Friday, December 7, 2007

Does Wall Street Lead to Socialism?

It is fun to push Brad Setser's words to suggest that socialism (not real socialism, but the way the public understands it -- public ownership) may be the ultimate outcome of finance capital.

Brad Setser (December 06, 2007)
http://www.rgemonitor.com/blog/setser/230793
It wasn’t all that long ago that Wall Street -- Citi bankers included -- were scouring the emerging world for state-owned companies that could be sold to private investors in the US and Europe. Now the world’s investment bankers seem to be scouring the US and Europe for private assets that can be sold to government investment funds and state-owned companies in the emerging world.

Privatization is out. Selling private companies – or big chunks of a private company -- to another country’s government (partial renationalization?) is in.

17 comments:

rosserjb@jmu.edu said...

Well, I am not sure what Michael thinks is "real sociasism," but, I personally in this matter defer to Marx in these matters. For him, state ownership of the means of production of was the bottom line definition of "socialism," and I have personally found that to be a very useful defintition, despite the complications arising from the Nordic social democracies where one finds very little state ownership of the means of production, with very little command central planning (identied by Hayek in his 'Road to Serfdom' as 'socialism,'). So, obviously there are these alternarive forms that call themselves "socialist," that are this because of their high levels of income redistribution and interventionist management to increase employment by a variety of both micro and macro efforts. I do not know ultimately what we should label these systems, but they look to me like they way we should be going globally, more or lessl

Barkley

Myrtle Blackwood said...

If socialism is defined as the 'state ownership of the means of production' then that appears to be precisely what we have now.

For it to be otherwise it would be necessary to identify the separation of corporations and governments. I don't think this is possible.

Big business and government are largely staffed by the same people. This is especially and obviously so in the financial and legal sectors.

I believe we do have now a form of 'global socialism'. The tragedy is that it is designed to concentrate the greatest benefits to the rich and powerful rather than to ordinary people.

A 'production for profit' socialism . 'Profit' for whom?

Michael Perelman said...

Of course, investment by China or Abu Dhabi is not socialism, but it is what many ignorant people regard as socialism. I just thought that the idea of fiannce capital leading to more state investment was humorous.

Myrtle Blackwood said...

Michael P, count me in as one of those people ignorant of what 'socialism' is.

I've asked so-called 'Marxists' and others what their definition is and without success.

There seems to be a satisfaction with the mere discussion of 'socialist' issues without the seeming need to get to the specifics of what to aspire to.

Personally I would like to see millions of different aspirations and the freedom to pursue them within an ethical and (truly) susainable environmental framework.

Michael Perelman said...

Socialism, at least for me, would be a way of organizing life so that people would be in control of the means of production and could act creatively in the common interest.

Peter Dorman said...

Suddenly a discussion of "what is socialism" breaks out. My interpretation: socialism entails a high degree of social control over economic decision-making.

High degree: there is a spectrum from no social control to maximal. Socialism is a matter of degree.

Social control: a process of deliberation and decision vested in the relevant public. What public is relevant depends on what aspect or component of the economy is involved. Consumer sovereignty (via markets) may be a vehicle for social control in the context of determining the qualities of consumer goods (like shoe styles and sizes). A works council may be social control in the context of a production community. "Stakeholder" systems that transfer decision-making authority in firms away from shareholders alone increase social control at the level of the firm. Public regulation and planning can do this at a broader level, provided the process is accessible and democratic.

It is an open question whether state ownership serves socialism in this sense -- it depends on how conducive state vs private ownership is to creating instruments of public deliberation and control. I don't think there's any general answer.

Robert D Feinman said...

I tried to unscramble the terms the other day. The division I used was having one dimension as to who owns the means of production: capitalism/socialism

The other dimension was about governance: democracy/authoritarianism

The confusion arises because those who disfavored state ownership conflated it with regimes (like the USSR) which were authoritarian. And Socialism or Communism became synonyms for "bad guys" just like we are seeing these days with Islamic "fundamentalists" or Islamofacists.

One can have relatively free ownership of capital in a dictatorship (Singapore) or relatively tight control over capital in a democracy (Scandinavia).

Anyway, if you are interested here's my blog entry (along with many interesting comments):

Capitalsim and Democracy

Sandwichman said...

I think we do indeed have "socialism" already, as Brenda Rosser suggests. It's not the kind of socialism that people who consider themselves socialists would wish for but that's beside the point.

It is, rather, a "dream socialism" in which all the elements of a genuine socialism are already anticipated but they are not connected in a conscious way. Even the most strident propagandist for the "free market" is merely parroting a centuries-old utopian blueprint for universal peace, prosperity and happiness.

Anonymous said...

It's certainly true, as Brenda Rosser says, that big business and government (in many countries) are largely staffed by the same people, but when government controls big business we call it "socialism" and when big business controls government we call it "fascism". My view is that we have fascism in the U.S. and socialism in Sweden, but then I don't live in Sweden.

