. In capitalist societies, typically, these aspects of the provision of public goods by the state are only weakly subordinated to social power through the institutions of representative democracy. Because of the enormous influence of capitalist economic power on state policies, such public goods are often more geared to the needs of capitalist accumulation than to social needs. Depending the democratic quality of the state is thus the pivotal problem in relation to direct state provision of goods and services becoming a genuine pathway to social empowerment.”

From statist socialism to Parecon

Wright analyses the following theoretical models: (revolutionary) statist socialism, social democratic statist economic regulation, capitalist statist economic regulation, associational democracy, social capitalism, cooperative market economy, social economy and participatory socialism. The most prominent example of “associational democracy “, is the tripartite neo-corporatist arrangements in some social democratic societies in which organized labour, associations of employers, and the state meet together to bargain over various kinds of economic regulations, especially those involved in labour market and employment relations.

“Socialism can be defined as an economic structure in which social power in its multiple forms plays the dominant role in organizing economic activity, both directly, and indirectly through the ways social power shapes the existence of both state power and economic power. This is the equivalent of arguing for the radical democratization of both state and economy, and this in turn requires an associationally rich civil society” (my emphasis) says Wright. But there are sceptical notes to make. “First, a vibrant civil society is precisely one with a multitude of heterogeneous associations, networks, and communities, built around different goals, with different kind of members based on different sorts of solidarities. While this pluralistic heterogeneity may provide a context for a public sphere or debate and sociability, it does not seem like a promising basis for the kind of coherent power needed to effectively control the state or the economy. Second, the voluntary associations that compromise civil society include many nasty associations, based on exclusion, narrow interests, and the preservation of privilege. (take for example the KKK).

Wright disagree with the anarchist conception of transcending capitalism that “imagines a world in which the voluntarily coordinated collective action of people in civil society can spontaneously achieve sufficient coherence as to provide for social order and social reproduction without the necessity of a state”. Socialism, in contrast, “requires a state with real power to institute and enforce the rules of the game and mechanisms of coordination without which the collective power of civil society would be unable to achieve the necessary integration to control either state or economy.”

The second source of scepticism centres on the problem of institutional mechanisms: “Why should we believe that such institutions are possible?” Wright asks. “Most people are too passive to care about any form of real empowerment. We need experts to make decisions about complex technical matters. Capitalist firms driven by the profit motive are needed for innovation and efficient investment. Only centralized, professionalized state apparatus, relatively insulated from popular pressure and special interests, can properly regulate the economy in a technical efficient manner.”

The final source of his scepticism is that it is impossible to create such institutions within capitalist society: “Attempts at building such institutions (…) will inevitably provoke a backlash from elites whose power is rooted in the state and the capitalist economy. Social empowerment will only be tolerated as long as it is not a threat to the basic power relations of capitalism.”

Democracy, social empowerment and the state

In chapter 6 Wright explores a range of real utopian proposals that try to satisfy three main criteria: the institutional designs involved are desirable in terms of radical egalitarian emancipatory ideals; they constitute viable alternatives to existing arrangements and they should contribute in some way to movement along the pathways of social empowerment.

“When radical critics of capitalism become desperate for empirical models that embody their aspirations, wishful thinking can triumph over sober assessments.” (So) “what is needed are accounts of empirical cases that are neither gullible nor cynical, but try to fully recognize the complexity and dilemmas as well as the real potentials of practical efforts at a social empowerment.”

The abstract idea of democracy as “rule by the people” is translated into actual systems of democratic governance through three primary institutional forms: direct democracy, representative democracy, and associational democracy. Wright point out the main weaknesses of democracies in advanced countries: “When associations involved in democratic governance are themselves internally hierarchical and bureaucratic, when they represent only some interests in society and exclude the unassimilated, when they are subordinated in various ways to elite interests, or when they are run by professionals and membership consists of little more than financial donation, governance through secondary associations can become very undemocratic.” Wright defends the idea of direct democracy or what he calls new forms of empowered participatory governance. “The idea that people should have the power to participate in making decisions over matters which shape their collective fate evokes the idea of direct participation, not proxy participation.”

Wright refers once again to municipal participatory budgeting in Porto Allegre. He points out that “empowered, participatory forms of direct democracy can increase the involvement and commitment of citizens in public life, make officials and politicians more accountable, improve the effectiveness of government, and make social policies more just.” He does not share the common criticism that people are too apathetic, ignorant, or busy to participate: “Evidence from empirical cases suggests that when there are opportunities for people to become involved in decisions addressing practical problems that are deeply important to them, they do participate in substantial numbers. Poor people often participate more than wealthy ones when such opportunities are available.”

