Diagnosis and Critique

The first part of Wright’s book develops a diagnosis and critique of capitalism. He begins by developing two criteria to judge any social order: social and political justice. A socially just society is one in which people have equal access to material resources and intangibles such as recognition. A politically just society is one in which people are able to participate meaningfully in decisions that affect their own lives, and their lives in the broader community.

He labels the combination of these two criteria “democratic egalitarianism” — “the broad normative foundation for the diagnosis and critique of existing institutions and the search for transformative alternatives.”

Potentially, these criteria could be used to assess a social order along any dimension. Yet capitalism is a central mechanism blocking the realization of social and political justice, and is the focus of Wright’s critique.

Capitalism, Wright argues, is a system of production and distribution defined by its main mechanisms of economic coordination (markets) and its main class relation (workers and capitalists). Capitalists gain profit by reaping the economic fruits that non-owning laborers produce. They realize this profit on markets in competition with other capitalists.

Because firms compete with one another, capitalists must accumulate profits and lower costs by introducing labor-saving technology. If they fail to do this, they will eventually be driven out of business. Both the inter- and intra-class relations of capitalism therefore create pressure to increase productivity and generate economic growth.

Wright’s central critique of capitalism is that its “class relations perpetuate eliminable forms of human suffering,” a very familiar argument from the Marxist tradition. While acknowledging that capitalism is a “growth machine,” he suggests that the wealth it produces is maldistributed. In short, the actual access that most people have to the means of human flourishing is radically different from what they could potentially enjoy.

Marx argued that capitalism was an unjust economic system and, over the long run, a doomed one. He thought the dynamics of capitalist reproduction tended to create ever more severe economic crises for two reasons.

In the short term, capitalist economies typically face problems of over-production and under-consumption. Since investment decisions are made privately, economic activity is coordinated by markets that operate behind the backs of individual firms. And because there is no social agent assuring equilibrium, there is no a priori reason to think that supply and demand will actually meet. Further, because capitalists have an interest in holding down wage costs, they tend to depress demand. These two mechanisms operate together to produce business cycles.

A more fundamental process works alongside this cyclical pattern. In the long term, the capital intensity of firms tends to increase because competition forces continual technological improvement. Such innovations reduce the proportion of value added by labor to manufactured goods and, therefore, the ratio of surplus value to overall value. In short, there is a tendency for the rate of profit to fall.

Not only does capitalism produce ever more acute economic crises, it also creates an agent that has both an interest in and the ability to overthrow this economic system: the proletariat. In the classic Marxian account, the size of the working-class population increases while its working conditions simultaneously become more homogenous. As capitalism weakens itself and strengthens its enemies, a revolutionary situation is generated.

Wright develops four main criticisms of this account: one focused on Marx’s theory of the objective dynamics of capitalism, two focused on Marx’s theory of class formation, and one focused on the notion of ruptural or revolutionary social transformation.

Marx, Wright argues, incorrectly suggests that capitalist crises will become progressively more severe. He finds three main problems with this contention. First, Marx and subsequent Marxists failed to recognize the extent to which the state can counteract the business cycle. Second, although “the rate of profit may be lower in the later stages of capitalist development than in earlier ones, there does not appear to be any long-term tendency for it to continue to decline within mature capitalist economies.” Finally, in his view the labor theory of value is not a coherent foundation for explaining the declining rate of profit.

Wright’s second main criticism of Marx’s theory of capitalist development concerns his theory of proletarianization. Wright points out that capitalist development has increased the number of contradictory locations within the web of class relations: those who have some interests in common with capitalists and some interests in common with workers.

Self-employment has increased rather than decreased in contemporary capitalism. Stock ownership has become relatively widespread, giving a wider share of the population a stake in capitalist relations of production. More households have become cross-class, with husbands and wives occupying positions on the class ladder. Finally, wage inequalities and job differentiations have increased at both the bottom and the top of the income distribution, thus belying the notion of homogenous working and capitalist classes.

