Mixed economy – socialist elements in modern capitalist economies
I wrote a few days ago that socialism is founded on a critique of capitalism, the point being that people can agree on the critique without agreeing on the alternative – which complicates the answer to the question “what are socialists for?”
For present purposes I need to say more about what the content of the critique, and it is hard to put a complex idea into a few words that all would concur in. Here is my best try:
“Capitalism creates inequality that is in itself excessive and unjustified, and that is destructive of other values as well, including freedom, stability, social peace, and the development of good human character.”
Among early socialists, some (British Ricardian socialists) saw capitalist inequality as unjustified by reference to the Labor Theory of Value, which had been perfected by the British financier David Ricardo. Their contemporaries in France proposed a standard by which economic inequality should be judged: “From each according to ability, to each according to need.” This slogan was used by the early French democratic socialist Louis Blanc, before Marx was a socialist, and Marx was actually was negative about it. He mentioned it in a book called “Critique of the Gotha Program,” and “from each according to ability, to each according to need” was one of the things in the democratic socialist Gotha Program he criticized. In short, “from each according to ability, to each according to need” is a very old democratic socialist value.
Of course, “from each according to ability, to each according to need” is an ideal, and ideals can only be approximated in reality. From that point of view, social security, universal health care, and universal free education are all socialist, as instances of distribution according to need. The first part, “from each according to ability” is harder, since needs are more systematic and knowable than abilities (at least some needs) but taxation that is progressive and falls especially on “unearned” income or wealth, such as inheritances, is a move toward “from each according to ability.”
Keynesian stabilization of the economy and policies to preserve the environment are not particularly socialist policies, from this point of view, though they are attempts to repair the destruction of other values that arises from capitalism. But they are steps that any rational and efficient capitalism would accomplish. This does raise the question why rational and efficient capitalism is so uncommon.
One other socialist element in our political economy needs to be mentioned. It is democracy. In the time of Louis Blanc and Karl Marx, parliamentary systems in capitalist countries limited the voting franchise by property tests, which essentially denied the vote to the working class. Suffrage was eventually extended to adult males in response to pressure from the working class. In Europe, at least, this pressure came through democratic socialist and Marxist (social-democratic) parties. Female suffrage followed, and expressed the idea that the franchise should not be limited to people who benefit from special privilege, whether economic privilege or gender privilege.