He also points out that “In order for bottom-up participation to be meaningful, it is essential that significant aspects of real decision-making power within the machinery of the state be devolved to local units of action such as neighbourhood councils, local school councils, workplace councils, and so on.”  But there is a substantial role for central government and central authority as well: “by coordinating and distributing resources, by solving problems that local units cannot address by themselves; by rectifying pathological or incompetent decision making in failing groups; and by diffusing innovations and learning across boundaries.”

Wright also believes that attempts at creating and consolidating institutions of empowered participation are very unlikely to be durable in the absence of “organized countervailing power such as popular political parties, unions, and social movement organizations.”

Four pathways to social empowerment involve the state: statist socialism, social democratic statist regulation, associational democracy, and participatory socialism. In all of these the key issue is the relationship between social power in civil society and state power. “Unless there are effective mechanisms for subordinating state power to social power in civil society, none of these pathways can effectively translate social power into control over the economy. If socialism as an alternative to capitalism is at its core economic democracy, it is essential (…) that democracy itself be democratized”, Wright argues. And :”Although it does make sense to elaborate the theoretical concept of a capitalist-type state, actual state institutions can combine capitalist and non-capitalist forms. The state can contain internally contradictory elements pushing it to act in contradictory ways. Sates, like economic structures, are structural hybrids. So, while it is indeed the case that the state in capitalist society is a capitalist state, it is not merely a capitalist state: it is a hybrid structure within which capitalist forms are dominant.”

Social Empowerment and the Economy

At the centre of a socialist alternative to capitalism is the problem of economic institutions, specifically the social organization of power over the allocation of resources and control of production and distribution. In the social empowerment conception of socialism that Wrights proposes, the problem of controlling economic processes is less clear-cut then under statist socialism: “There are multiple, heterogeneous institutional forms along the various pathways through which social power can be exercised over the production and distribution of goods and services”. In most of Wright’s proposals the institutional designs for social empowerment leave a substantial role for markets, and thus they tend to envision some sort of “market socialism”. “Few theories today hold on to the believe that a complex, large-scale economy could be viable without some role for markets –understood as a system of decentralized, voluntary exchanges involving prices that are responsive to supply and demand –in economic coordination,” Wright explains. (This implies) that “decentralised exchanges involving market-generated prices will play a significant role in economic organization. To most contemporary critics of capitalism, comprehensive planning whether organised through centralized bureaucratic institutions or through participatory decentralised institutions, no longer seems a viable alternative.” 

Wright defines the social economy quite broadly as economic activity that is directly organized and controlled through the exercise of some form of social power. It involves the production and distribution of goods and services- economic activity- organized directly through the use of social power. A prominent example is Wikipedia. Wrights claims that Wikipedia’s fundamental principles of organization are not simply non-capitalist; they are thoroughly anti-capitalist:

1.     Non-market relations: voluntary, unpaid contributions and free access;
2.     Full, open, egalitarian participation
3.     Direct and deliberative interactions among contributors;
4.     Democratic governance and adjudication. At its inception all Wikipedians were essentially editorial administrators (sysops) but as vandalism and other mischief intensified with the growing notoriety of the encyclopaedia, a kind of quasi-administrative structure was instituted which enabled users to acquire different levels of organizational responsibility and roles in adjucating conflicts. This is one of the most interesting aspects of the development of Wikipedia as a real utopian institutional design: the emergence and evolution of mechanisms of social control and adjudication suitable for such a freewheeling network structure.

A Theory of Transformation

In the third and final part of his book, Wright looks at the transformation process towards socialism. Even if one accepts the vision of social empowerment as both desirable and viable, the question remains: is it achievable?  What about the opposition of elites whose interests would be threatened by such changes? Social reproduction in capitalist society takes place through two sorts of interconnected processes, passive reproduction and active reproduction: “Active social reproduction is the result of specific institutions and structures, which at least in part are designed to serve the purpose of social reproduction. These include a wide variety of institutions: the police, the courts, the state administration, education, the media, churches, and so on,” Wright explains. “The basic (implicit) proposition of theories of social reproduction is this: Social structures and institutions that systematically impose harms on people require vigorous mechanisms of active social reproduction in order to be sustained over time. Oppression and exploitation (…) require active mechanisms of social reproduction in order to be sustained.”