As such, the capacity of the working class to act collectively has declined rather than expanded in contemporary capitalism. In addition, workers have been able to successfully pursue their interests within democratic capitalist states in a way that Marx could not have imagined. According to Wright, these arguments cast serious doubt on the extent to which the working class can be considered a revolutionary actor.

Wright’s final criticism of the Marxian theory of capitalist development focuses on its view of transition. His criticism here is tentative, but the basic argument seems to be that a determined revolutionary break with capitalism — which he calls “smashing capitalism” in “How to Be an Anticapitalist Today” — is likely to end in despotism.

As he writes:

[I]t . . . may be that the concentrated forms of political power, organization and violence needed to successfully produce a revolutionary rupture in existing institutions are themselves incompatible with those forms of participatory practice needed for meaningful democratic experimentalism in the construction of new emancipatory institutions.

Based on his critiques of the Marxian account, Wright attempts to develop an alternative strategy for thinking about socialism. While the Marxian account rests on “a deterministic theory concerning the key properties of the trajectory of capitalism,” Wright seeks to develop a concept of “structural possibility.” Instead of a “road-map” rooted in an ostensibly deterministic theory, Wright argues we need a “socialist compass” that “shows us the direction we want to go, and an odometer which tells us how far from our point of departure we have traveled.”

He begins by distinguishing among three forms of power (economic, political, social) that correspond to three domains of power (the economy, the state, civil society). In this typology, capitalism is a system in which the means of production are privately owned and investment decisions are determined by economic power. Statism is an economic system in which the means of production are owned by the state and the allocation of resources “is accomplished through the exercise of state power.”

Finally, socialism is an economic system in which “the means of production are socially owned and the allocation and use of resources for different social purposes is accomplished through the exercise of what can be termed ‘social power.’” This formulation breaks, according to Wright, with “state-centered socialism.” As he puts it, “the concept of socialism being proposed here is grounded in the distinction between state power and social power, state ownership and social ownership.”

Wright then identifies three directions in which social power “rooted in voluntary organization in civil society” might be extended to control “the production and distribution of goods and services.”

Social power can be used directly to make economic decisions. This is what happens in a fully developed socialist economy. Social power, alternatively, can be used to influence the state, which then becomes a mechanism for transmitting social power to the economy. Finally, social power can be used to influence the way economic power is used in the economy. This happens, for example, when unions influence investment decisions.

In this framework, social empowerment means extending the reach of associational power along one of these pathways: either directly, via state power, or via the economy.

Real Utopias

On the basis of this discussion, Wright makes a set of concrete proposals (real utopias) that might increase social power over the state and the economy.

Regarding the state, Wright distinguishes between three forms of democracy: direct democracy (referenda and town halls), representative democracy (the rule of representatives elected by suffrage), and associational democracy (the rule of organized groups). Social empowerment over the state, in Wright’s conception, means a deepening of democracy along each of these dimensions.

His main example of direct democracy is participatory budgeting, as practiced in Porto Alegre, Brazil. He also considers two proposals for deepening representative democracy: universal election vouchers and rule by sortition. The final form of democratic deepening that Wright discusses is the extension of associational democracy. According to this model, voluntary associations such as unions and community organizations could take over some of the functions of bureaucracy in implementing legislative decisions. The basic model of a deep associational democracy is the neo-corporatist arrangements of northern Europe.

From Wright’s perspective, all three of these strategies for deepening democracy can be understood as pathways to subordinating the state to civil society.

Regarding the economy, Wright discusses four extensions of social power: the social economy, an unconditional basic income, social capitalism, and the cooperative market economy.

The social economy refers to a way of producing and distributing goods through voluntary contributions. The key example here is Wikipedia, which has four key features: it is based on voluntary free contributions from collaborators, open and egalitarian participation, direct deliberative interactions among contributors, and democratic governance.

Wright’s second pathway to social empowerment in the economy is an unconditional basic income. The idea here is to provide a universal income above the poverty line to replace all entitlement programs. Such a mechanism increases the power of labor (organizationally and economically) and provides a stimulus for the development of the social economy and the cooperative economy.

