Dreaming of “liberal socialism”

In September the former Greek minister of finance and self-described “libertarian Marxist” Yanis Varoufakis published his vision of a post-capitalist world in his new book, Another Now. He has explained that his motivation for writing the book stems from his belief that Marxists have yet to set out a detailed plan for how a socialist economy and society might function, dismissing from the outset a return to post-war social democracy and what he calls “Soviet-like barracks socialism.”

Despite this strange unwillingness to seriously engage with the history of the past century, there is still much to recommend about Varoufakis’s blueprint.

The labour market is to be abolished and replaced with an eco-system of “corpo-syndicalist” firms that are owned on a workers’ co-operative basis, where every individual owns a single non-transferable share. Central banks are to issue every citizen with a bank account, facilitating their ability to receive a dividend payment from the company they work for along with a universal basic income. Value-added tax and income tax would be abolished and replaced with a 5 per tax on company revenue. To avoid international balance of payments crises, all trade and movement of funds between countries would be denominated in an international unit of account, and trade imbalances would incur fines.

So far, so promising; but, as with so many “libertarian socialist” visions of the past, there are some major problems with Varoufakis’s conception.

First and foremost, any imagined “socialism” must be considered within the context of existing material conditions. As a Marxist, Varoufakis should know that the dictatorship of the proletariat is a purely practical proposition, and that the state cannot be neutral. The idea that a parliament can pass legislation on corporate governance and the ownership class will simply allow their private control over wealth-producing processes to be socialised into co-operatives makes his path to “feasible socialism” naïve to the point of absurdity.

Secondly, his insistence on discarding “authoritarian” state involvement from the outset leaves his system as essentially “socialism without a rational plan.” His “corpo-syndicalist” firms would be operating in a market economy ruled by the “anarchy of production” problem. Worker-owners would predictably compete as best they could to maintain and expand their market position by working longer hours and automating production while suppressing their own wages, just so that they could afford to work even longer hours and hope to put their competitors out of business, all while trying to secure the cheapest input commodities from abroad and eventually becoming monopoly market players.

Were co-operative ownership simply to be generalised you would have a situation where—as with capitalist firms today—some corpo-syndicalist companies would be highly profitable and enjoy high barriers to entry, offering good pay and benefits to their worker-owners, while the majority of such firms would offer low-wage service-sector jobs, resulting in new stratifications of society, albeit not based on different social relations to the means of production but on degrees of personal access to jobs in the most profitable regions and corporate sectors.

Finally, Varoufakis proposes a payment system in which each worker-owner in each firm is given a stock of 100 “merit points,” which they can award to their colleagues directly—taking into consideration how hard they have worked for the company during the year and therefore deciding how large their company bonus will be. As he says, “if three per cent of a firm’s overall merit points are awarded to, say, Harriet, Harriet collects three per cent of the firm’s total bonus fund.”

Here we must be charitable and assume that he has simply never worked in a company before. The idea that even in a middle-sized productive unit of several hundred people you would be intimately familiar with, and capable of assessing, every other worker’s level of dedication and industriousness is frankly laughable. This strikes me as being comparable to the neo-classical assumption that every consumer in the world obtains perfect market knowledge before they make a purchase.

Such “liberal socialist” and “market socialist” visions, at first glance, appear to offer both the liberty of personal choice and socialist construction. However, and I think most damningly, despite “left communists” and anarchists having all the mental space in the world to be as utopian and unmoored from our present material reality as they can be, their dreams end up squandering the whole point of socialism anyway: freedom. That is to say, the creation of an economy where every step forward in our collective knowledge and productive capacity results not in more but less necessary labour for the reproduction of the whole of society, and more time for leisure, research, discovery, and the enjoyment of a meaningful life.