SUBSCRIBE TO OUR FREE NEWSLETTER
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
5
#000000
#FFFFFF
");background-position:center;background-size:19px 19px;background-repeat:no-repeat;background-color:var(--button-bg-color);padding:0;width:var(--form-elem-height);height:var(--form-elem-height);font-size:0;}:is(.js-newsletter-wrapper, .newsletter_bar.newsletter-wrapper) .widget__body:has(.response:not(:empty)) :is(.widget__headline, .widget__subheadline, #mc_embed_signup .mc-field-group, #mc_embed_signup input[type="submit"]){display:none;}:is(.grey_newsblock .newsletter-wrapper, .newsletter-wrapper) #mce-responses:has(.response:not(:empty)){grid-row:1 / -1;grid-column:1 / -1;}.newsletter-wrapper .widget__body > .snark-line:has(.response:not(:empty)){grid-column:1 / -1;}:is(.grey_newsblock .newsletter-wrapper, .newsletter-wrapper) :is(.newsletter-campaign:has(.response:not(:empty)), .newsletter-and-social:has(.response:not(:empty))){width:100%;}.newsletter-wrapper .newsletter_bar_col{display:flex;flex-wrap:wrap;justify-content:center;align-items:center;gap:8px 20px;margin:0 auto;}.newsletter-wrapper .newsletter_bar_col .text-element{display:flex;color:var(--shares-color);margin:0 !important;font-weight:400 !important;font-size:16px !important;}.newsletter-wrapper .newsletter_bar_col .whitebar_social{display:flex;gap:12px;width:auto;}.newsletter-wrapper .newsletter_bar_col a{margin:0;background-color:#0000;padding:0;width:32px;height:32px;}.newsletter-wrapper .social_icon:after{display:none;}.newsletter-wrapper .widget article:before, .newsletter-wrapper .widget article:after{display:none;}#sFollow_Block_0_0_1_0_0_0_1{margin:0;}.donation_banner{position:relative;background:#000;}.donation_banner .posts-custom *, .donation_banner .posts-custom :after, .donation_banner .posts-custom :before{margin:0;}.donation_banner .posts-custom .widget{position:absolute;inset:0;}.donation_banner__wrapper{position:relative;z-index:2;pointer-events:none;}.donation_banner .donate_btn{position:relative;z-index:2;}#sSHARED_-_Support_Block_0_0_7_0_0_3_1_0{color:#fff;}#sSHARED_-_Support_Block_0_0_7_0_0_3_1_1{font-weight:normal;}.grey_newsblock .newsletter-wrapper, .newsletter-wrapper, .newsletter-wrapper.sidebar{background:linear-gradient(91deg, #005dc7 28%, #1d63b2 65%, #0353ae 85%);}
To donate by check, phone, or other method, see our More Ways to Give page.
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
"The biggest problem with regulated capitalism is that it is simply not sustainable in the long run," said the economist.
In the 1990s, all the talk was about the end of socialism and the unchallenged military and economic superiority of the United States. Nonetheless, two decades later, socialism was revived as a possible political alternative as the Great Recession of 2008 and the intensification of neoliberalism’s cruelties tore a huge hole in people’s faith in capitalism, especially among young people in the United States whose hearts had been captured by Sen. Bernie Sanders’ fiery calls for universal healthcare, free public college, and economic and climate justice. Socialism remains a political alternative taken seriously by many across the United States although its vision is still far away from becoming a hegemonic political project.
However, there are different kinds of socialism, and some of them, such as social democracy and market socialism, seek reform rather than the actual replacement of capitalism. On the other hand, the Soviet model, which is the only version of socialism that gave birth to an alternative socioeconomic system to that of capitalism, had many undesirable features and proved unsustainable.
So what would be the ideal system of socialism in the 21st century? In the interview that follows, radical economist David Kotz dissects the lessons drawn from the experience of the Soviet model, explains why reforming capitalism does not solve the problems built into the system of capitalism, and makes a case in defense of democratic socialism as the only sustainable alternative to capitalism. David Kotz is the author of The Rise and Fall of Neoliberal Capitalism and of the soon-to-be-published book Socialism for Today: Escaping the Cruelties of Capitalism. He is professor emeritus of economics and senior research fellow at the Political Economy Research Institute (PERI) at the University of Massachusetts Amherst. From 2010-19, Kotz also served as distinguished professor of economics and co-director of the department of political economy at the Shanghai University of Finance and Economics.
