Key Takeaways
1. Economic Democracy: A Viable Alternative to Capitalism
"Economic Democracy, like capitalism, can be defined in terms of three basic features, the second of which it shares with capitalism: Worker self-management, The market, Social control of investment."
Core principles. Economic Democracy is proposed as a successor system to capitalism, addressing its fundamental flaws while retaining its efficient market mechanisms. This model aims to create a more equitable, sustainable, and democratic economic system by restructuring ownership and decision-making processes.
Key features:
- Worker-owned and managed enterprises
- Market-based allocation of goods and services
- Socially controlled investment through public banks
Economic Democracy seeks to balance the benefits of market competition with democratic principles, potentially offering a solution to issues like inequality, unemployment, and environmental degradation that plague capitalist systems.
2. Worker Self-Management: Democratizing the Workplace
"To be sure, it is theoretically possible for a majority of workers to vote to lay off some of their colleagues or to replace a minority of higher-paid workers with lower-paid ones, but the natural solidarity engendered by democracy sharply mitigates against such behavior."
Workplace dynamics. In worker-managed firms, employees collectively make decisions about production, organization, and profit distribution. This structure fosters a sense of ownership and responsibility among workers, potentially leading to increased productivity and job satisfaction.
Benefits of worker self-management:
- Increased job security and worker solidarity
- More equitable distribution of profits
- Enhanced workplace efficiency and innovation
- Reduced income inequality within firms
Evidence from existing cooperative enterprises, such as the Mondragon Corporation in Spain, suggests that worker-managed firms can be highly competitive and resilient, even in challenging economic conditions.
3. Social Control of Investment: Rethinking Capital Allocation
"Since investment funds are publicly, not privately, generated, their allocation back into the economy is a public, not a private, matter."
Public investment. Under Economic Democracy, investment capital is generated through a capital assets tax rather than private savings. This approach allows for more democratic control over economic development and addresses issues of capital flight and regional inequality.
Key aspects of social investment:
- Capital assets tax on enterprises
- Public banks allocate funds based on profitability and social benefit
- Regional and community-level investment decisions
- Emphasis on job creation and sustainable development
This system aims to create a more stable and equitable economy by ensuring that investment serves the public interest rather than solely private profit motives.
4. Market Mechanisms in a Socialist Economy
"Economic Democracy is a market economy, at least insofar as the allocation of consumer and capital goods is concerned."
Market socialism. Unlike previous socialist models that relied on central planning, Economic Democracy retains market mechanisms for allocating goods and services. This approach aims to combine the efficiency of markets with the equity goals of socialism.
Characteristics of markets in Economic Democracy:
- Competition between worker-owned firms
- Price signals guide production decisions
- Consumer choice drives demand
- Regulated to prevent monopolies and promote social goals
By maintaining market competition while changing ownership structures, Economic Democracy seeks to preserve economic dynamism while addressing the inequalities and instabilities of capitalism.
5. Addressing Inequality and Unemployment
"Economic Democracy greatly reduces the economic anxieties that so many people face today."
Economic security. The model of Economic Democracy aims to tackle two major issues of capitalism: extreme inequality and structural unemployment. By changing ownership structures and investment patterns, it offers potential solutions to these persistent problems.
Strategies for reducing inequality and unemployment:
- More equitable distribution of profits within firms
- Full employment policies, including government as employer of last resort
- Investment priorities focused on job creation
- Reduced income disparities between firms and industries
These measures could lead to a more stable and prosperous society by ensuring that economic gains are more widely shared and that meaningful work is available to all who seek it.
6. Environmental Sustainability and Economic Growth
"Economic Democracy does not have the same underlying growth imperative as does capitalism, but ecological sustainability would seem to call for more than that at least on the part of rich countries."
Sustainable development. Economic Democracy offers a framework for addressing environmental concerns without sacrificing economic well-being. By removing the capitalist imperative for constant growth, it allows for a more balanced approach to development.