The problem of social reproduction is grounded in the latent potential for people collectively to challenged structures of domination, oppression and exploitation. Institutions affect the actions of people, individually and collectively, mainly through four mechanisms: coercion, institutional rules, ideology, and material interests.  They interact in a variety of ways, some more effective than others in creating a system of coherent social reproduction. According to Wright, “The dilemma faced by socialist parties historically was basically this: if they participated seriously in electoral competition, the they would be subjected to a whole series of systematic pressures to act responsibly and play by the rules which over time would erode militancy; if, on the other hand, they abstained from electoral competition in order to avoid these pressures, then they risked political marginalization since other parties would be better positioned to champion the immediate economic interests of workers and other potential supporters of socialist parties.”  However, “This does not mean that socialist and social democratic parties have not in fact served important material interests of workers, but they have done so in ways which broadly strengthen rather than undermine capitalism.”

A central issue in the theory of social reproduction is the extent to which the ideology and culture contribute to the sustainability of structures of power, inequality, and privilege. “Institutions of socialization, such as the family and schools, are generally concerned with instilling habits and dispositions that will enable children to function well in the world when they are adults, to live the best lives possible given the constraints they are expected to face,” Wright points out. “This means that parents and teachers try as best they can to encourage dispositions that are the least compatible with effective functioning within existing structures of power, inequality, and privilege.”

Of the various aspects of ideology and belief formation that bear on the problem of social reproduction and potential challenges to structures of power and privilege, perhaps the most important are the beliefs about what is possible.

One of the mechanisms, which tie the welfare of individuals to the effective functioning of capitalist structures are material interests: “Capitalism organizes the material conditions of life of people in such a way that nearly everyone fares better when the capitalist economy is doing well than when it’s doing badly. (…) This near-universal dependence of everyone’s material interests on the pursuit of profits by capitalist firms is perhaps the most fundamental mechanism of the social reproduction of capitalist society. It lends credibility to the claim that capitalism is in fact in everyone’s interest, not just the interests of the capitalist class, and it places a considerable greater burden on the argument that an alternative to capitalism would be preferable. It underwrites broad public support for a wide range of state policies designed to sustain robust capital accumulation and acts as a systematic constraint on the pursuit of policies that might in other ways benefit a large majority of people but which might threaten capitalist profits. So long as capitalism can effectively tie the material interests of the large majority of the population to the interests of capital, other mechanisms of social reproduction have less work to do.”

The underlying dynamics of unintended social change

Any project of radical social transformation will face systematic obstacles generated by mechanisms of social reproduction, but these obstacles will have cracks and spaces for action because of the limits and contradictions of reproduction which, at least periodically, make transformative strategies possible” Wright explains. “The actual trajectory of large-scale social change that we observe in history is the result of the interaction of two kinds of change-generating processes: first, the cumulative unintended by-products of the actions of people operating under existing social relations, and second, the cumulative intended effects of conscious projects of social change by people acting strategically to transform those social relations. (…) In each of these cases people engage in actions not in an effort to change the world, but to solve specific problems which the face. The cumulative aggregate effects of such individual actions, however, are social changes with very broad ramifications.”

“Both deliberate and unintended processes of social change are crucial for emancipatory transformation,” Wright claims. “Significant movement towards radical egalitarian democratic social empowerment is not something that will happen just by accident as a by-product of social action, and since such popular empowerment threatens the interest of powerful actors, this strategic action typically involves struggle. But strategy and struggle are not enough. For radical transformation to occur conditions must be “ripe”; the contradictions and gaps in the processes of social reproduction must create real opportunities for strategy to have meaningful transformative effects.”

“In order to have a coherent long-term strategy we need at least a rough understanding of the general trajectory of unintended, unplanned social changes into the future,” Wright explains. “Classical Marxism proposed precisely such a theory. (…) Marx attempted to identify how the unintended consequences of capitalist competition and exploitation in the process of capital accumulation generate “laws of motion” of capitalism which push it into a specific trajectory of development, (…) marked by (…) an ever-expanding breadth and depth of market relations culminating in global capitalism and the commodification of social life; an increasing concentration and centralization of capital; a general tendency for capital intensity and productivity to increase over time; a cyclical intensification of economic crisis; a tendency towards both the expansion of the working class and its homogenization, and as a result, its increasing collective capacity for struggle; and a weakening of the mechanisms of active social reproduction as a result of the long-term tendency of the rate of profit to fall”