C.J. Polychroniou: David, in a soon-to-be-published book titled Socialism for Today, you make the case that democratic socialism is the only alternative to the long list of severe problems (massive social inequalities and economic disparities, environmental degradation, racism, poverty, homelessness, and so on) that plague the United States under capitalism. Now, you acknowledge that a shift to a radically different economic system would be a difficult and costly process but also maintain that the problems mentioned above cannot be solved by reforming capitalism. What do you understand by the term “reform of capitalism,” and do you think all struggles to reform capitalism have ultimately failed?
David Kotz: By reform of capitalism, we generally mean the introduction of institutions and policies that modify the way the system works but without replacing its core features—private ownership of the means of production, the wage-labor relation, and the pursuit of profit by the capitalist class as the basic logic of the system. Since the end of World War II, we have seen two types of reform of capitalism. First, the type of reform that emerged in the industrialized countries after the Second World War and came to be called regulated capitalism or social democratic capitalism and, second, the unrestrained version of capitalism that emerged in the 1980s and has been nothing short of a disaster.
Social democratic capitalism included a more active role for government in the economy, a major role for unions in the capital-labor relation, and changes in the way corporations conduct their businesses. Reforming capitalism along a social democratic line was a process that had started before World War II, thanks to the rise of working-class politics and the fact that socialist parties, in some cases, rose to power. But big business and its political representatives also went along out of fear that capitalism might not survive the political pressures from below without reforms. Sweden led the way to social democratic capitalism in the 1930s, but reform capitalism also spread to other parts of Western Europe after the end of the Second World War. In the United States, reform capitalism took place with Roosevelt’s New Deal policies on account of the Great Depression and had many common features with European social democracy.
"Full equality is antithetical to the logic and functioning of capitalism. A capitalist economy cannot work without exploiting workers."
Regulated capitalism in the United States produced many benefits for working people. Starting in the early 1950s, labor productivity went up, wages increased, and income inequality remained relatively stable. By the late 1960s, regulated capitalism also led to major improvements in air and water quality and in occupational safety and health. Those regulations were passed under pressure from a broad coalition of environmental activists, consumer product safety activists, and labor unions. People of color also advanced in economic opportunities. Nonetheless, while regulated capitalism created favorable conditions for making progress toward social, economic, and racial equality, full equality remained a chimera. The empirical evidence suggests that racial/ethnic equality and gender equality can be reduced through political and economic struggle but cannot be eliminated. Full equality is antithetical to the logic and functioning of capitalism. A capitalist economy cannot work without exploiting workers. The improvements made by regulated capitalism were indeed limited and did not resolve all the problems generated by capitalism. Unions had to make major concessions to secure agreements for the reforms from the powerful business interests. The official poverty rate declined over the period of the duration of regulated capitalism, but deep pockets of poverty remained in many parts of the country. The imperialist drive of capitalism also was not tamed in postwar regulated capitalism, and capitalist democracies remained only partially democratic as wealthy individuals and large corporations remained politically powerful.
The biggest problem with regulated capitalism is that it is simply not sustainable in the long run. Why? Because it generates a powerful drive on the part of capitalists to resist restriction in the pursuit of the maximization of profit, which is what capitalism is all about. Capitalism has always faced periodic economic crises. When such crises occur, capitalists will grab the opportunity to overthrow regulated capitalism. This is what happened in the 1970s, and regulated capitalism gave way to a decade of accelerating inflation and a severe business cycle. The neoliberal reforms of capitalism in the early 1980s were born out of the inability of regulated capitalism to persist and bring long-term stability.
C.J. Polychroniou: OK, but since the aim seems to be full equality and the absence of exploitation from human affairs, the argument can also be rather easily made that 20th-century efforts to build a full-fledged socialist alternative to capitalism also failed. Isn’t that so?
