The detail of the Socialist economic doctrine
Version 2.5 :: text by Adrien
-A reminder of Socialismâ€™s goals
-How can this be achieved?
-What is the Welfare State?
-Donâ€™t other parts of the State also have a social mission?
-A new framework for the economy.
-The key question of taxation.
-A pinch of protectionism.
-Workersâ€™ rights to conquer and/or secure.
-Ecology and Socialism.
-How to help this world to change?
Since it often represents the base on which the new Socialists build their different trends and tendencies, we will describe here the bulk of the Democratic Socialist ideology. Bear in mind that this is a starting point thanks to which build your own goals and methods.
#A reminder of Socialismâ€™s goals:
So, as we said earlier, the goal of Socialism is to raise the entire societyâ€™s living standards, and here society does not include any nationalist or xenophobic feeling ; it can be applied to a group of countries working together, without limitation, like for instance to what is nowadays the European Union, what could become the African Union or what could be a consequence of the Mercosur. In a word, and this is in agreement with Socialismâ€™s founding principles, the goal of the system is the common good, and the whole Human race is what this â€˜commonâ€™ refers to.
But what does â€˜increasing living standardsâ€™ really mean? Itâ€™s easy - it means that work must not be a goal of your life but a means to enjoy it fully. Itâ€™s about giving you no matter what happens a decent wage to give you the buying power you need, itâ€™s about working less to be less tired, to spend more time with your family, to be able to practice your passions, your hobbies and entertain yourself. It may sound like frivolous details for some, but at a scale of an entire working society, it does mean a lot.
#How can this be achieved ?
To many, high unemployment and latent misery are fatalities that cannot be attacked; they are not. In a society, labour and money travel from oneâ€™s hand to oneâ€™s pocket. A Socialist government would just have to connect the flows in such a way that they end in the right personâ€™s pocket. To put it simply, we have to restore the following â€˜virtuous cycleâ€™:
If we give work to more and more people, it will in turn create an increase of consumption and consequently of production, which will create an increased need of workforce and loop the loop. Add to that a more human work and the problem is solved, isnâ€™t it?
You have certainly all noticed the keynesian nature of this logic. To go from basic keynesianism to obvious Socialism, two actions must be led in parallel to the restoration of this cycle: firstly the reconstruction of a strong welfare-state, and secondly a strong regulation of the market by the State.
#What is the Welfare State?
The welfare-state is a group of fundamental and vital services that concern the whole society, that must be provided to every citizen, and must consequently be the property of the whole society: water, energy, public transports, telecommunications. To this, you add social services to ensure financial help to people in need, healthcare and the help to employment. All these community services constitute the platform of society, the necessary toolbox to make society work for its development; in a capitalist society, these services are opportunities for share-holders to make money and since what is wanted is profit and not the satisfaction of vital needs, the society is harmed and many people left without the capacity to access such vital services.
This welfare-state must be made of state-owned monopolies, taken out of the stock exchange, not to let speculation influence their social mission. And there we have the opportunity to differenciate Socialism and basic Social-democrat statism
: Luxemburgs_Pastry_Chef makes us note that social-democrat statism usually grants state control and judiciary protection above all to companies, which doesnâ€™t mean making them â€˜socialâ€™, making them the absolute property of the people. Also, services like the British NHS (National Health System) are not inherently â€˜socialistâ€™ since they are paid for by the public taxes, ie from a separate punction on the workersâ€™ spending power rather than by society as a whole.
For these Socialist public companies, no need to make profit, they just have to counter-balance their expenses. And even if a financial problem was to happen, the company would not be dissolved because it was unable to make profit (like it would in savage capitalism), the service would still be provided, and the State would give itself time to resolve the problem. And in case the said company was to make good profits, they would be used for research, to increase wages or to help another public company in difficulty, three options that all benefit the whole society and are a million miles away from dividends.
