STRANGE TIMES

This is a rather clunky attempt to present some thoughts on the immediate and longer term programs for a radical party whose aim is to move to a society based on the social ownership of the means of production. The immediate program would have to be relatively limited in its objectives because change takes time and you do not want to bite off more than you can chew.

Grabbing the commanding heights of the economy would be the main job at first. This means nationalizing the large public companies. It has been suggested that the best way to handle this would be to allocate shares in these companies to government owned hedge funds. Hopefully, the well paid managers of these funds together with the nationalized banks would continue to invest as if nothing had happened. Likewise for senior management of enterprises. No doubt it will not work out quite as smoothly as we would like.

At the same time, arrangements will need to be made to ensure that people who previously owned shares in the nationalized companies – particularly the non-rich – continue receiving regular compensation payments.  Foreign investors may or may not be a tricky issue. It would depend on the political circumstances.

Smaller scale business would be left untouched. (I don’t know where you would draw the line.)

While these minimalist arrangements are being put in place, hopefully a lot of stuff is happening among the middle and lower ranks (the “masses”).  Generally they will be busily sticking their noses in where they previously did not belong. In many of the enterprises that are still private there will be calls for socialization. Policies will need to be developed on how and when this occurs.

The radical party both before and during the transition process will need to recruit large numbers of exuberant young individuals keen to acquire all the various skills required to make investment decisions and to run businesses large and small. These people will consider it cool not to receive ridiculously high salaries or a slice of the action. They will also have quirky newfangled ideas about how people should work together.

Arrangements would need to be put in place to ensure that the very best proposals for socialist enterprises get reasonable access to credit. Under capitalism you need financial skin in the game to receive external funds. [OK maybe that is mainly a myth.] Under the new conditions, there would need to be reasonable evidence that those involved had moral skin in the game. (By the way, what distinguishes a socialist enterprise from a capitalist one is that no one benefits from any net revenue.)

While this is going on I do not think there is any reason to prevent individuals from engaging in trade. I am thinking here especially of second hand goods (try closing down eBay!) and individual services. As for small business, it will disappear as people increasingly want to be part of the socialized sector and the latter proves to be more efficient.

I think in most countries constitutional changes would be required to expropriate the big capitalists. A referendum will be the big test of whether there is sufficient political support to move forward.

I rather like the idea of a socialist government being into minimum government. Getting rid of the state is a communist objective. Eliminating depressions and recessions and providing wage subsidies for the least endowed will make unemployment a thing of the past. Welfare can then be confined to the seriously disabled and the chronically ill. Workers will have superannuation and medical insurance. Insurance, education and health care do not have to be run by either government bureaucracies or private enterprises. They can be run by socialist enterprises with little or no government interference.

We definitely need to avoid public housing. In high price locations low wage worker can rent high rise holes in the wall. And with a tight labor market premium on wages will be needed to attract such workers to these areas. The limited number of people entitled to welfare payments will receive incomes sufficient to allow them to live in reasonable if not premium areas.  There will be private home ownership including owner corporations as we have now. What about gated communities? These are understandable but the aim should be to civilize the riffraff rather than insulate ourselves from them – an impossible task anyway. There would also be rental properties built or acquired and maintained by socialist enterprises. What about private landlords? If they are individuals or small operators they would have to be tolerated.

We don’t need government regulation if workers and consumers are on the look out for shifty practices and shoddy products and services.

We should be able to get by with very little legislation. Legislators would meet for a week or so every year. They would be selected from the population at large much like a jury system –  a representative random sample of the population. I think statistical theory tells us that  that would not  be huge number of people.

I am not sure what to say about the executive. I need to get a better understanding of the difference between the role of the executive and legislative arms of government.

Government bureaucracies and socialist enterprises – a distinction without a difference? No. This is where I need to float a decentralized vision of social ownership.  At the heart of it is a gaggle of investment agencies that dispense investment funds to enterprises that rely on a decentralized price system to choose their inputs and outputs. Contrary to the prevailing wisdom the latter is not at odds with social ownership of the means of production (producer or intermediate goods). I will shortly provide a link to a paper I have written on this and related issues.

That’s enough for now.