David Kotz: There were two types of post-capitalist systems that emerged from efforts to move beyond capitalism. One was the Soviet model that emerged after the Bolshevik revolution in 1917. The second was market socialism that surfaced following the collapse of the Soviet model. Neither type succeeded in building a sustainable alternative system. But let me focus on the first type since it did abolish capitalism and build an alternative system. The Soviet model, which spread to many other countries around the world, though with some variations, relied initially on an institution called “soviets,” elected by workers, peasants, soldiers, and sailors. It was supposed to be the supreme authority in the new social and political order. But soon after the revolution, the Bolshevik party established a repressive regime that did not tolerate dissent. After Lenin’s death in 1924, Joseph Stalin became the top leader of the Soviet Union. He established a brutal dictatorship that went on to eliminate much of the leadership that had made the revolution.
Under the Soviet model, all enterprises were owned by the state and allocation decisions were made by a highly centralized and hierarchical form of economic planning. Five-year and one-year plans were formulated for the entire country. Enterprises were given target outputs and provided with the inputs and labor time needed to produce them. Enterprise decision-makers did not aim for maximum profit. There were markets in the Soviet model in the sense that people bought consumer goods in stores and workers decided on jobs in the labor market. However, buying and selling in the Soviet economy did not generate “market forces.” Market forces refers to a system in which relative profitability determines which products will get additional inputs and which will be cut back. Thus, market exchange took place, but the system was not guided by market forces.
Centralized economic planning transformed the Soviet economy from a backward agricultural economy to an industrialized economy in record time. In just a couple of decades, an industrial base was built that allowed the Soviet Union to produce military hardware that was key to the defeat of Nazi Germany. Between the 1950-70s, the Soviet economy was growing so fast that Western analysts were afraid that it would soon surpass the leading capitalist economies. The Soviet model transformed the lives of the Soviet people for the better in many measurable ways. Between 1950 and 1975, consumption per person in the Soviet Union grew faster than in the U.S. By the 1980s, Soviet production surpassed that of the U.S. in steel, cement, metal-cutting and metal-forming machines, wheat, milk, and cotton. It had more doctors and hospital beds per capita than the United States. There was continuous full employment, stable prices, and no ups and downs of the business cycle, while income was relatively equally distributed.
However, the system had serious economic problems. Many sectors of the economy were inefficient, many consumer goods were of low quality, and many consumer services were simply unavailable. Households often faced shortages of consumer goods.
C.J. Polychroniou: In thinking then about a sustainable alternative system to capitalism, what do we keep from the experience of the Soviet model?
David Kotz: As I sought to indicate earlier, the Soviet model brought significant economic and social progress for some 60 years. In my view, the problems of the Soviet model stemmed from its authoritarian and repressive political institutions and the highly centralized form of economic planning that was adopted. But while the Soviet model lacked popular democracy, it did include the key institutions that socialists have long supported: production for use rather than profit, public ownership of enterprises, and a planned economy. The entire experience of the Soviet model holds useful and important lessons for a future socialism.
C.J. Polychroniou: What about market socialism? What lessons should we draw from that experience?
David Kotz: The idea of combining market allocation with socialist planning has a long history. New models of market socialism were proposed following the collapse of the Soviet model in 1991. The hope was that markets would guarantee economic efficiency while a socialist state assured economic justice and material security. Market socialism did not emerge in Russia after the collapse of state socialism, but it did emerge in China after 1978 under the post-Mao leadership of Deng Xiaoping. In China, market forces were introduced gradually and with a high degree of state oversight to avoid economic chaos. The record shows that market socialism not only reproduced many of the problems of capitalism but has a tendency to promote a return to capitalism. That’s because market forces can do their job of allocating resources only by activating the profit motive as the primary force of productive activity.
C.J. Polychroniou: In your book, you argue that economic planning is the institution that can achieve the aim of creating just and sustainable societies—not market forces. But you also argue that an “effective and sustainable socialism” requires direct participatory planning and new forms of public ownership of the means of production. Can you briefly lay out the basic features of democratic socialism?