Were the State to take care of these services and provide them to citizens automatically, the said citizens would be able to dedicate themselves to their direct well-being. Furthermore, this welfare-state, thanks to its social services, is a safety net allowing people in difficulty to bounce back; we said that it was important for people to keep their buying power as itâ€™s one of the conditions of increased living standards. In a capitalist society, the unemployed or the unable to work (or even the retired) donâ€™t have automatic social protection and are easily thrown in a downward spiral of despair and misery, and are then forced to accept incredibly underpaid works, which doesnâ€™t make either their own situation or that of society any better. With the welfare-state, a citizen in trouble is at once and efficiently reinserted in society with financial aids and if necessary an organized support (ie a national service of employment) can help him to find another job fitting his skills or a formation to acquire new skills matching the needs of society.
By providing services such as telecommunications and transports at a very small cost (or even possibly for free eventually), since the companies do not try to make profit at all costs, the welfare-state also contributes directly at the increase of living standards ; communications and transports play important roles in the access to entertainment and in family life, and also in the reinsertion of people in the professional world.
Finally, to keep this system working, Socialism believes, in addition to the money brought by the public companies, in the action of an important system of progressive taxation according to the income of people and companies; since this system benefits to everybody, everybody must participate in it, at a proportional cost. People with small income will pay a small tax, people with high income will pay a higher tax, and people with very big income must be particularly taxed. Itâ€™s just a matter of solidarity, isnâ€™t it? With this system, Marxâ€™s â€œFrom each according to his abilities to each according to his needsâ€ takes a whole new dimension.
#Donâ€™t other parts of the State also have a social mission?
Of course, this welfare-state is not the only part of the State apparatus that works to increase living standards, it is even just then economic part of it. In addition to that, you have the human dimension of the problem: education and culture. Education of course, as it is what makes every citizen aware of its rights, as it gives every citizen the capacity to understand the world and enjoy it, and as it prepares you to have a good job. In a word it makes you be more than just a brainless working machine. Every single citizen must have access to a compulsory, totally free and absolutely efficient system up until his or her majority, while having guaranteed low university fees to pursue his or her cursus. It does already exist in many countries and can be even pushed further.
And culture too, as it is a means to enjoy the world and as artistic creation is fundamental in a societyâ€™s development; it is not acceptable for culture to be considered as a simple merchandise meant to make profit. The State must support cinematographic, audiovisual and literary creation against the international laws of market, with an action that protects cultures, languages and genres and makes culture affordable and reachable.
#A new framework for the economy:
Basically, and obviously, with the State. The State represents the community, and is therefore above the so-called laws of naturally free markets. And as such, it is its duty to make society work in the interest of everybody; interventionism, dirigisme and legislation are its tools.
Firstly at the scale of the nation we need what could be called â€˜modernâ€™ planning, as opposed to the authoritarian planning known in the Soviet bloc. This means that the political power must have the power to intervene physically in order orientate the economy and shape the industrial landscape to satisfy general needs of the community, particularly through the creation ex nihilo
of small local businesses and â€œfree zonesâ€, which include the use of incentives, advantages or obligations for companies to change their attitude: it can be necessary to correct a persistant bastion of regional unemployment, to repair a lack of infrastructures in an area, the lack of a particular service, or to correct the abusive monopoly of a particular company over an area for a given service or type of production. Modern planning also means that in front of the needs of society as a whole the State can be brought to give juridical or fiscal advantages to stimulate a particular sector of the economy, or on the contrary to force some sectors to slow down. This is necessary to prevent the socio-economic system from sticking itself in a dead-end and waste ressources: History has showed us with the restructuration crises of the 1980s that the former was eventually socially catastrophic, and the latter is just unacceptable in a world where millions live in starvation while tons and tons are destroyed not to upset the markets.
Then, at the scale of the relationship between the employee and the employer, laissez-faire is not acceptable ; the State has the duty and enough legitimacy to regulate both the organization of companies and the redistribution of benefits, once again to ensure that society works according to what we have evoked earlier.
For the former, laws must implement democracy in the companies and factories, for a company works more humanly and with more respect for the horizontal development of society if it rests on its feet rather than on its head, so to speak. With an increased power of decision for Unions (independent or part of bigger federations, local or national) and workers individually, we prevent conflicts and make sure that problems of wages, of technical upgrades, financial scandals (golden parachutes, outsourcing, lock-up, etc.) are avoided. Also, the State must put forward the idea of â€˜participationâ€™, that is to say the replacement as shareholders of people outside the company by workers themselves, which is an interesting way to use the system of shareholding at the advantage of society and an easy way to guarantee incentives to the company.