The third pathway is social capitalism. This refers to a set of strategies for exercising social power directly on the capitalist economy. The key example of social capitalism is unions. Its most radical expression is the share-levy wage earner fund, in which corporations pay a portion of their taxes as shares to unions. Gradually, this process would shift control over firms and investment decisions from private owners to collective entities run by the working class.

The fourth pathway to social empowerment in the economy is what Wright calls the “cooperative market economy.” Cooperatives are democratically run enterprises that operate in a market environment. The key example here is the Mondragón Corporation, which began in northern Spain in the late fifties. Each of the individual cooperatives in the Mondragón federation is democratically run and nested within a larger organizational structure that can shift workers and resources from one enterprise to another as needed.

How do these proposals fit together? As Wright summarizes the logic, a “basic income can facilitate the formation of cooperatives and social economy enterprises; various forms of social capitalism can contribute to expanding the cooperative market economy; and all of these can increase the political will for new forms of participatory socialism.”

Transformation

Of course, the establishment of participatory socialism requires a theory and strategy of transformation. The final section of Wright’s book seeks to fulfill that need.

As he recognizes,

in order to advance democratic egalitarian ideals it is necessary to radically extend and deepen the weight of social empowerment within economic structures in capitalist societies, but any significant improvement in this direction will be a threat to the interests of powerful actors who benefit most from capitalist structures and who can use their power to oppose such movement.

The theory of transformation is supposed to explain how socialism as social empowerment is possible in the face of such resistance.

Wright distinguishes between two main strategies of transformation: those that involve a decisive rupture and those that “foresee a trajectory of sustained metamorphosis without any system-wide moment of discontinuity.” These evolutionary strategies include “interstitial transformation” that gradually undermines capitalism from within and “symbiotic transformation” that generates a positive-sum class compromise between workers and capitalists. It’s clear from the text that Wright prefers the last of these approaches.

The strategy of symbiotic transformation holds that social empowerment is most likely to be successful when it “helps solve certain real problems faced by capitalists and other elites.” The theoretical core of the strategy is that under particular conditions, there is a positive-sum relationship between the associational power of workers and the interests of capitalists.

At very low levels of working-class associational power, more working-class power threatens capitalist interests. At very high levels of working-class associational power, more associational power also threatens capitalist interests. But between these two levels, working-class associational power can positively affect capitalist class interests. This is because in a fully developed Keynesian class compromise, working-class associational power leads to high levels of capacity utilization and high demand for products. It is also useful in disciplining wage growth.

The fundamental problem with this strategy is that it is not clear it is a viable way to transcend capitalism. As the failure of the so-called Meidner plan in Sweden suggests, beyond a certain level further extensions of working-class associational power produce an automatic backlash from the capitalist class. Wright seems to recognize this limitation in his tentative and cautious conclusion:

What we are left with, then, is a menu of strategic logics and an indeterminate prognosis for the future. The pessimistic view is that this condition is our fate, living in a world in which capitalism remains hegemonic: systemic ruptures for a democratic egalitarian alternative to capitalism are extremely unlikely to every muster mass popular support within developed capitalist democracies; interstitial transformations are limited to restricted spaces; and symbiotic strategies when they are successful, strengthen the hegemonic capacity of capitalism. The optimistic view is that we don’t know what system challenges and transformative possibilities there will be in the future.

A Neo-Tocquevillian Marxism

Wright’s project is best understood as a form of neo-Tocquevillian Marxism. The basic elements of his critique of capitalism derive from Marx. But his image of socialism, as well as his political vision, is much more indebted to Tocqueville or Durkheim (although he discusses neither of these authors explicitly). This is clear both in his view of socialism as “social empowerment” rather than a mode of production, and in his preferred political strategy — which relies not on class struggle, but on broad social cooperation.

What are the strengths and weakness of this synthesis? Wright’s real utopias project makes two key contributions: it provides a refreshing and mostly compelling conceptualization of socialism, and it lays out a vision for radical politics that I believe is basically correct.

