full image - Repost: Market socialism -> Market exchange ALONE is insufficient to recreate capitalism. (from Reddit.com, Market socialism -> Market exchange ALONE is insufficient to recreate capitalism.)
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I want to state that from the outset, i am not JUST a market socialist. I do not think that markets alone should be the dominant force in social life. After all, for an institution to remain voluntary, you must be able to opt out of it. I lay out my position more extensively here if you are curious. Basically I think that markets should be AN option for social organization but not the only one.Ok, that said, let's talk.A very common critique on the left of market socialism is the idea that the process of market competition will create "winners" and "losers". The losers will necessarily have to sell their access to the MOP and so be permanently reduced to wage labor, which the "winners" effectively keep control of the MOP and over a long enough time frame you will eventually just get capitalism again.I disagree with this viewpoint for a few reasons and I wanted to discuss them here. I'm particularly looking for leftist takes, but I'm happy to hear from anyone here really.Ok, let's dive in.I think this view is flawed because it assumes that market socialism is simply replacing modern day corporations with worker cooperatives and calling it a day. It is not (at least in my view).Arguably the most important change that would occur within a market socialist framework is the socialization of finance. The basic idea is that we can seize the credit commons, a la the work of Thomas Greco. Basically, workers can promise each other future labor in exchange for current consumption. In short, they can extend each other credit. This idea is called mutual credit. Basically the idea is that we can keep a record of debts and credits to one another. So sally needs some gardening work done. Joey does that for 10 credits. But I did some work for Joey earlier so his debt to me is paid by his sale to Sally. I'm happy to elaborate on this.The important part is that mutual credit arrangements effectively socialize finance. This is because nobody is in a position to hold credit out of market in exchange for a fee (which is basically how banks make money today, they enclose our credit and then led it back to us at a profit). Once finance is socialized, this means that nobody could ever really lend money for a profit because it can simply be created through credit/debt relations within a mutual credit network. Debt will always be paid back as the principal (plus whatever administrative overhead there is and inflation) and therefore it is effectively impossible to make a profit on debt.Now, why does this matter? Because it is effectively impossible to profit off of debt, debt slavery and the like are impossible because nobody would agree to a high interest loan when they can just use their own credit and promises of future labor to buy now.This means that even if a worker were to lose access to the MOP this condition would be at best temporary. Why? Because the worker could simply pledge future labor in exchange for access to the MOP now, whether that be some tool or factory or what have you.In the capitalist system this isn't necessarily possible because debt has a profit payment attached to it and so you still end up working to generate a profit for the capitalist. And as you need more debt to expand you generate more profit for capitalists and so on. There isn't really getting out of it once we attach profit to debt.But if we socialize finance we ensure that every worker has the means to acquire their own MOP and therefore no permanent underclass is possible because the laborer can always use their future labor as leverage to buy MOP now.Interestingly this also means that investment is now driven entirely by utility gained by the workers. This is because, again, profit is impossible, and investment is in the hands of the working class.Hell even if we do accept the framework of "winners" and "losers" is it not possible for workers to establish some worker owned insurance cooperative? It would cover losses and any incurred debts and ensure that every worker maintains access to the MOP.Fundamentally I think this critique just assumes that worker cooperatives replace capitalist corporations and we leave it at that. No, market socialism also addresses the fundamental structures that enable capitalist extraction within the marketplace. Things like interest on debt in excess of inflation and the broader for-profit investment system rather than a use-driven investment system. And it also assumes that workers cannot counter any potential losses in market economies through collaboration. It just assumes that we do nothing else other than replace corporations with cooperatives, and I don't think most market socialists think we stop there right?Anyways, would love your thoughts!For the above reasons I think that the re-emergence of capitalism via market transactions is unlikely because it's unlikely there will be a permanent underclass who no longer have access to the MOP, thereby preventing the rise of a class of owners and a class of not-owners.tl;dr:The socialization of finance ensures that every worker has direct access to the financial means to acquire capital goods, which can then be used towards production. Capitalism requires a permanent separation between the owning classes and the non-owning classes, and so if the non-owning classes are able to acquire their own MOP they will never agree to the exploitation of the capitalist class, and so the production of profit, surplus value, and all the rest is rendered impossible. Furthermore, investment is no longer driven by profit but instead by the utility of the worker as it is directly under worker control.Edit:I also made this post on r/PoliticalDebate and I figured after talking with folks there I should add why interest is impossible.I'll copy my comment that explains it.So mutual credit is basically just bookkeeping. It's using your sales to pat for your purchasesSay I did a job for Timmy worth $10. Susan needs a different job done worth $10 so Timmy does it. In si doing he pays off his debt to me. His sale to Susan paid for his purchase from me.Ok, so where could I insert interest into this equation?You cannot.Because if anyone tried to charge interest on a loan, people would simply not accept that loan because they can get it cheaper via mutual credit.The only reason you CAN charge an interest is because of things like legal tender laws that effectively means you need US dollars, coupled with other banking and financial laws that favor big banks.Basically, charging interest is only possible when you artificially restrict or favor other finacial arrangements like mutual credit.So in short, interest is impossible because people wouldn't accept interest when they can extend credit to each other free of charge.
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