David Kotz: Here I can respond only briefly to this question, which I consider in detail in my forthcoming book. My view follows closely the model of socialism in Pat Devine’s book Democracy and Economic Planning. The following are some of the key features of a future democratic socialism in my view:
Democratic socialism will inevitably face a contradiction between wide participation in decision-making and the need to make allocation decisions in a timely manner, allocation decisions that are inter-dependent in an actual economy. It will not be perfect, but it promises the best possible future for the human species.
Because the desire of right-wing billionaires not to pay taxes have prevailed ever since Truman first proposed single-payer healthcare, Americans spend significantly more on healthcare than other developed countries.
The recent assassination of the CEO of UnitedHealthcare—the health insurance company with, reportedly, the highest rate of claims rejections (and thus dead, wounded, and furious customers and their relations)—gives us a perfect window to understand the stupidity and danger of the Musk/Trump/Ramaswamy strategy of “cutting government” to “make it more efficient, run it like a corporation.”
Consider healthcare, which in almost every other developed country in the world is legally part of the commons—the infrastructure of the nation, like our roads, public schools, parks, police, military, libraries, and fire departments—owned by the people collectively and run for the sole purpose of meeting a basic human need.
The entire idea of government—dating all the way back to Gilgamesh and before—is to fulfill that singular purpose of meeting citizens’ needs and keeping the nation strong and healthy. That’s a very different mandate from that of a corporation, which is solely directed (some argue by law) to generate profits.
If UnitedHealthcare’s main goal was to keep people healthy, they wouldn’t be rejecting 32% of claims presented to them.
The Veterans’ Administration healthcare system, for example, is essentially socialist rather than capitalist. The VA owns the land and buildings, pays the salaries of everybody from the surgeons to the janitors, and makes most all decisions about care. Its primary purpose—just like that of the healthcare systems of every other democracy in the world—is to keep and make veterans healthy. Its operation is nearly identical to that of Britain’s beloved socialist National Health Service.
UnitedHealthcare similarly owns its own land and buildings, and its officers and employees behave in a way that’s aligned with the company’s primary purpose, but that purpose is to make a profit. Sure, it writes checks for healthcare that’s then delivered to people, but that’s just the way UnitedHealthcare makes money; writing checks and, most importantly, refusing to write checks.
Think about it. If UnitedHealthcare’s main goal was to keep people healthy, they wouldn’t be rejecting 32% of claims presented to them. Like the VA, when people needed help they’d make sure they got it.
Instead, they make damn sure their executives get millions of dollars every year (and investors get billions) because making a massive profit ($23 billion last year, and nearly every penny arguably came from saying “no” to somebody’s healthcare needs) is their real business.
On the other hand, if the VA’s goal was to make or save money by “being run efficiently like a company,” they’d be refusing service to a lot more veterans (which it appears is on the horizon).
This is the essential difference between government and business, between meeting human needs (social) and reaching capitalism’s goal (profit).
It’s why its deeply idiotic to say, as Republicans have been doing since the Reagan Revolution, that “government should be run like a business.” That’s nearly as crackbrained a suggestion as saying that fire departments should make a profit (a doltish notion promoted by some Libertarians). Government should be run like a government, and companies should be run like companies.
Given how obvious this is with even a little bit of thought, where did this imbecilic idea that government should run like a business come from?
Turns out, it’s been driven for most of the past century by morbidly rich businessmen (almost entirely men) who don’t want to pay their taxes. As Jeff Tiedrich notes:
The scariest sentence in the English language is: “I’m a billionaire, and I’m here to help.”
Right-wing billionaires who don’t want to pay their fair share of the costs of society set up think tanks, policy centers, and built media operations to promote their idea that the commons are really there for them to plunder under the rubric of privatization and efficiency.
They’ve had considerable success. Slightly more than half of Medicare is now privatized, multiple Republican-controlled states are in the process of privatizing their public school systems, and the billionaire-funded Project 2025 and the incoming Trump administration have big plans for privatizing other essential government services.
The area where their success is most visible, though, is the American healthcare system. Because the desire of right-wing billionaires not to pay taxes have prevailed ever since then-President Harry Truman first proposed single-payer healthcare like most of the rest of the world has, Americans spend significantly more on healthcare than other developed countries.