Wright’s first contribution is to provide a conception of socialism that distinguishes it from the legacy of authoritarianism. In his view, the purpose of the socialist project is to increase the weight of the “social” in determining resource allocation. The strength of this position is obvious. By emphasizing social power, Wright reestablishes the strong link between the associational tradition and socialism that classical Leninism broke. In doing so, Wright successfully reenergizes the socialist tradition for the post-communist era. This is a valuable contribution.

The second great strength of Wright’s book is that he provides a clear and compelling list of what the basic demands of radical politics in an advanced capitalist society should be. Chief among those should be a universal basic income that everyone would receive simply by virtue of citizenship. This would eliminate poverty, increase the bargaining power of labor, and give people the ability to experiment with enterprises in the cooperative economy. As a medium-term demand, Wright’s proposal seems very reasonable.

However, despite its strengths Wright’s real utopia framework suffers from one major and, given its author, highly paradoxical, flaw: it does not take adequate account of class. This flaw leads to three main problems: a radically incomplete conceptualization of socialism, a series of implausible assumptions about the nature of contemporary capitalism, and a tendency to consider social democracy a viable strategy for radical politics.

Images of Socialism

Let me begin with Wright’s understanding of socialism as social empowerment. Without any discussion of class, the connection between the extension of social control over the economy and socialism remains unclear. Wright says that “social empowerment over the economy means broad-based encompassing economic democracy” and that “’socialism’ is the term for the subordination of economic power to social power.” In my view, whether the subordination of economic to social power leads to “economic democracy” depends heavily on who wields social power and what they try to do with it.

To put the same point a little bit differently, I do not believe that “class power” corresponds in any straightforward way to Wright’s three forms of power: economic, political, and social.

Capitalists and landowners in particular have historically been very effective at using social power. There are numerous examples of firms and agribusinesses cooperating to share technology, to control output and prices, to establish long-term relations with suppliers, to lobby the government to pursue their interests, or to exclude politically undesirable workers.

Therefore, it’s important to emphasize that the relevance of social power for socialism depends on the class that wields that power. Without this sort of specification, there is little reason to think that the extension of social power by itself is likely to lead to socialism or to even move society in the direction of socialism. As such, there is little reason to adopt it as a normative project. In doing so, Wright reproduces one of the main weaknesses of the Tocquevillian tradition: an uncritical embrace of “civil society” without an adequate specification of the way that class power shapes its political valence.

There is an additional problem with Wright’s concept of social empowerment. Associational power is not necessarily an independent source of power, but can be produced and conditioned by economic power. Capitalists can rather easily convert their resources into associational power.

As Wright notes, “the primary way that production in the social economy is financed is through charitable giving.” But a substantial part of charitable giving comes from capitalists, and indeed may serve to reproduce or bolster capitalist class power. Given this, social empowerment as Wright defines it is potentially compatible with the strengthening of capitalist class power.

Despite these problems, Wright’s core idea about socialism is still sound. But it needs greater specificity. The aspect of “social power” that really appears to attract Wright is deliberation. In discussing the concept of Empowered Participatory Governance in Envisioning, he argues that social empowerment is important because it is a way of rationalizing decision-making. From this perspective, the extension of social power is not really a value in itself but a means to establishing a rational society — and I believe that socialism is nothing if not a rational society.

Using Wright’s formulation, then, it is possible to recast socialism as Iván Szelényi describes it: a system of rational redistribution in which the allocation of the social surplus is legitimated through substantive rationality.

However, whereas Szelényi’s understanding of substantive rationality is embodied in the teleological doctrine of Marxism-Leninism, Wright’s conception is guaranteed by deliberative procedures. Only such procedures can guarantee substantively rational decisions in the sense that they are the product of a dialogue supported by reasons and evidence.

Socialism, therefore, is a system in which the allocation of the social surplus is determined not behind the backs of social actors, but according to agreements based on public discussions governed by the rules of rational critical discourse.

While it preserves the idea of socialism as based on deliberation, this formulation has two main advantages over Wright’s.