Wright agrees that many of the predictions of historical materialism have been borne out by the actual history of capitalism, in particular globalization, concentration of capital and commodification penetrating ever more pervasively into social life. But other predictions do not seem adequate, such as a systematic tendency towards intensification of crisis; the simplification and polarization of the class structure and the working class becoming ever more homogeneous. Finally, the economic mechanisms of social reproduction that tie the immediate material interests of most people to capitalism do not seem to have been dramatically weakened. “Therefore, historical materialism, understood as the “theory of capitalism’s future”, does not seem to be an adequate theory of the trajectory of unintended social change on which to ground the problem of developing strategies for emancipatory transformation,” concludes Wright, who does not believe that such a theory at present exists: “At best our theories of the immanent tendencies of social change beyond the near future are simply extrapolations of observable tendencies from the recent past to the present or speculations about longer-term possibilities.”

He determines a disjuncture between the desirable time-horizons of strategic action and planning for radical social change and the effective time-horizons of our theories. “This may simply reflect the lack of development of good theory,” Wright adds. “But it may also reflect the inherent complexity of the problem. It is possible, after all, to have very powerful theories explaining the historical trajectory of development in the past without being able to develop a theory of future tendencies. This is the case for evolutionary biology, which has sound explanations for the trajectory of living things from single-celled creatures to the present, but virtually no theory of what future evolution will look like. This may also be the case for the theory of social change: we may be able to provide rigorous and convincing explanations for the trajectory of change up to the present, but still have almost no ability to explain very much about what the future holds in store.”
The lack of a compelling theory of the long-term immanent trajectory of unintended social change places a greater burden on the theory of transformative strategies, “for it is forced to grapple with the problem of transformative struggles without a satisfactory understanding of the trajectory of conditions such struggles are likely to encounter” Wright argues.

Strategies of Transformation

The final element of a theory of transformation focuses directly on collective action and transformative strategy. Ruptural transformations envision creating new institutions of social empowerment through a sharp break within existing institutions and social structures: “The central idea is that through direct confrontation and political struggles it is possible to create a radical disjuncture in institutional structures in which existing institutions are destroyed and new ones built in a fairly rapid way. Smash first, build second. A revolutionary scenario for the transformation to socialism is the iconic version of this: a revolution constitutes a decisive, encompassing victory of popular forces for social empowerment resulting in the rapid transformation of the structures of the state and the foundations of economic structures. “

In contrast, interstitial transformations seek to build new forms of social empowerment in the niches and margins of capitalist society, often where they do not seem to pose any immediate threat to dominant classes and elites. “This is the strategy of building institutions of social empowerment that is most deeply embedded in civil society and which often falls below the radar screen of radical critics of capitalism,” Wright points out. Third, symbiotic transformations involve strategies in which extending and deepening the institutional forms of popular social empowerment simultaneously helps solve certain practical problems faced by dominant classes and elites. “The democratization of the capitalist state had this character: democracy was the result of concentrated pressures and struggles from below, which were initially seen as a serious threat to the stability of the capitalist dominance, but in the end liberal democracy helped solve a wide range of problems, and in doing so contributed to that stability.”

These three visions correspond broadly to the revolutionary socialist, anarchist, and social democratic traditions of anti-capitalism. In ruptural strategies, classes organized through political parties are the central collective actors. According to Wright, none of these strategies is simple and unproblematic. All contain dilemmas, risks, and limits, and none of them guarantee success: “In different times and places, one or another of these modes of transformation may be the most effective, but often all of them are relevant. It often happens that activists become deeply committed to one or another of these strategic visions, seeing them as being universally valid. As a result, considerable energy is expended fighting against the rejected strategic models. A long-term political project of emancipatory transformation with any prospect for success must grapple with the messy problem of combining different elements of these strategies.”

Ruptural Transformation

Wright does not believe that large-scale ruptural strategies for constructing a democratic egalitarian socialism are plausible in the world in which we currently live.
 While revolutionary rhetoric has not completely disappeared, few critics of capitalism today imagine that a revolutionary overthrow of the state in the developed capitalist countries is a plausible strategy of emancipatory social transformation.” According to Wright, in developed capitalist countries with functioning liberal democratic institutions, the strategy towards socialism is submitted to ‘normal’ democratic processes.  However, “This does not mean that the ruptural strategy would not include fundamental transformations of the form of the state itself –democratic deepening of the state is certainly a central part of the agenda of social empowerment”. But “If a ruptural strategy of transformation is at all feasible, it will not take the form of a violent insurrectionary assault and overthrow of the state by extra-parliamentary means in the model of classical revolutions.”

