Market socialism
The aim of such proposals was to eliminate exploitation by allowing individuals to receive the full product of their labor, while removing the market-distorting effects of concentrating ownership and wealth in the hands of a small class of private property owners.
[13] The key theoretical basis for market socialism is the negation of the underlying expropriation of surplus value present in other modes of production.
These models of socialism entailed perfecting or improving the market mechanism and free price system by removing distortions caused by exploitation, private property and alienated labor.
[17][20] Mill also promoted substituting capitalist businesses with worker cooperatives, writing: The form of association, however, which if mankind continue to improve, must be expected in the end to predominate, is not that which can exist between a capitalist as chief, and work-people without a voice in the management, but the association of the labourers themselves on terms of equality, collectively owning the capital with which they carry on their operations and working under managers elected and removable by themselves.
[21]Pierre-Joseph Proudhon developed a theoretical system called mutualism which attacks the legitimacy of existing property rights, subsidies, corporations, banking and rent.
The store proved successful and operated for three years after which it was closed so that Warren could pursue establishing colonies based on mutualism.
[32][33][34][35] Beginning in the early 20th century, neoclassical economic theory provided the theoretical basis for more comprehensive models of market socialism.
Early neoclassical models of socialism included a role for a central planning board (CPB) in setting prices equal to marginal cost in order to achieve Pareto efficiency.
The earliest models of neoclassical socialism were developed by Léon Walras, Enrico Barone (1908)[36][37][38] and Oskar R. Lange (c.
Dickinson proposed a mathematical solution whereby the problems of a socialist economy could be solved by a central planning agency.
Economists active in the former Yugoslavia, including Czech-born Jaroslav Vaněk and Croat-born Branko Horvat, promoted a model of market socialism dubbed the Illyrian model, where firms were socially owned by their employees and structured around workers' self-management, competing with each other in open and free markets.
The Bardhan and Roemer model satisfied the main requirements of both socialism (workers own all the factors of production, not just labour) and market economies (prices determine efficient allocation of resources).
New Zealand economist Steven O'Donnell expanded on the Bardhan and Roemer model and decomposed the capital function in a general equilibrium system to take account of entrepreneurial activity in market socialist economies.
How they would interact with one another and with consumers was left open to democratic social decisions and could entail markets or planning, or likely mixtures of both.
Instead, he contends that the class differences and inequalities in income and power that result from private ownership enable the interests of the dominant class to skew the market to their favor, either in the form of monopoly and market power, or by utilizing their wealth and resources to legislate government policies that benefit their specific business interests.
[49][50] Bruenig claims that this form of market socialism is similar to that advocated by Yanis Varoufakis, Rudolf Meidner, and John Roemer.
The economy of Yugoslavia was widely considered to have been a form of market-based socialism, based on socially-owned cooperatives, workers' self-management, and market allocation of capital.
[53] Some of the economic reforms introduced during the Prague Spring by Alexander Dubček, the leader of Czechoslovakia, included elements of market socialism.
It has an extremely high prevalence of cooperatives, especially in agriculture and retail, with the continued state ownership of the commanding heights of the economy.
The Soviet Union attempted to introduce a market system with its perestroika reforms under Mikhail Gorbachev.
Historically, these kinds of market socialist systems attempt to retain state ownership of the commanding heights of the economy such as heavy industry, energy and infrastructure while introducing decentralised decision making and giving local managers more freedom to make decisions and respond to market demands.
This model includes a significant amount of privately owned firms that operate as a business for profit, but only for consumer goods and services.
[67] In comparison with the Soviet-type planned economy, the Chinese socialist market model is based on the corporatization of state institutions, transforming them into joint-stock companies.
[68] These state-owned corporations have been reformed and become increasingly dynamic and a major source of revenue for the state in 2008,[69][70] leading the economic recovery in 2009 during the wake of the global financial crises.
[76] Integral to the scheme was the establishment of a mutual-credit bank that would lend to producers at a minimal interest rate, just high enough to cover administration.
Although opposed this type of income, Proudhon expressed that he had never intended "to forbid or suppress, by sovereign decree, ground rent and interest on capital.
I think that all these manifestations of human activity should remain free and voluntary for all: I ask for them no modifications, restrictions or suppressions, other than those which result naturally and of necessity from the universalization of the principle of reciprocity which I propose".
[105] Referred to as left-wing market anarchists[106] or market-oriented left-libertarians,[102] proponents of this approach strongly affirm the classical liberal ideas of free markets and self-ownership while maintaining that taken to their logical conclusions these ideas support anti-capitalist, anti-corporatist, anti-hierarchical, pro-labor positions in economics; anti-imperialism in foreign policy; and thoroughly liberal or radical views regarding socio-cultural issues.
[110] Carson–Long-style left-libertarianism is rooted in 19th-century mutualism and in the work of figures such as Thomas Hodgskin, French Liberal School thinkers such as Gustave de Molinari and the American individualist anarchists Benjamin Tucker and Lysander Spooner.
[112] Unlike right-libertarians, left-libertarians believe that neither claiming nor mixing one's labor with natural resources is enough to generate full private property rights[113][114] and maintain that natural resources (land, oil, gold and trees) ought to be held in some egalitarian manner, either unowned or owned collectively.