For the latter, and it does also concern the relationship between employers and employees, the State can pass laws and decrees enforcing regulations of the surplus phenomenon we saw at the beginning of the FAQ. Let us take an example: a worker produces in its day of work a product whose price is 240 units (not to take a particular currency). This worker will receive a wage of 80 units, thus leaving 160 units go in the pocket of the companyâ€™s managers, who even after taking care of expenses will keep a good deal of it for share-holders. This means that if we make a proportion between his working time and what he receives, out of a day of 9 working hours, he was paid for 3 hours and worked 6 for free, which is as you can see not acceptable, but also creates a discrepancy between the workerâ€™s income and the price of life. And let us not even mention again how companies manipulate this phenomenon to create more wealth for share-holders since we saw it already.
Now, if the State institutes democracy in companies (which will level wages and suppress or at least narrow the gap between workers and chairmen), if it institutes a clear, legal and possibly rather high minimal wage, and if it agrees to tax companies according to their results, it is very easy to modify this proportion, and end up with a situation where the workers (and employees) would be paid (for instance !) 120 units, leaving a â€˜surplusâ€™ of 120 units for the company, which would once again thanks to democracy rather go to reinvestment and optimisation of the company rather than share-holders. And it is important to note that during this process the price of the product has not changed at all, the buying power of the worker has increased by 50%, and the survival of the company has not been endangered either.
#The key question of taxation:
Now, we just evoked a shift in the kind of taxation that is important, and once again very practical. Our societies must not expect from international companies to come and create jobs since they â€˜capitalisticallyâ€™ speaking donâ€™t have any interest in doing so. It consequently means that we must stimulate the creation of new (big and national, or small and local) companies (craftsmanship, cooperatives, services, industry) between our borders (be they borders of a country or, and that is always better, of a group of countries), but today this creation of companies is slowed because of, as usual, money : taxes, logistic expenses, fees, etc. Since it is just simply not an option to compress wages, the State must reduce the cost of the whole process by modulating some of these taxes, and it must also be ready to offer financial help (as gifts, loans, partial nationalization, joint-ventures, etc.) to help companies to start their activity.
Of course, all this will in turn reduce the income of the State but with the progressive taxation of citizens we evoked earlier, a courageous taxation of the money flows that enter and leave the stock exchange (at a fixed percentage, for instance 0,5%), the VAT, and of course a big cut in military and protocol spending, the math is certainly more than possible to do. And let us not forget that with such a policy the wealth available in some of these sources will increase, while an increase of living standards will mean a decrease of necessary social programs and consequently allow massive investment in State research, education and culture for instance. In a word, the system will support itself, like a true virtuous circle. Simple, isnâ€™t it?
We evoked the VAT, firstly, why is it important? Because it is an indirect tax that does not look at what you are forced to earn but at what you choose to buy with your savings, and in front of which everybody is consequently equal. Itâ€™s the other necessary part of a Stateâ€™s taxation system. Now, the State can also modify this VAT to increase living standards or orientate the economy when it has become necessary: for instance, because possibilities are numerous, by cutting the VAT on products of â€˜first necessityâ€™ (basic food products for instance) and thus decreasing their price without influencing their production process it makes sure that everybody is able to satisfy basic needs. And by raising or lowering the VAT for a particular type of products, it can stimulate or slow down a sector of the economy.
We also evoked the taxation of money flows at the stock exchange. Why? It is simple, we have seen that to stimulate the creation of companies and their insertion in the economic world, the State has to cut some of the taxes it received from companies no matter what were their results. By taxing money flows at the stock exchange with a fixed percentage, the State reinserts companies in the circle of contribution, and create the equivalent of the progressive taxation system that concerns citizens. The more the company earns, the more it will give to the State; the less it earns, the less it gives to the state. And it is also a way to make companies installed within the borders but which exploit workers above give their contribution to society, while preventing small companies from outsourcing and big companies from getting away with all their money.
