David Schweickart

Since first published in 2002, After Capitalism has offered students and political activists alike a coherent vision of a viable and desirable alternative to capitalism. David Schweickart calls this system Economic Democracy, a successor-system to capitalism which preserves the efficiency strengths of a market economy while extending democracy to the workplace and to the structures of investment finance. In the second edition, Schweickart recognizes that increased globalization of companies has created greater than ever interdependent economies and the debate about the desirability of entrepreneurship is escalating. The new edition includes a new preface, completely updated data, reorganized chapters, and new sections on the economic instability of capitalism, the current economic crisis, and China. Drawing on both theoretical and empirical research, Schweickart shows how and why this model is efficient, dynamic, and applicable in the world today.

“Economic Democracy: A Worthy Socialism that Would Really Work” laid out a model that was to form the basis of my book Against Capitalism, published by Cambridge University Press in 1993. The article, like the book itself, was a theoretical response to the triumphalism of the TINA crowd that followed the collapse of Soviet Union and the rejection of socialism by its satellite states in Eastern Europe. “A Worthy Socialism” was intended to demonstrate rigorously that there is an alternative, at least in theory: an economically viable form of socialism that would be more democratic than capitalism and at least as efficient. Against Capitalism made the same point, but extended the argument further. Economic Democracy would be not only as efficient as capitalism and more democratic, but also more rational in its growth, more stable, more egalitarian, less prone to high unemployment, more ecologically friendly. I was sick of hearing even progressives say that “we are going to have to stop using the term ‘capitalist economy’ as if we knew what a functioning non-capitalist economy would look like.”

Capitalism causes staggering inequality, rising unemployment, growing poverty, and the degradation of democracy. But is there any viable alternative? Is there a form of socialism that would preserve the strengths of competitive capitalism, yet mitigate its worst evils? This paper argues that there is such an alternative -- economic democracy. An economic democracy keeps competitive markets for goods and services, but dispenses with labor markets and capital markets. It replaces labor markets with worker ownership, and capital markets with democratic control of investment. These mechanisms will preserve the principal advantages of capitalism, while mitigating its worst evils.

In a recent article Robert Paul Wolff has argued that Marx's theory of capitalist exploitation is incorrect, in that its ground is the premiss that labor is the source of all value.1 This, of course, is a well-rehearsed objection to Marx, but Wolff gives it a novel twist. He notes that the defense of this premise in the opening pages of Capital is inadequate, but he is not troubled by this ‘bad argument,’ for he sees Marx's real argument as something else: the claim that unless labor is the source of all value, an adequate account of profit is impossible. In other words Marx is seen to be making a transcendental argument: an inquiry into the conditions for the possibility of profit. Wolff proceeds to argue that Marx goes astray here, but not so far astray that a valid transcendental argument, faithful to Marx's essential insight, cannot be charted.

I T I S S T A R T L I N G T O realize that the concept of economic exploitation, which has been the focus of intense philosophical debate for what seems like decades now, was barely touched on in John Rawls's 1971 masterwork, A Theory o f Justice, the book that ushered in the present era of Anglo - American social and political philosophy. The subject was broached just once by Rawls, and only to be dismissed as being of such secondary importance as to be "out of place here."1 The concept, however, had begun to attract the attention of a generation of students and young faculty who were rediscovering Marx, to the point that it could not much longer be ignored, not even in Harvard Yard. Robert Nozick, in his famous juniorcolleague, neoconservative rebuttal to the liberal Rawls, devoted a full nine pages to attacking "Marxian exploitation," concluding that "Marxian exploitation is the exploitation of people's lack of understanding of economics.".

This paper argues that Marx’s critique of capitalism is not, as commonly believed, a critique of the “free market.” I argue that the “market” under capitalism should be understood as a three-fold market—for goods and services, for labor and for capital. I argue that Marx’s critique is essentially a critique of the latter two markets, and not the first. Hence theoretical space opens up for “market socialism.” I proceed to elaborate briefly what specific institutions might comprise an economically viable socialism that would not be vulnerable to Marx’s critique.

When the relative importance of the national exploitation from which a working class suffers through belonging to the proletariat diminishes continually as compared with that from which it benefits through belonging to a privileged nation, a moment comes when the aim of increasing the national income in absolute terms prevails over that of the relative share of one part of the nation over the other. From that point onward the principle of national solidarity ceases to be challenged in principle, however violent and radical the struggle over the sharing of the cake may be. Thereafter a de facto united front of the workers and capitalists of the well-to-do countries, directed against the poor nations, coexists with an internal trade-union struggle over the sharing of the loot.

There is no more intriguing or provocative argument in the Marxian corpus; it is the theoretical and rhetorical heart of Capital; not surprisingly, it is the locus of endless controversy: capitalist profit is possible, Marx argues, only because the capitalist is able to find on the market a unique commodity that possesses ‘the specific use-value... of being a source not only of value, but of more value than it has itself.’ This commodity is labor power, the capacity to work, which, Marx insists, must be sharply distinguished from the activity of laboring, since it is precisely this distinction that lays bare capitalism’s essence, revealing it to be —exploitation.

David Ramsay Steele's From Marx to Mises argues correctly that the standard account of the economic calculation debate is a misrepresentation. Mises and Hayek were not bested by Lange and Taylor. However, it is not true, as Steele claims, that socialists have yet to face the Misesian challenge, nor that the debate over socialist calculation sheds much light on the recent collapse of communism. Steele's critiques of market socialism and worker self‐management and his treatment of Marx are, moreover, deficient, as a consequence of his “Libertarian Panglossism.” Tout est an mieux... dans ce meilleur des mondes possibles.