In 2022, citizens of the United States spent an estimated $12,742 per person on healthcare, the highest among wealthy nations. This is nearly twice the average of $6,850 per person for other wealthy OECD countries.
Over the next decade, it is estimated that America will spend between $55 and $60 trillion on healthcare if nothing changes and we continue to cut giant corporations in for a large slice of our healthcare money.
Hopefully, Thompson’s murder will spark a conversation about the role of government and the commons—and the very real need to end the corrupt privatization of our healthcare system.
On the other hand, Sen. Bernie Sanders’ (I-Vt.) single-payer Medicare For All plan would only cost $32 billion over the next 10 years. And it would cover everybody in America, every man, woman, and child, in every medical aspect including vision, dental, psychological, and hearing.
Currently 25 million Americans have no health insurance whatsoever.
If we keep our current system, the difference between it and the savings from a single-payer system will end up in the pockets, in large part, of massive insurance giants and their executives and investors. And as campaign contributions for bought off Republicans. This isn’t rocket science.
And you’d think that giving all those extra billions to companies like UnitedHealthcare would result in America having great health outcomes. But, no.
Despite insanely higher spending, the U.S. has a lower life expectancy at birth, higher rates of chronic diseases, higher rates of avoidable or treatable deaths, and higher maternal and infant mortality rates than any of our peer nations.
Compared to single-payer nations like Canada, the U.S. also has a higher incidence of chronic health conditions, Americans see doctors less often and have fewer hospital stays, and the U.S. has fewer hospital beds and physicians per person.
No other country in the world allows a predatory for-profit industry like this to exist as a primary way of providing healthcare. Every other advanced democracy considers healthcare a right of citizenship, rather than an opportunity for a handful of industry executives to hoard a fortune, buy Swiss chalets, and fly around on private jets.
This is one of the most widely shared graphics on social media over the past few days in posts having to do with Thompson’s murder…
Sure, there are lots of health insurance companies in other developed countries, but instead of offering basic healthcare (which is provided by the government) mostly wealthy people subscribe to them to pay for premium services like private hospital rooms, international air ambulance services, and cosmetic surgery.
Essentially, UnitedHealthcare’s CEO Brian Thompson made decisions that killed Americans for a living, in exchange for $10 million a year. He and his peers in the industry are probably paid as much as they are because there is an actual shortage of people with business training who are willing to oversee decisions that cause or allow others to die in exchange for millions in annual compensation.
That Americans are well aware of this obscenity explains the gleeful response to his murder that’s spread across social media, including the refusal of online sleuths to participate in finding his killer.
It shouldn’t need be said that vigilantism is no way to respond to toxic individuals and companies that cause Americans to die unnecessarily. Hopefully, Thompson’s murder will spark a conversation about the role of government and the commons—and the very real need to end the corrupt privatization of our healthcare system (including the Medicare Advantage scam) that has harmed so many of us and killed or injured so many of the people we love.
A new book by Mark Satin—Up From Socialism: My 60-Year Search for a Healing New Radical Politics—makes a powerful case that the real answer lies within.
As administrator of the Schumacher Center for a New Economics, I have spent decades trying to usher visionary, regenerative, and decentralist ideas into the American body politic. So have many of my counterparts in organizations across the country. But sometimes I think we’re no closer to making a difference on a national scale now than we were in the 1970s. What is holding us back?
The usual answers are “capitalism” and the two-party system. But the more experience I’ve gained, the more I’ve come to believe that those are just excuses, and the real answer lies elsewhere.
Mark Satin’s new book—Up From Socialism: My 60-Year Search for a Healing New Radical Politics—makes a powerful case that the real answer lies within: We visionary activists have been so internally divided, and so driven by ego and unexamined personal pain, that we’ve never been able to harness the life-giving ideas of people like Jane Jacobs, Ivan Illich, Hazel Henderson, David Korten, Kate Raworth, and E.F. Schumacher himself (all of whom turn up in Satin’s book) to a viable national political organization.
