essays-ccs/market_socialism.md

Why Marxists are against markets

Market socialism is an extremely fringe view among socialists. So, why do some people(even socialists) think we need markets?

Remember that this is a distributional problem : we have a bunch of goods and services that we need to distribute to people.

Markets are one way to do that, and the primary way under capitalism. Markets are based on two things:

• Individual profit: IE, buying low, selling high, and ignoring the effect of the transaction on others(externalities).
• Commodification of every resource (even people).

Labor is one such commodity, that is bought for cheap, and it's results sold for high (IE profit).

History of markets

Markets only became the primary way to distribute goods within the last 500 years. For the vast majority of human history, rituals, harvest festivals, a group of elders deciding fair distribution, or communal decision-making accomplished what the market does today. Writers like Plato and Aristotle detested markets(small-scale trade within cities and between nation-states at that time), because they witnessed how the individualistic profit motive worked to destroy the community.

Markets, through the commodification of every resource(including human beings), destroy the community in the following ways: they promote generational wealth hoarding, increasing inequality, treating people as objects, monopolistic practices(price-fixing, dumping, colluding), rent-seeking, informational failure(over/under production), booms/busts/business cycles, negative externalities(affecting the environment and third parties), unpaid labor(such as housework, and childcare), human exploitation(slavery and wage-slavery, prostitution), large-scale imperialism(Such as in Africa, South America, and Asia post 1700s) demerit goods(encouraging for-profit drug use), inefficient and incorrect valuation, artificially high barriers to entry for many sectors.... in short, they result in an antagonistic relationship between a working class, and an owning/wealth hoarding class.

What do we replace markets with?

You'll hardly see any Marxist advocating markets as a distribution system, because of that individualistic profit motive. Most of us advocate for democratically planned economies with labor vouchers, or gift economies in goods that are widely abundant. For a great academic breakdown of how planned economies would work, I suggest Cottrell - towards a new socialism.

What's wrong with market socialism?

The argument for market socialism basically states that we somehow outlaw the commodification of labor, but retain markets. Even if the the market were socially controlled and commodification of labor were somehow outlawed, it would still allow hoarding of wealth, individual profit motive over collective good, and emphasize monetary incentives over human ones.

Market enterprises have one goal, increasing profit and market share. What would prevent a coop from polluting a river that people use, if they're able to cut corners and extract a larger profit?

What would prevent a small group of people from accumulating wealth and using it for individualistic motives? Maybe they won't be legally able to exploit a labor force, but they will still try to get away with it, to satisfy the profit motive.

Finally, there is the market socialist principle that somehow we stop treating labor as a commodity, but we continue to treat everything else like one. Natural resources are one such thing we should not be treating as a commodity, which they would be under a market system.

Market socialism in a predominantly capitalist society has a historical name: utopian socialism. Engels, in Socialism: Utopian and Scientific, explained how a few of the early socialist reformers such as Fourier and Owen nobly tried to set up idealistic isolated islands of socialism, in the early stages of the industrial revolution. These all failed, both because they relied on capitalist enterprises for materials and means, and because they were outcompeted by capitalists who did a better job of extracting a higher profit from their workforce. Engels stated that as the class contradictions become more absurd, The mode of production rises in rebellion against the form of exchange, IE, the socialized force of production(the working class) rises up against the individualism of the market.

How do we deal with scarce goods, and getting paid? A: Labor vouchers

Labor vouchers would replace money as a way to govern demand for non-abundant goods.

Labor vouchers are different from money in that:

1. they are valued in time, not an arbitrary substance or thing.

2. they are attached to a person/family, and can't be traded.

3. are destroyed after they're exchanged for goods/services from the democratic workers council organization(I usually call it the pool)

In books like I like linked above, goods/services are valued and labor vouchers are based on labor time, and that book provides good calculations for how to value labor time for various things. Instead of getting paid a certain amount per hour, you would simply receive something that proves your hours worked.

Likely there would also be a kind of basic income of labor vouchers, to make sure everyone gets a fair share of the distribution of food and housing and such(this could be seen as accounting for unpaid labor done in the home). Since they are attached to a person/family, labor vouchers prevent wealth accumulation being handed down to further generations.