Under what conditions is a ruptural strategy for socialism sufficiently in the material interests of the majority of people to render it a plausible strategy for transformation? Wright considers several options, depending on the circumstances. The first he calls the socialist fantasy path, an unrealistic view that imagines that a rupture with capitalism will immediately improve the material conditions of people. The pessimistic path predicts economic collapse, whereas the optimistic path recognizes that any rupture with capitalism would necessarily entail significant economic disruption and thus sacrifice: “Supply chains, systems of distribution, credit markets, pricing systems, and many other pivotal elements of economic integration would be deeply disrupted. This would certainly precipitate a significant decline in production and standards of living for some period of time. This would be intensified by capital flight and disinvestments in the run-up to a socialist rupture. Since many capitalists would pre-emptively respond to the “writings on the wall”.

Wright continues: “Depending upon how deep and prolonged the transition trough is, it may not be in the material interests of most people to support a ruptural path to socialism even if the firmly believe that life would be better once the transition was weathered. Interests must always be understood within specific time-horizons, and if the transition trough continues for a sufficient extended period it is unlikely to be seen by most people as in their material interests.” As the economy declines political forces opposed to socialism will argue strenuously that the trajectory will continue downwards to catastrophe and that the transition should be reversed.

Wright claims also that a ruptural transition to socialism under democratic conditions requires a broad coalition between the middle class and the working class: “In addition to the general problem of a decline in political support in a prolonged transition trough, there is likely to be a particularly acute problem of middle-class defections from the socialist coalition (…) Then it is unlikely that a ruptural transition to socialism would be sustainable under democratic conditions. (…) This means that a democratically elected socialist government attempting to build socialist institutions through a ruptural strategy would either face political defeat in a subsequent election or, in order to stay in power and traverse the transition, would have to resort to undemocratic means. “

Interstitial Transformation

Does this mean that Wright defends the ‘reformist path’ towards socialism? It depends on how one defines reformism. “The only real alternative is some sort of strategy that envisions transformation largely as a process of metamorphosis in which relatively small transformations cumulatively generate a qualitative shift in the dynamics and logic of a social system,” Wright argues. “This does not imply that transformation is a smooth, non-conflictual process that somehow transcends antagonistic interests. A democratic egalitarian project of social emancipation is a challenge to exploitation and domination, inequality and privilege, and thus emancipatory metamorphosis will entail power struggles and confrontations with dominant classes and elites.”

Wright explains that many projects within the social economy are the result of interstitial strategies. “A wide variety of internet-based strategies that subvert capitalist intellectual property rights (e.g. Napster, the music-sharing site); open-source software and technology projects; fair-trade networks designed to link producer cooperatives in poor countries to consumers in rich countries; efforts to create global labour and environmental standards through various kinds of monitoring and certification projects.” Wright refers to these as “the revolutionary anarchist and evolutionary anarchist strategic visions, not because only anarchists hold these views, but because the broad idea of not using the state as an instrument of social emancipation is so closely linked to the anarchist tradition.”

“While interstitial strategies may expand the scope of social empowerment, it is difficult to see how they could ever by themselves erode the basic structural power of capital sufficiently to dissolve the capitalist limits on emancipatory social change,” Wright points out. “The basic problem of both scenarios concerns their stance towards the state.” (…) Then follows a very important point: “While the state may indeed be a capitalist state which plays a substantial role in reproducing capitalist relations, it is not merely a capitalist state embodying a pure functional logic for sustaining capitalism. The state contains a heterogeneous set of apparatuses, unevenly integrated into a loosely coupled ensemble, in which a variety of interests and ideologies interact. It is an arena of struggle in which contending forces in civil society meet. It is a site for class compromise as well as class domination. In short, the state must be understood not simply in terms of its relationship tot social reproduction, but also in terms of the gaps and contradictions of social reproduction. What this means is that struggles for emancipatory transformation should not simply ignore the state as envisioned by evolutionary interstitial strategies, not can they realistically smash the state, as envisioned by ruptural strategies. Social emancipation must involve, in one way or another, engaging the state, using it to further the process of emancipatory social empowerment. This is the central idea of symbiotic transformation.” 

