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Institute for New Economic Thinking - May 21, 2019

Bhaskar Sunkara, founder of the socialist magazine Jacobin*, has released a new book just in time for the 2020 presidential election season called* The Socialist Manifesto: The Case for Radical Politics in an Era of Extreme Inequality *(Basic Books, 2019). In the book, Sunkara makes the case for why a socialist economy, government, and society is necessary, and what it might look like. He also provides an in-depth historical look at the development of socialist intellectual thought over the past 150 years. Our Economics Editor Aaron Freedman speaks with him about the past, present, and future of socialist economics.

The transcript below has been edited for clarity*

Aaron Freedman: You write that it was the firmly anti-Marxist Keynes, rather than socialists, who actually had the greatest success in challenging traditional economic orthodoxy around debt spending and the business cycle. Should socialists today care about resuscitating Keynes? Or should a socialist macroeconomics come from a different tradition?

Bhaskar Sunkara: Well, I think there’s two things. There’s not just Keynes, but also Swedish economists who helped develop their postwar welfare state. I think that Nordic experience is vital, because that’s the actual experience of trying to govern capitalism in the interest of workers, and using a certain macroeconomic tools to do that. So, obviously, I think we should go with the tools that have already worked, and see how they could be modernized, or how they could work in a more competitive, more international economy. But, yeah, don’t try to just say there’s a magical solution out there, that if only socialists had power, we could make it work.

I think a lot of the failures of socialism in the 20th century was just thinking that all the problems are political. That once you have enough political power, you could impact the system in any way you want. We should reject that. So, in other words, it’s not just taking the state and using its power. You also need a large, independent labor movement backing your program. The impact, for example, of big trade union federations that can impose sectoral bargaining and labor militancy is a missing ingredient in a lot of attempts to resuscitate social democracy by pure electoral means.

Take a country like Australia. It never had a very strong welfare state, but it’s still a relatively egalitarian country, compared to the United States at least. And it was sectoral bargaining that really determined that. It’s definitely not everything, but I think we need to start with actual existing social democracy and what worked. And then try to push it to its limits, beyond that. And that’s very important.

Where do you fall on the role of planning vs. markets in a hypothetical democratic socialist economy?

Some of the primary objections to the old socialism, the command economy, were incentive issues and calculation issues (how could a central planner determine what everyone in the economy wants and be able to produce it without prices?). I think that both continue to be important questions to address. While some people are making arguments now that with increased computing power we could overcome the calculation problem, as far as I could tell that’s not true. But even if you go beyond that, I think socialists don’t want to talk about the incentive problems involved with the planned economies of the Soviet Union and similar states. There you didn’t have real firm failure, and to me that’s actually a big barrier to weeding out inefficacies that come with a serious social cost.

There’s nothing in socialism that suggests we should prefer a fully planned economy. What we want is a system that satisfies our egalitarian kind of desire, which is, to put it simply, to say that we don’t believe in exploitation, and we want to limit hierarchy as much as possible. We think the wage-labor relation is a form of exploitation. And that we want to guarantee the necessities of life as social rights.

So from that socialist starting point, we have to ask whether markets are compatible with our vision. So I fundamentally come down with the market socialist perspective. Influenced by, among others, David Schweickart’s model in Against Capitalism and later in his pop version of that book, After Capitalism. Essentially what I think is that there should be a sphere for consumer goods that’s just like the sphere now, but it’s owned by worker-controlled firms, and these firms don’t have the same kind of impetus towards massive exponential growth because their rational interest is to maximize revenue per worker, not just total revenue. ...
Read full interview at Institute for New Economic Thinking