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In the 1930s, the German sociologist and economist, Alexander Rüstow, was in favour of the nationalisation of rail companies and utilities - what Prout would call 'socialisation'. The difference being that in 'socialisation' it is the social well-being of the people that matters and has priority. The nation is subsidiary, and so should 'nationalisation'.
A nation really arises as "a kind of sentiment" (Sarkar 1960). Though the sentiment revolves around various factors these factors (e.g. language, religion, etc) are of themselves insignificant as it is the sentiment itself that forms a nation. That sentiment comes from people.
Similarly, in considering what sort of key industries should be run on a governmental business enterprise basis (be it local, bio-regional, provincial, state or national), or more correctly on trust for the people generally, we have to turn to how important the resource utilized by that industry is to the social well-being of all people in the relevant region or political unit. But let's not quibble with the difference between 'nationalisation' and 'socialisation' right now. Let's look more closely at what Rüstow espoused.
Rüstow supported active social and economic policies, including industrial policies, that eased the social impact of economic upheaval. For example, he wanted to reduce inequality through high inheritance taxes. He proposed higher taxes on large companies. “The economy is there for people”, Rüstow insisted. Now what is most relevant is that he called this 'neoliberalism'. His thoughts also influenced the founding of the now European Union.
But neoliberalism has become a kind of swear word today. Why because it has taken on a different meaning. However, in a way it has no meaning, as hardly anyone identifies as a neoliberal in practice. Hardly anyone self-identifies in this way. If neoliberalism is hardly ever defined in any meaningful sense, then it can mean anything you wish to disagree with. That is the problem with using the term. Practically, what this means is that people who do use the term, do not do so from sound theoretical knowledge, let alone practical insight, but often from some desire to defame political opponents. Then what that means is that the neoliberal label has simply become part of political rhetoric. In short, an almost meaningless symbol or insult, just for the sake of it.
Looking back though, when the neoliberalism term was invented, well over 50 years ago, it was quite the opposite of what many think of it today. It had sound theoretical foundations. The shallowness with which we use neoliberalism today in a pejorative way corresponds inversely with the depth of thought by its original users. Of course, the original ‘neoliberals’ have little in common with those who are nowadays called ‘neoliberal’.
Because of the vagueness with which the term is used today, can anyone really understand what it means when used in conversation? Perhaps they don't want to because it is enough to just fire off these kinds of political shots in order to try to beat down political opponents. But it is like a bullet that has no momentum because it just evaporates into meaningless gibberish. This is because of lack of theoretical foundation in the way it is used today.
Whereas, the original neoliberalism was built on social and economic theory of some depth. Even though not to the depth of what is available today in economic and social thought - still however its proponents did not seek to lose sight of the need for strong theoretical, and practical, foundations. Neoliberalism was precisely ‘new’ in that it embraced social, economic and political rights. For example, it recognized worker's rights, social welfare protection, public health, education, and other welfare provisions, all of which were considered progressive in Rüstow's time and would actually be helpful to the development of market economies for the betterment of society overall.
This is quite different to the way people now use the term. But it probably matters little how they use it now because it lacks definition, because (as mentioned) hardly anyone self-identifies in that way, and because essentially it has hardly any practical value. It does not make sense to use a term that has little meaning or whose supposed meaning has little consensus or foundations.
It is a bizarre twist of fate that the term ‘neoliberalism’ was re-inverted in Latin America in the post-Chile coup era (around 1972) to identify it with something (the exact 'something' is rather unknown) that is the opposite of its origins in the 1930s. Instead of enhanced social protection and placing boundaries on markets, it came to mean virtually the opposite – a reversion (in theory at least) to 19th century free market liberalism. Plus, its users even removed the 19th century commitment to political liberalism and the freedom of political thought. This is still vague though, but the whole term neoliberalism and what it attempts to capture is vague.
As it is used today, the term neoliberalism does not pin-point a well-worked ideology. It is usually used against proposals that are seen to promote individualism that is far in excess of promoting collectivism. Of course that is a fair point - such proposals are worthy of criticism as they promote imbalances, and imbalanced relationships, in society. But while using the term against economic and social proposals, its users ('anti-neoliberalists') also promote causes or economic cases that are frankly utopian or a grab-bag of policy ideas that also lack a nexus between what is capable of being done from point A compared to what is actually possible at point B.
The link between the two, that is movement from point A to point B always has to be progressive - that means going forward or onward successively from one point to the next step by step in a rational way; and what is 'rational', well it is at least promoting equity and at least giving opportunities to properly utilize things, be they physical resources, supramundane or mental resources, or the more abstract spiritual or casual resources. What is the speed of those steps, depends on whether the forces at play are natural, evolutionary or revolutionary forces. If ordinary or natural movement is expedited or accelerated by pressure or application of various forces it becomes evolutionary movement. If further accelerated by tremendous application of forces it becomes revolutionary movement. The destruction of an entrenched hegemony prevalent in a particular age will certainly be the result of tremendous revolutionary forces.