“The basic idea of symbiotic transformation is that advances in bottom-up social empowerment within a capitalist society will be most stable and defendable when such a social empowerment also helps solve certain real problems faced by capitalists and other elites” Wright argues. He refers to the work of Joel Rogers and Wolfgang Streeck: “The democratic left makes progress under capitalism when it improves the material well-being of workers, solves a problem for capitalists that capitalists cannot solve for themselves, and in doing both wins sufficient political cachet to conquest capitalist monopoly on articulating the ‘general interest’.” Forging the conditions, which make such class compromise possible, has been at the centre of the more progressive currents in social democratic politics.

Wright argues that “As a great deal of comparative historical research has indicated, as working-class political power increases, the capitalist state tends to become more redistributive: the social wage increases and thus the reservation wage of workers is higher; taxation and transfer policies reduce income inequality; and in various ways labour power is partially decommodified. All of these policies have negative effects on the material interests of high-income people in general and capitalists in particular.”

However, the control over investment remains probably the most fundamental dimension of “private” ownership of the means of production within capitalism. So even as working-class power increases, this power of capital is not seriously eroded. At a certain “theoretical maximum”, however, the right of capitalists to control the allocation of capital is called into question, and this is the heart of the definition of democratic socialism: popular, democratic control over the allocation of capital.

Conclusion: Making Utopias Real

“At the end of the first decade of the twenty-first century, capitalism is once again in a period of serious crisis,” Wright observes. But he thinks capitalism will survive for the foreseeable future. “Suffering and irrationality are never enough to generate fundamental social transformation. So long as a viable alternative to capitalism is not actively on the historical agenda –and with broad popular support linked to a political movement able to translate that support into political power- capitalism will remain the dominant structure of economic organization.”

What are his main conclusions? First, capitalism obstructs the realization of both social justice and political justice. This does not imply all social injustices are attributable to capitalism, nor that the complete elimination of capitalism is a necessary condition for significant advances in social and political justice. But it does imply that the struggle for human emancipation requires a struggle against capitalism, not simply a struggle within capitalism. Second, Economic structures are always hybrids. All actually existing contemporary economic systems are complex configurations of capitalist, statist, and socialist forms. Within such hybrid configurations, to call an economic structure ‘capitalist’ is to identify the dominant form of power within this configuration. This has critical implications for our understanding of the problem of transformation: emancipatory transformation should not be viewed mainly as a binary shift from one system to another, but rather as a shift in the configuration of the power relations that constitute a hybrid.

Third, socialism is also a hybrid. Transcending capitalism in a way that robustly expands the possibilities for realizing radical democratic egalitarian conceptions of social and political justice requires social empowerment over the economy. Fourth, there are multiple pathways of social empowerment. Socialism should not be thought of as a unitary institutional model of how an economy should be organized, but rather as a pluralistic model with many different kinds of institutional pathways for realizing a common underlying principle. Fifth, There are no guarantees: socialism is a terrain for working for social and political justice, not a guarantee for realizing these ideals. The argument for socialism defined as democratic power over the allocation and use of productive resources is not that socialism guarantees social and political justice, but rather that it creates the most favourable socioeconomic terrain on which to struggle for justice. Complex social systems can never conform to the idea that a social system without contradictions and without destructive unintended consequences of individual and collective action is possible. No institutional design can ever be perfectly self-correcting. We can never relax. Sixth, movements towards radical democratic egalitarian ideals of social and political justice will not happen simply as an accidental by-product of unintended social change; it will be brought about by the conscious actions of people acting collectively to bring it about. Seventh, just as there are multiple institutional forms through which social power can be increased, there are multiple strategic logics through which these institutions van be constructed and advanced. And finally, we cannot know in advance how far we can go in the trajectory of social empowerment.

“Once the theory of the demise of capitalism is dropped, it becomes much more pressing to demonstrate that socialism itself is viable” claims Wright. “It could be the case, however, that a radical, democratic egalitarian economic system might not be viable under the conditions of scale and complexity of the contemporary world. (…) But it could certainly be the case that, under future conditions, which we cannot anticipate, those limits will be radically different from what they are today and that dramatic advances in social power would become possible”. (…) “The best way we can do is treat the struggle to move forward on the pathways of social empowerment as an experimental process in which we continually test and retest the limits of possibility and try, as best we can, to create new institutions which will expand those limits themselves. In doing so we not only envision real utopias, but contribute to making utopias real”.