First, it makes clear that socialism requires not just an extension of “social power” but also the elimination of class power. Deliberative bodies only really work as designed where there is a fundamental homogeneity among participants so that debate unfolds according to reason, and not as the clash of pre-constituted interests. Socialism as “rational redistribution” can exist only where there is fundamental homogeneity of class interests in deliberative bodies. The extension of social power would mean the extension of deliberation only under these conditions.

Second, this characterization of socialism provides a much clearer foundation for the connection between democracy and socialism than that offered by Wright.It is not that there are two demands rooted in fundamental normative commitments: democracy and socialism. Rather, because decision-making can be rationalized only through a process of deliberation and socialism is a system of rational redistribution, it must necessarily include many deliberative institutions.

Images of Capitalism

Wright’s neglect of class is also evident in his conception of capitalism, particularly his view of its probable trajectory. It might seem surprising to object to Wright’s theory of trajectory since he explicitly denies the existence of one. A close examination of his book, however, reveals strong implicit views about the future development of capitalism as well as the relationship between capitalism and the state.

For Wright, capitalism is a “growth machine.” Capitalists tend to innovate in order to reduce unit costs and increase their profits because they face competitive pressures from other capitalists. If they fail to innovate, their businesses will be eliminated. This is an uncontroversial definition of capitalism, and it is a good summary of capitalism’s recent and not-so-recent history. But importantly, Wright’s position entails a belief in capitalism’s ongoing economic dynamism.

The notion that capitalism will continue to be a highly productive economic system also underlies Wright’s critique of ruptural transformation, or “smashing capitalism.” Among other reasons, Wright rejects ruptural transformation as a political strategy since it cannot avoid damaging the material welfare of the “median person.” Embedded in this claim is the idea that absent a transition to socialism that level of welfare will continue to rise. Wright thinks capitalist economies will continue to generate substantial economic growth into the foreseeable future and that this economic growth will tend to increase the material welfare of the masses.

Wright also has a strong theory of the relationship between states and capitalism. For him, one of the key reasons why Marx’s theory of crisis is wrong is because he underestimated the extent to which states can counteract business cycles.

Furthermore, in his view Marxists and radical anarchists alike have failed to appreciate the relative autonomy of the state from capitalist class interests. This gives it the capacity to intervene in economic processes and “risk the continual politicization of the capitalist economy.”

As such, “there is unlikely ever to be a stable, sustainable equilibrium in the articulation of capitalist state power and the capitalist economy; the trajectory over time is more likely to involve episodic cycles of regulation/deregulation/reregulation.” Therefore, the state will continue to act in the future as it has in the past, periodically deregulating and then re-regulating capitalist production.

A tendency toward long-term growth and a state that is independent enough from the capitalist class to counteract the business cycle, but also tends to politicize economic issues: this is Wright’s basic vision of the “history of the future of capitalism.”

It is worth asking where this vision comes from. One could argue that this image of capitalism projects a highly specific period of economic history (the long postwar boom from 1945–1975) into the indefinite future. This period, however, was characterized by a highly specific balance of class forces. The working class was relatively strong in those years, which limited the production of absolute surplus value and dramatically boosted productivity.

Further, one might suggest that the labor’s relative power was another major reason for the emergence of a relatively autonomous state. If these propositions are correct, then we should ask ourselves whether the capitalism of the future is going to resemble the capitalism of the postwar boom years.

One does not have to be a millenarian to doubt whether this is the case (at least in the US and Europe). Over the last thirty years, capitalism’s basic economic performance has not remotely corresponded with its ideological triumph.

The fossil-fuel infrastructure established in the postwar period has not been fundamentally transformed. The “new economy” keeps failing to appear. Who now remembers that Japan and northern Italy were supposed to have established a fundamentally new model of economic growth called “flexible specialization”? What is left of the idea that information technologies would open up a new frontier of productivity and prosperity? Where is biotechnology, or the green economy?

Wright’s work suggests one important reason for this distinctively unimpressive economic performance: the disintegration of the working class as a coherent actor. It is worth remembering that for Marx, class formation was never simply a sociological add-on to his basic account of capitalist development. Instead, class formation and class struggle played a key role in his description of the system’s dynamics.