Much like any organism, including a human child, exploring its new body and reaching out with newfound talents to discover what's possible, what's practical, and what to do or not to do, and the conduct involved for either, so also is the path of progressive proposals. The child does not want to cause any harm and just wants a fair playing field (equity) and the child also wants to fulfil its capacity and use appropriately what is around it - be it the physical, mental or spiritual environment. This is not necessarily an easy task and inevitably involves clash and cohesion, or the process of thesis and then an antithesis formed against the thesis to create a synthesis, which in turn becomes the next thesis, and so on. And yes, it is always necessary to adjust.
The task of thinking about positive alternatives is urgent, and efforts in this direction must be practical and its theoretical foundations must be strong. Mere rhetoric like in neo-liberalism is not really an anti-thesis - it must be more than that. It must actually be a practical challenge against the prevailing thesis. However, it must also be inspiring. So many ideas will develop in the mix, but it is the progressive ones that will surely prevail.
References:
Chu, B (2018), The European Union is not a 'neoliberal conspiracy' – and it’s disturbing that some in the Labour Party apparently believe this nonsense, 13 May 2018, Independent,
https://www.independent.co.uk/voices/european-union-neoliberal-conspiracy-labour-party-brexit-jeremy-corbyn-a8349316.html
Hartwich, OM (2009), Neoliberalism : the genesis of a political swearword, CIS occasional papers; 114,
https://www.cis.org.au/app/uploads/2015/07/op114.pdf
Sarkar, PR (1960), To the Patriots, 1 January 1960, Jamalpur.
Talbot, C (2016), The Myth of Neoliberalism, 31 August 2016,
https://colinrtalbot.wordpress.com/2016/08/31/the-myth-of-neoliberalism/
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Today, 'democratic socialism' places significant emphasis on cooperative enterprises and economic democracy as integral elements of its approach to restructuring the economy and society. These concepts are seen as vital for reducing economic inequality, increasing worker participation in decision-making, and promoting a fairer distribution of wealth. The ideas of democratic socialism have evolved since the 1960s when, at that time, there was more discussion about the mix of socialism and capitalism. Now, there are a lot more ideas and alternative incorporated into the thinking around democratic socialism.
The modern ideas of democratic socialism encompass a wide range of political and economic principles aimed at creating a more equitable society and resilient economies. At their core, these ideas seek to blend the democratic values of freedom, equality, and solidarity with a commitment to addressing economic and social inequalities. It is worth looking at some key elements.
Social Ownership and Control of the Economy
Democratic socialists advocate for a significant degree of social ownership and social control over the economy. This can take the form of worker cooperatives, public utilities, and government-run services, with the aim of ensuring that the economy serves the interests of the people rather than just a wealthy elite. Democratic socialist policies now often include support for cooperative enterprises through various means, such as providing start-up grants, offering tax advantages, facilitating access to financing, and implementing supportive legal frameworks. These are only policies, as democrat socialists do not have representation in legislatures around the world. As well, it supports the establishment of publicly owned banks that can provide resources for local development projects, including cooperatives, which is also is another strategy to enhance economic democracy.
Redistribution of Wealth and Power
A central tenet of democratic socialism is the belief that wealth and power should be redistributed more fairly. This includes policies like progressive taxation, which increases the tax rate for high earners, a wealth tax, and other measures to reduce income inequality, such as a higher minimum wage and stronger labour rights. The concept of democratic socialism, now also involves democratizing economic power within the workplace and the broader economy. It extends democratic principles to the economic sphere, proposing that decisions about economic policies and practices should involve those who are affected by them. Accordingly, democratic socialism advocates for laws and policies that encourage or require worker representation on company boards of directors, known as co-determination, which has been successfully implemented in countries like Germany.
Universal Access to Essential Services
Democratic socialists support universal access to essential services such as healthcare, education, and housing. This means that everyone should be able to access these services regardless of their income or social status.
Environmental Protection and Sustainability
Today, there is a strong focus on environmental protection and sustainability within modern democratic socialism. This includes policies to combat climate change, protect natural resources, and transition to renewable energy sources.
Democratic Decision-Making
Democratic socialists believe in expanding democratic decision-making beyond just elections - i.e. right into the heart of the economy through 'economic democracy' in the workplace and in work enterprises. This can include workplace democracy, where workers have a say in how their company is run, and participatory budgeting, where citizens have a direct say in how public funds are spent.
International Society and Solidarity
There is a strong emphasis on international solidarity and cooperation. This includes support for international institutions and agreements that promote peace, human rights, and environmental protection. The model of economic democracy and cooperative enterprises is also promoted on the international stage by democratic socialists through organizations like the International Cooperative Alliance and through international labor movements.