The last page reveals the “moral” of the book: “Only by becoming kind people can we create a kind world.”
Satin’s book reads like a novel, and it is admirably, some may say shockingly, specific. It spends a lot of time on activists’ parental, collegial, and love relationships, not just on their political organizing. And Satin finds all of it wanting. (He is as tough on himself as he is on anyone, which gives the book a feeling of heartache rather than blame. And there is redemption at the end!)
To stick to the political organizing—the first part of the book tries to demonstrate that the New Left of the 60s was an inadequate vehicle for us. Satin shows in devastating detail that the leading members of his Mississippi Student Nonviolent Coordinating Committee group were more interested in Black nationalism than in integrating the local schools. He shows that the older student leaders of his campus Students for a Democratic Society group were more interested in promoting socialism than in listening to the emerging ecological, decentralist, and humanistic-psychology ideas of younger students. And he shows that the leaders of the Toronto Anti-Draft Program (North America’s largest draft-resister assistance organization) were more interested in fomenting a Marxist revolution than in providing practical help to the resisters.
According to Satin, these and similar experiences led to the collapse of the New Left—and to the rise of thousands of independent feminist, ecological, spiritual, appropriate-technology, etc. organizations. In addition, two visionary organizations arose that aimed to synthesize such ideas and bring them into national politics.
The first of these, the New World Alliance, drew its Governing Council from a wide range of professionals, educators, businesspeople, and activists. It included three future Schumacher Society participants, Alanna Hartzok, John McClaughry, and Kirkpatrick Sale. But it fell apart after four years of constant bickering over policies, processes, and fundraising, often caused (Satin seeks to show) largely by personal jealousies and rivalries. At one point, spiritually oriented Planetary Citizens president Donald Keys accused McClaughry of being in league with the Devil! Some of the scenes in this chapter are so tragicomic that they’d work as skits on Saturday Night Live.
The chapter on the U.S. Green Party movement, though, is pure tragedy. By the mid-1980s, America was yearning for a major third party. Amazingly well-connected people were waiting in the wings to help the Greens get off the ground. But, instead, the principal organizers of the Greens—a spiritual feminist, an anarchist, a socialist, and two bioregionalists—created an organization in their own narrow image. As Satin sees it, this was a classic case of the organizers and their cohorts preferring to be big fish in a small pond. The resulting Green “movement” then engaged in phenomenally ugly infighting over the next decade—what happened to three Green women is truly sickening to read—and the Greens emerged in the end not as a major beyond-left-and-right political party capable of spearheading a regenerative economy and culture, but as a minor far-left protest party.
In more recent years, Satin found hope in what he calls the “radical centrist” or “trasnspartisan” movement—people and groups that are more interested in fostering cross-partisan political dialogue than in providing Correct Answers. He felt this would be an excellent way to insert the views of visionary thinkers into the national dialogue—and to win support for all kinds of local and regional experimentation. But he notes that the track record of radical-centrist groups like New America and No Labels has so far been disappointing. They’re as internally divided as the Greens and a lot snootier. What Satin really wants, he confides to us, is a new political movement of committed listeners, bold beyond-left-and-right synthesizers, and savvy organizers.
A powerful conclusion urges visionary activists to live more like ordinary Americans, in order to decrease arrogance and deepen understanding. The last page reveals the “moral” of the book: “Only by becoming kind people can we create a kind world.”
When E.F. Schumacher wrote his famous book Small Is Beautiful, he entitled his chapter about political economy “Buddhist Economics.” Later he must have had second thoughts about characterizing his ideas in such an oppositional way, for his later book, A Guide for the Perplexed, makes it clear that his ideas are consistent with the beliefs of all the great religions, including of course Christianity. When Satin argues that we visionary activists cannot move forward unless we (a). learn to be kind to self and others, and (b). listen to and learn from all engaged Americans, he is following in Schumacher’s footsteps. We should listen to him.
Mark Satin, Up From Socialism: My 60-Year Search for a Healing New Radical Politics (New York: Bombardier Books, distributed by Simon & Schuster, 2023), 380 pages, $21.95 pbk, $12.95 eBook.