“What differentiates system change from reforms? Reforms refer to government interventions that still leave employers in the exclusive position to make the basic enterprise decisions: what, how and where to produce and what to do with profits. Reforms include minimum wage laws, redistributive tax structures, and enterprises owned and operated by the government. They range from the mildly Keynesian (the New Deal) to the democratic socialist (what we see in Scandinavian countries) to the state socialist (the model of the USSR and People’s Republic of China). All such reforms retain the core relationship inside enterprises as that of employer-employee, with private or public directors controlling the mass of workers and making the basic enterprise decisions.

In contrast, system change means reorganizing the core human relationship inside the factories, offices and stores of an economy. That relationship connects all who participate in production and distribution of goods and services. It shapes (1) who produces what, how and where; (2) how much surplus or profits are available; and (3) the disposition of the surplus or profits.

Truly moving beyond capitalism means breaking from the employer-employee core relationship. It means no longer assigning a relatively tiny number of people inside each enterprise to the employer position of exclusively making the sorts of decisions outlined above. In private corporations the employers are the boards of directors selected by the major shareholders. In state or public enterprises of the traditional socialist economies, the employers are state officials. Instead of either kind of employer-employee relationship, system change installs a different core relationship inside enterprises. A different group of people — all workers in the factory, office or store — democratically makes those same decisions. The rule is “one worker, one vote,” and in general, the majority decides. The difference between employer and employee dissolves.

Such system change beyond capitalism means something quite different from shifting to public directors from private directors, which is a reform. System change entails the democratization of the workplace. The logic governing the economic system, then, would no longer be capital-centric (making decisions (1) through (3) in such a particular way that the capitalist employer-employee relationship in production is reproduced). The particular connecting relationship at the core of capitalism will have been superseded: rather like what happened earlier to the slave-centric core relationship (master-slave) and the feudal-centric core relationship (lord-serf). Instead, the post-capitalist core relationship will be democratically worker-centric, with the central type of workplace being the worker cooperative.”

The above passage comes from an essay by economist Richard D. Wolff, he’s one of my favorites.

Tags:capitalismeconomicsmarxismRichard Wolffsocialism