Environmental considerations in Economic Democracy:
- Ability to prioritize sustainability in investment decisions
- Potential for reduced consumerism through increased leisure time
- Democratic control over resource allocation
- Emphasis on long-term planning over short-term profit
This model suggests that by changing economic incentives and decision-making processes, we can create an economy that respects ecological limits while meeting human needs.
7. Transitioning from Capitalism to Economic Democracy
"Economic Democracy will have to face the career-risk problem squarely, if it is to draw good people into politics."
Gradual transformation. The transition from capitalism to Economic Democracy is envisioned as a process of reform and restructuring, rather than sudden revolution. This approach allows for experimentation and adjustment as new economic structures are implemented.
Key steps in the transition:
- Expanding worker ownership and profit-sharing in existing firms
- Developing public banking and investment institutions
- Implementing fair trade policies
- Reforming political campaign financing and career structures
The goal is to create a pathway to Economic Democracy that is both politically feasible and economically viable, addressing potential challenges and resistance along the way.
8. Global Implications of Economic Democracy
"Economic Democracy is committed to providing decent work for all who want to work—which means the government will provide jobs for people who cannot find work elsewhere."
International cooperation. Economic Democracy has significant implications for global economic relations, potentially offering a more equitable framework for international trade and development.
Global aspects of Economic Democracy:
- Fair trade policies replace free trade agreements
- Reduced capital flight and economic instability
- Potential for more equitable global development
- Emphasis on local and regional economic self-sufficiency
By changing the rules of international economic engagement, Economic Democracy could lead to a more stable and just global economy, reducing conflicts and promoting sustainable development worldwide.
9. Lessons from Historical Economic Experiments
"If we look at these experiments through the lens of Economic Democracy, we see something rather different."
Historical perspective. The concept of Economic Democracy allows us to reinterpret various 20th-century economic experiments, from Soviet-style central planning to Japanese export-led growth, offering insights into their successes and failures.
Key lessons from past experiments:
- Limitations of centralized economic planning
- Potential of market mechanisms in socialist economies
- Importance of democratic control in economic decision-making
- Need for flexibility and adaptation in economic systems
By learning from these historical experiences, proponents of Economic Democracy aim to create a more robust and adaptable economic model that can avoid the pitfalls of both unfettered capitalism and rigid state socialism.
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FAQ
What's After Capitalism about?
- Exploration of Alternatives: After Capitalism by David Schweickart explores the limitations of capitalism and proposes Economic Democracy as a viable alternative. It critiques capitalism's inherent inequalities and inefficiencies.
- Worker Self-Management: The book emphasizes democratic control of enterprises by workers, contrasting with traditional capitalist structures where decision-making is concentrated among a few.
- Social Control of Investment: Schweickart advocates for a capital assets tax to fund public investment, ensuring fair resource allocation across regions and communities.
Why should I read After Capitalism?
- Critical Perspective: The book offers a thorough critique of capitalism, addressing its failures and social injustices, providing valuable insights for those interested in understanding economic systems.
- Proposed Solutions: Schweickart presents Economic Democracy as a detailed alternative, making it a constructive read for those seeking solutions to economic issues.
- Relevance to Current Issues: The themes are highly relevant today, as many grapple with economic inequality, unemployment, and environmental degradation.
What are the key takeaways of After Capitalism?
- Economic Democracy Defined: Characterized by worker self-management, a market economy, and social control of investment, aiming for a more equitable and participatory economic system.
- Critique of Capitalism: Schweickart outlines capitalism's inefficiencies, including inequality and environmental degradation, arguing for systemic restructuring.
- Historical Context: The book uses historical examples, like the Mondragon cooperatives, to illustrate the viability of worker self-management and social investment.
What is Economic Democracy as defined in After Capitalism?
- Worker Self-Management: Enterprises are democratically controlled by workers, allowing for collective decision-making and accountability.