#A pinch of protectionism:
To keep on with dirigisme, one of the basic needs of society is of course food, the State (once again at the scale of a country or a Union like the European Union or something even bigger) must directly rebuild the primary sector of its economy, and more particularly its agriculture. If you apply to this sector the measures of stimulation we have seen so far, and if we give to local productions the priority over foreign productions, on which we only rely for what we cannot produce or do not have enough of (and it is as true for food as it is for consumer goods, then we create a lot of jobs, we reduce waste (because today tons and tons of production are left to rot as cheaper productions from countries where the wages are lower come first), we give the capacity to the citizen to have access to products of better quality, we stimulate the economy, etc.. And if every country of a Union, a continent or even of the world applies that kind of policy, a close intertwining of productions, of needs and ways to satisfy them is created, which reinforces cooperation between cultures and peace through interdependence, while allowing the developing countries to mainly use their domestic productions for their own development.
About consumer goods, while the economy would be locked-up by partial planning and interventionism, protectionism can be added through import taxes or physical controls like quotas. The idea would not be to protect the â€˜nationalâ€™ companies from a â€˜foreign invasionâ€™, but to secure the creation of jobs within the borders of the State or group of States, jobs that could as well be created by national or foreign companies. In fact, History has shown, and particularly in the US automotive industry, that protectionism and physical controls bring the foreign companies to create new factories and jobs from scratch on the national soil of the protectionist country in order to dodge taxes and quotas.
#Workersâ€™ rights to conquer and/or secure:
Finally, the last aspect of interventionism and dirigisme is the most concrete and human of all, it is the group of â€˜social gainsâ€™, which has to be enforced by the community, the State, through legislation. In this category we find the guaranteed minimal wage for the employed population. There is also the limited weekly working time : indeed, if this weekly working time is reduced to 35 hours (for instance), it leaves the worker and the employee more time for their private lives, and on the other hand it forces companies to hire more people to counter the fact that each worker works less, knowing that the State is there to help them make the transition. And of course there could be â€˜guaranteed employmentâ€™ in the form of an interdiction for companies to suppress jobs or outsource if it is making a certain percentage of profit, but it is anyway a given that the use of keynesian economics and a solid public sector would institute a state of guaranted employment.
#Ecology and Socialism.
After having tackled all sorts of economic, political, social issues and the solutions brought to them by Socialism, there is one particular â€˜problemâ€™ that needs to be addressed, that of the environment and of its preservation. This issue seems to go beyond a classic left-right political axis, as all trends claim to protect the planet. But the fact is that Socialism is the most able to bring about an intelligent form of exploitation of our natural ressources: we all know that most of the damage done to the Amazonian forest, to the seas and oceans, to the reserves of drinkable water, to the atmosphere even, is the result of a never ending race for profit. Entrepreneurs, eager to gain as much money as possible, purposedly neglect to make the necessary investments to upgrade their installations or to ensure the survival of the forest and of its many endangered species. Under Socialism, the public sector, which is not driven by profit but by the common good, will act as a very vanguardist protector of the environment, investing massively in new energies and actively seeking to reduce waste : that is one of the big advantages of a very large and powerful public sector, it can afford to have ethics and morals. Then, the State will promote among private companies the need to protect the planet, by giving financial incentives and rewards, but also by daring to sanction companies who do not abide by the laws protecting our ecosystem, as part of the â€˜framingâ€™ of the economy that we have already evoked. Finally, we expect the new Socialist society to be made of individuals aware not of their personnal comfort but of the common good, of the comfort of the next generations, on the very long term. Unlike former authoritarian forms of Socialism / Marxism, democratic Socialism will force a new morality upon people but will make it spark among the population.
#How to help this world to change?
Of course, such big changes in society can only be pushed efficiently by a big and united popular movement, but isnâ€™t a big and efficient popular movement nothing more than the sum of the work of thousands and thousands of individuals?
Now, it is in fact pretty simple to act at your own scale: firstly you can discuss with your surrounding, colleagues or friends of the problems of the world, and make more and more people aware of the situation and of what we must all do to change it, that is how big movements are created. Then, you can be yourself concretely act on the system, just by being an educated citizen, voting systematically, watching very closely the ideas of those you vote for, and maybe by yourself joining a party or an association in order to obtain changes. And you can also be an educated â€˜consumerâ€™, by avoid over-consumption, the waste of resources, but also by supporting ideas like Fair Trade for instance.
We all just need to be convinced that change is necessary, possible, and never give up our right as citizens of the world, as human beings, to protest and demand a better life.