By placing limits on the extension and intensification of the working day, class formation (unionization in particular), in addition to competition, was central to the shift from absolute to relative surplus value and therefore economic growth. If working-class associational power has been decisively weakened in recent decades, one would expect this to have a negative impact on growth and productivity.

Wright’s neglect of class, to summarize, doesn’t just distort his view of socialism — it also blurs his vision of capitalism. For Wright, capitalism is a timeless economic system, not one that has a specific history marked by sharp changes in the relative balance of class forces. Concretely, this means he tends to project the social conditions of the long postwar boom into an indefinite future, without acknowledging their specific historical underpinnings.

The Problem of Transformation

This understanding of capitalism has very important political consequences. The most striking impact of Wright’s neglect of class is in his approach to strategy, the real focus of “How to Be an Anticapitalist.”

Wright’s political instincts are obviously quite radical, but his strategic recommendations are woefully inadequate. The basic problem is that Wright tells us nothing about what is still the central task of any viable strategy for winning socialism: destroying the entrenched political and economic power of the capitalist class. Without some plausible strategy for at least decisively weakening the power of private owners of the means of production, it is unclear how a generous basic income or any of his other real utopias could be established.

It is perhaps unfair to blame Wright for the weakness of his strategic recommendations. Far from being an intellectual failing, this clearly reflects existing political circumstances. But there is more to it than this. Wright’s account of strategy is marred by an enervating social-democratic orientation that leads away from a real engagement with the revolutionary socialist tradition.

This is most evident in the contrasting discussions of ruptural and symbiotic transformations in his book on real utopias. Most of the short chapter on ruptural transformations is a critique based on the premise that they are unlikely to be in the material interests of the majority of the population. By contrast, Wright’s long and sympathetic chapter on symbiotic transformations devotes exactly one paragraph to critiques of social democracy.

This distribution of attention is surprising, because ruptural transformations are the only examples of successful transitions to non-capitalist societies, however authoritarian they may have been. In contrast, social democracy and anarchism are, from the perspective of achieving socialism, clear examples of failure.

Wright avoids recognition of this obvious fact by transforming societies from articulated wholes into hybrid structures combining elements of socialism, capitalism, and statism. From this point of view, even the US counts as “partly socialist.”

He is of course correct that it is difficult empirically to establish the limits of reform. But it would seem that a serious attack on property is an obvious one. In the interwar period, the examples of Italy and Spain stand as stark reminders of the ultimate limits of socialist reform under a normal parliamentary regime. More recently, the failure of the Meidner plan to give workers a direct say in investment decisions triggered a successful backlash by the Swedish capitalist class. In the face of these historical examples, it seems unlikely that a participatory socialist society could ever be established without a transformative strategy that includes, but is not restricted to, a decisive rupture.

We need to engage with and extend the revolutionary Marxist tradition — not reject it. In this connection, it’s worth noting that “How to Be an Anticapitalist Today” distorts one of the central messages of this line of thought.

The expression “smashing capitalism” appears nowhere in the work of Gramsci, Lenin, Luxemburg, or Trotsky. Indeed the term would have seemed absurd to them, since they were determined to build on capitalism’s substantial economic achievements. What Lenin called for was smashing the state, an expression meant to emphasize the structural relationship between states and capitalist property relations. Socialism would be constructed within a new political order, the result of a more extended and less punctual process than political revolution per se.

But given the history of socialist movements in capitalist states, Wright’s deletion of the revolutionary moment (or some functional equivalent) fails to convince. The inauguration of socialism will not resemble the introduction of an invasive species for the simple reason that capitalist economies, unlike eco-systems, are backed by political institutions that are specifically designed to eliminate such species as soon as they begin to threaten the system.

As such, the strategy of eroding capitalism requires a prior political break — a decisive confrontation with the capitalist state. To realize Wright’s real utopia, then, an approach informed more by military strategy and less by biology seems requisite.