A Reluctant Democratic Socialist

I read your analysis with interest, in response to the link you provided me on my comment about consumption and production. I am actually quite aligned with Alexei Stell though as I think socialism is very much worth exploring in 2020.

But as I wrote in my title I am a reluctant democratic socialist. As you probably noticed in the story I wrote that you commented on I coax my analysis of economics very much in the language of how more liberal economists would do, as that is kind of my background. By thoughts on economics and society has been strongly shaped by people like Paul Krugman, Joseph Stiglitz, Thomas Piketty, the Freakconomics authors, Tim Harford etc.

I definitely think there is a a certain beauty and elegance to free market economics in how it distributes scarce resources efficiently (when it works). However as I think we can both agree there are many ways in which it has failed in many western societies today.

Where we part ways I believe is that I see a much broader and fundamental problem with capitalism itself. And this really only became clear to me as I got increasingly interested in space colonization and environmentalism. That kind of stuff makes you think a lot more about resource usage and size of sustainable populations and consumption.

If you analyze say a Moon or Mars colony it becomes quickly apparent that a capitalist system simply would not work. Capitalism is a system based on endless growth in consumption. In an environment with limited resources growth needs to be strictly managed and planned. If we look at our own Earth as a very large space colony, it becomes apparent that capitalism is a doomed system. It offers no way to manage growth and consumption so that we can stay within the limits of nature.

For a long time I was an optimist and thought this was totally possible. I was sold on the idea of pushing strong environmental standards, recycle more etc. But it has become apparent this is a failed strategy. E.g. this paper in Nature about Affluence talks about the fundamental problem:

Even though we produce goods ever more efficiently, using less resources and energy while at the same time recycling more, our total environmental footprint is still growing, because growth in consumption is always outstripping out improvement in production.

I think this was well illustrated with a clothing chain. I think it was H&M. They try to sell themselves as good with recycling. You can deliver in old clothes, so they can be recycled and get a price cut for buying new clothes. This is what you see with all companies. Being green has just become a way of selling more. Companies like H&M has to show shareholders that sales and profits are growing. The only way to do that is to get consumers to buy more.

If we manage to produce all the products we now make with half the resources. Then that will simply double people’s income and quickly lead to a doubling of consumption. We are thus back at square one.

To solve this problem you need some form of managed growth. You need a system where products are made to last. That they can more easily be repaired. Where companies are not icentivized to push you to buy ever more. A system where the focus is on actually satisfying the needs of the citizens rather than the needs of companies for ever higher profit.

Capitalism in the rich world is no longer about making stuff consumers need, but about making us desire the products they make regardless of whether we need them or not. Most demand today is simply artificially induced. And companies have no other choice but to play that game. That is how the system works. That is the nature of capitalism.

I don’t know exactly what this new system should look like, but I am positive towards exploring democratic socialism as a means of doing it, because it is not based on the idea of infinite consumption but about satisfying the needs of all humans.

I think it would be wrong to dismiss socialism on the ground of say something like the USSR or assume that modern socialism means everything about capitalism and markets is rejected.

That is why I wrote this article about Modern Socialism in Scandinavia in 2020. Socialism is no more static than capitalism. Just as you propose to fix bad capitalism, socialists have long ago realized that they had to fix their ideology. That they made many mistakes.

We have been through this in Scandinavia for years having had large powerful socialist inspired parties in government for many years which have done many good things but also some failed things. Modern socialists have learned several important lessons:

  1. You can never trade democracy for socialism. Democracy must come first. The USSR, China, North Korea etc show that folly. Most Scandinavian communists have to my knowledge abandoned the idea of armed revolution and a dicatorship of the proletariat decades ago.
  2. Markets are actually pretty good at a number of things. Everything cannot be planned economics. And abandoning money doesn’t really work either.

In short modern socialists see a role for capitalism and free market economics. So what is the difference then between capitalism and modern socialism? It is easy to apply the one drop rule and say anywhere, where some capitalism is happening is capitalism.

But I think the key distinguishing factor is what the primary overreaching goal of society is. Rather than being in the driver seat, capitalism would be at the margins in a socialist society. Key industries would be far more influenced by democratic decisions than merely by market considerations.

I don’t know if it would work, but I think one can do as Social Democrats in Nordic countries have already done for years: Experiment. Do reforms. Try out things. If if fails. Roll it back.

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