Evolution of Democratic Socialism
Why have ideas around democratic socialism evolved and changed from the 1960s when it was about socialism and capitalism together to more advanced ideas about cooperatives and economic democracy? The evolution from its mid-20th century focus on a blend of socialism and capitalism towards more nuanced ideas like cooperatives and economic democracy simply reflects broader socio-economic changes, shifts in political ideologies, and lessons learned from both past successes and failures. What are some main reasons for this evolution?
Changing Economic Contexts
As global trade barriers fell and capital flows increased, due to globalization, the dynamics of national economies shifted dramatically. Democratic socialists began advocating for cooperatives and local economic initiatives as a counterbalance to the perceived negative impacts of globalization, such as income inequality and loss of local industry. This shows that democratic socialism has pragmatically adapted to deal with real issues.
In addition, there has been much technological advancement since the mid-20th century. In particular, the rise of the digital economy and the decline of traditional manufacturing jobs shifted the focus towards new forms of worker organization and ownership models. Democratic socialists began to think about technology-driven cooperatives and platform cooperatives. Now, the rise of artificial intelligence technologies will present similar challenges and call for pragmatic alternative approaches under the banner of democratic socialism.
Ideological Shifts and Practical Experiences
The fall of the Soviet Union and the visible economic difficulties in other centrally planned economies provided a strong case against heavy central planning. Democratic socialists began to critique central planning as a whole. This led democratic socialists to seek more flexible, decentralized models of socialism, such as economic democracy, which could incorporate market mechanisms alongside collective ownership and management.
The ascendancy of so-called neoliberal economic policies from the 1980s onward, emphasizing deregulation, privatization, and a reduced role for the state, prompted democratic socialists to explore and articulate alternative economic structures that could better address social needs without replicating the failures of both hardcore socialism and unfettered capitalism. Of course, there is no economy in the world that is anywhere near deregulated, wholly privatized in all aspects of provision of goods and services, or in which the state does not play a role - so there is no neoliberal economy per se. Nevertheless, concerns about globalization and increases in concentration of wealth sparked new ideas in relation to democratic socialism.
Learning from Success Stories
The success of Nordic/Scandinavian countries (in the current economic system) in combining robust welfare states with competitive capitalist economies (although in Europe most businesses are small to medium enterprises) provided a blueprint for how democratic socialism could adapt to modern economic realities. These nations exemplified how to blend market efficiencies with social welfare, influencing democratic socialists worldwide.
As well, there have been numerous successful implementations of cooperatives and community-driven economic models around the world. These successes have shown that economic democracy can be a viable way to organize production and distribution in a manner that promotes community well-being and resilience. Accordingly, pragmatic democratic socialists did not ignore these developments, and they became part of a resilient democratic socialist framework.
Theoretical Developments
No one can ignore new economic thinking. Economists and theorists within the democratic socialist spectrum, like Amartya Sen and Joseph Stiglitz, began to provide robust critiques of traditional economic models and championed alternative approaches that emphasize social equity, environmental sustainability, and economic democracy.
The the influence of ecological economics and feminist economics also influenced democratic socialism. These branches or critiques of economic thought have emphasized the importance of sustainability, community-oriented solutions, and the undervalued sectors of the economy, such as care work, all of which have informed democratic socialist thinking.
Political and Social Movements
The growth of grassroots movements concerned with issues like climate change, economic inequality, and social justice has also energized democratic socialism. These movements often advocate for decentralized, democratic forms of organization and ownership, aligning with the principles of cooperatives and economic democracy.
Nor did or could democratic socialism ignore the younger generation perspectives. As younger people face economic challenges like precarious employment and high housing costs, there is an increasing interest in alternative economic models - and democratic socialism took these concerns into account. Youth seek a fairer, more equitable society. This demographic shift refocused democratic socialist priorities towards innovative and sustainable solutions.
Concluding Remarks
In summary, the shift in democratic socialism from a traditional blend of socialism and capitalism to embracing concepts like cooperatives and economic democracy is a response to global economic changes. Also, ideological shifts, practical lessons from the past, the influence of new economic thought and critiques, and various grassroots movements also influenced the thinking of democratic socialists. This evolution reflects an ongoing attempt to create a more equitable and sustainable economic system that responds to the complexities of the modern world, which all good or progressive people have a concern with - the same applies to ideas now found in democratic socialism.
On the above ideas there remains and is much debate and discussion, including within the democratic socialist movement. It is about the best way to achieve goals related to these ideas. The overarching aim is to create a more just and equitable society that works for everyone, not just the wealthy few. Democratic socialism is no longer about merely mixing socialism and capitalism together. It goes much further in considering all manner of socio-economic endeavours by human beings, their sustainability of these endeavours, and general concerns regarding the environment and ecological systems, plus related aspects. Democratic socialism is an evolving concept.
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