- Market Economy: Maintains a market economy with a focus on social welfare rather than profit maximization, allowing for innovation while prioritizing community needs.
- Social Control of Investment: Investment funds are generated through a capital assets tax, supporting public and cooperative enterprises to ensure equitable resource distribution.
How does After Capitalism address inequality?
- Systemic Issues: Schweickart identifies capitalism as inherently producing inequality through mechanisms like wage labor and private ownership.
- Proposed Solutions: Advocates for Economic Democracy, aiming to redistribute power and resources more equitably among workers.
- Historical Evidence: References successful cooperative models, such as Mondragon, to demonstrate that equitable economic systems can function effectively.
What are the environmental implications of Economic Democracy?
- Sustainable Practices: Emphasizes ecological sustainability as a core principle, advocating for production methods that minimize waste and environmental harm.
- Social Responsibility: Promotes collective responsibility for environmental stewardship, encouraging communities to prioritize ecological health.
- Regulatory Framework: Suggests integrating environmental regulations into economic decision-making, ensuring ecological considerations are factored into production and investment.
How does After Capitalism propose to transition from capitalism to Economic Democracy?
- Incremental Reforms: Transition can begin with reforms enhancing workplace democracy and social control of investment, implemented gradually.
- Public Engagement: Emphasizes the importance of public discourse and democratic decision-making in shaping the transition.
- Learning from History: Advocates for learning from past socialist experiments to avoid pitfalls and develop a more effective model.
What role do entrepreneurs play in Economic Democracy?
- Distinct from Capitalists: Entrepreneurs are essential for innovation but are not equated with capitalists, driving progress without exploitative practices.
- Support Structures: Includes support systems like public banks to foster innovation and provide resources for new ventures.
- Collective Benefit: Entrepreneurs are expected to contribute to the collective good, aligning incentives with social welfare.
How does After Capitalism critique the justification for capitalism?
- Noncomparative Justifications: Deconstructs justifications for capitalism, such as capitalist contributions and risks, arguing they fail to justify wealth disparities.
- Market Failures: Highlights market failures in addressing social needs, suggesting capitalism exacerbates issues like unemployment and inequality.
- Call for Alternatives: Critiques capitalist foundations, advocating Economic Democracy as a viable alternative for a just society.
What role does unemployment play in After Capitalism?
- Inherent to Capitalism: Unemployment is a structural feature of capitalism, used to maintain worker discipline and control wages.
- Full Employment in Economic Democracy: Proposes achieving full employment through government intervention as the employer of last resort.
- Impact on Society: High unemployment contributes to poverty and social unrest, which Economic Democracy seeks to mitigate.
How does After Capitalism propose to achieve environmental sustainability?
- Critique of Capitalist Growth: Critiques capitalism's growth imperative, arguing Economic Democracy can prioritize sustainability over profit.
- Investment in Green Technologies: Suggests public investment in sustainable technologies and practices for an ecologically sound economy.
- Community Involvement: Involves community engagement and democratic decision-making, ensuring environmental policies reflect public needs and values.
What are the challenges to transitioning from capitalism to Economic Democracy?
- Resistance from Capitalists: Existing capitalist class may resist reforms threatening their wealth and power, making transition politically contentious.
- Cultural Shifts Required: Significant cultural shift necessary for embracing new economic models, which can be difficult to achieve.
- Economic Disruption: Transition may cause short-term economic disruptions, requiring careful management for stability and public support.
Review Summary
After Capitalism receives mostly positive reviews, praised for its accessible exploration of alternatives to capitalism. Readers appreciate Schweickart's clear writing style, logical arguments, and practical approach to market socialism. The book is commended for its thorough analysis of capitalism's flaws and its proposal for a system of Economic Democracy. Some critics argue the implementation strategy is unrealistic, while others find the ideas not radical enough. Overall, reviewers consider it an important contribution to discussions on economic alternatives and recommend it for those interested in post-capitalist possibilities.
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