Michael Perelman said...

I saw data back in the 70s that the degree of public ownership was higher in the US than in Sweden.

Anonymous said...

if socialism is taken to be state ownership of the means of production, fine, but then this cannot be addressed without consideration of 'who owns the state', or what did Marx mean by saying a society of free and associated producers...

"Freedom consists in converting the state from an organ superimposed upon society into one completely subordinate to it..."

Which is not some liberalizing of the 'presntly existing state' but its complete transformation and a transforming that eliminates such notions as 'state ownership' as presently understood and have been labeled and presented as "socialism".

The state is to be socialized, to become the 'associated producers', whose free associationis the state. Who would expect the dominant class to perform this? Who would expect that class to consciously overthrow (not simply reform) itself? Who would expect such process of combined ending/beginning to be linear and smooth or the same everywhere? Marx did not, anymore than he was advancing a bourgeois concept of 'ownership', which itself is ended.

S-man is correct, we already have a world social formation but, stuck in all the old garbage, remain unconscious of the really possible within that big dumpster.

Anonymous said...

'Does Wall Street lead to Socialism?'

Or, does Wall Street assist in the ending of capitalism?

I don't know but by assisting in the further concentration of financial wealth in the hands of the upper 1% and next 9% while concentrating debt in the bottom 90%*, it may present opportunities.

* Wolff (2004)

Anonymous said...

The socialized state has to become more than associated producers Juan. That's just one aspect of being an emancipated human.

Myrtle Blackwood said...

Michael Perelman said...
"I saw data back in the 70s that the degree of public ownership was higher in the US than in Sweden."

It's an important question. Where are current figures? According to Ferdinand Lundberg's study on 'The Rich & the Super Rich' 1969:

Britain
..the most comprehensive estimate, drawn up by Mr Jack Revell of the Cambridge Department of Applied Economics, suggests that in 1960 the richest 1 per cent of the British population held 42% of the country's durable wealth. [The top 10% had 99% of personal income before tax...the top 5% in 1959 has 75% of property but received 92% of property income.]

"...some 50 million inhabitants of the British Isles own the equivalent of around 250 pounds apiece. And that is an average - the great majority own virtually nothing but the clothes they stand up in, and a few bits of furniture and kitchen equipment on which they are heavily in debt to the HP companies."

The rich in Britain at the time are from the same classes as the rich in the US and Australia at present -

(i) the old landowing families;
(ii) the inheritors and major improvers of major industrial empires;
(iii) the builders of first-generation businesses starting from nothing [a very minor group];
(iv) the great mass of well-off children, grandchildren, cousins, aunts holding shares and the slices of family trusts which eventuate from the commercial activities of their relations and forebears.

On page 12 a summation of Professor James Meade's book 'Efficiency, Equality and the Ownership of Property' is given:

"..he is arguing that in an advanced industrial society the rising stock of capital and technical innovation will steadily raise output per worker. But the main factor determining real wages is not average production per head, but marginal production - the amount you get by employing one extra man. And if this marginal addition is low, as it will be when average output is already very high, then wages paid will no longer from a large proportion of total output, or of total income. They will shrink, and the remainder, which goes effectively to property owners in the form of profits or rent, will rise. And this where the continued sharp inequality in the ownership of wealth assumes its real force....the system will tilt further and further in the direction of the wealthy minority."

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Anonymous said...

"For [Marx], state ownership of the means of production of was the bottom line definition of "socialism,"

That would not have been a position which Proudhon, Bakunin, Kropotkin or numerous other (libertarian) socialists would have agreed with. Instead, they called that State capitalism -- i.e., the situation where the state owns the means of production and the workers sell their liberty/labour to one big boss, the state.

Instead, they advocated the socialisation of the means of production. That is, workplaces run by their workers and federated together to co-operate on a wider scale.

As for Marx, sometimes he indicated support for such a post-capitalist system (for example, in his discussion of the Proudhon influenced Paris Commune). Sometimes he stressed state ownership.

So, as far as socialism goes, it depends which branch of the socialist movement you mean. The state socialists would concur, the anti-state socialists (or anarchists) would disagree totally.

Given the history of various nationalisations, we anarchists feel our critique has been proven right time and time again.

This is discussed in depth in "An Anarchist FAQ", particularly section H which is on the anarchist critique of Marxism.

Iain
An Anarchist FAQ

Anonymous said...

Yes Dale but I was trying to bring out what's often missed or forgotten, that the state must, relative to modern conceptions, become a not-state, which would hardly fit the old USSR-Russia or anywhere else, and could not take place other than through social action which includes the building of all those other aspects. Beliefs in/notions of individualistic emancipation seem to me odd, even reactionary.