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Mainstream, Vol XLVI, No 14

Defining Socialism

Saturday 22 March 2008, by D G Bokare



CPI leader and former Union Agriculture Minister Chaturanan Mishra, in his article “Need to Redefine Socialism after the Collapse of the Soviet Union” (Mainstream, Annual 2007), called for a discussion on the subject. The following is one contribution. —Editor)]

Mainstream has always taken a lead to invite new ideas, suggestions and debate on some vital social and economic issues to guide the future generations. Chaturanan Mishra has done this in the past too. I appreciate him for looking afresh to define or redefine socialism particularly after the collapse of the Soviet Union. Some of the articles published earlier in Mainstream had touched this issue, though indirectly.

Let me clarify as to what we expect from socialism. Socialism should offer us a society (1) free of dictatorship and autocratic bureaucracy, (2) total freedom to all citizens to productively apply the creative and competitive capabilities gifted by nature, (3) right atmosphere to enjoy the fruits of natural wealth made available by nature, (4) political and economic equality among all the citizens of the country, (5) education to understand rules and regulations of the social order for peacefully living with others, (6) maintain ecological balance all the time while enjoying natural wealth, and (7) enjoy freedom to express thoughts to improve the quality of living. In short, we expect a class-less and exploitation-less society.

If we accept these parameters for building a socialist structure for the welfare and progress of human society, we need to find out the economic and political systems for developing foolproof checks and balances. Economic systems must be backed by economic theory. Likewise the political systems should be guided by Raj Dharma. The King (President/Prime Minister) must be an ideal person, and his civil servants should be faithful to him.

Karl Marx says that laws, which divide the people, are reactive and irrational. Therefore, these are against natural laws; and hence, they are immoral. Immoral cannot be immortal. This guidance needs to be applied while building a socialistic society.

THE new social order has to be radically different when compared with today’s capitalism or Marx’s socialism. It must meet the expectations of a majority of citizens. There has to be minimum interference from the state in the social and economic systems. The following could be listed as the essential prerequisites for such a society:

1. Every citizen must be allowed to earn his income from hard work for leading a decent life. Profit (surplus value, a la Marx) must be retained by each such entrepreneur. Each entrepreneur will be treated as owner-cum-worker. Capitalists as a class will, therefore, have no place in such a society. This is self-employment-based economic system. The present-day employer-employee relations would disappear permanently. There will not be any kind of unemployment. There will not be any class conflict.

2. He must be supported by the state to meet this aspiration by developing support systems (mainly technological and financial) and required infrastructure. The state must give financial support with zero rate of interest. This presently exists in Islamic economies. Lord Keynes, Paul Samuelson and many other well-known economists have supported this at some time or the other. The private sector finance provider will have no chance to exploit citizens and would disappear from the scene, as they won’t be able to compete with the state in this aspect.

3. Free competition and proprietary capital will be the basic foundation of such a society. Free competition will be regulated by the state to protect manipulations by an individual or a group of individuals (monopolists, cartels, etc). In socialism products are the outcome of labour activity. Labour must receive full benefits (surplus value) as the sole owner of production. Today we find confusion in the minds of many leading economists about ‘free competition’ in the economy. Market economy, free market economy, competitive economy, free competition and similar phrases are used to mislead the masses. However, all the textbooks of economics have defined competition and monopolies. Repealing all the monopoly laws (for example, joint stock companies with limited liabilities, patents, copyrights, trademarks, brands, trade unions, etc.) will be essential to achieve our goal of socialism.

4. Price theory will be the most important element of such a system. Price will be decided in the marketplace by the forces of supply and demand. There will not be any one person or a group of persons who would decide or influence the prices or quantities coming in the market. Since competition will be in place in the economy, competitive forces will bring down the prices of products and services over a period of time and simultaneously improve the quality of the same. The economy will experience abundance instead of the present-day contrived scarcity of products. This will strengthen the local currency and make the prices of tomorrow’s products lower than today. Downward moving prices will be seen as a trend over a long period. This will help consumers to postpone their non-essential wants. Consumerism will thus get reduced.

5. Loans with zero rate of interest provided by the state, freedom from manipulations by monopolistic powers, while in competition and state-regulated free competition, would evolve a new socialist economy. This will be supported by political and economic equality. This will therefore eliminate chances of any exploitation or class conflicts.

6. The state will keep with itself the production activities (for example, railways, power generation, defense production, etc.) requiring huge capital investments and meeting the social needs of essential products. However, public sector companies will also not be free from competition with private enterprises and the prices of their products would be decided only by market forces. Eventually the prices of products of public as well as private sectors would, as an effect of free competition, be close to the actual cost of production. Repealing monopoly laws will demolish capitalism automatically.

The experiment of land reform in West Bengal has been successful. Farmers are now the owners of their instrument of production and making a living out of those for self and their families. They are self-employed entrepreneurs of a kind. They retain entire surplus values derived from their own labour. They are not wageworkers as is seen in capitalistic and Marxian economies. They are owners-cum-workers. They are free from class conflicts. In reality, the experiment is against the very philosophy of Marx himself. Marx was against small farmers and small industrial units. He believed more in wageworkers for the convenience of organising them for the revolution. While doing this he did not recognise farm labourers in his schemata of socialism. Farming activity will thus be sustainable. It will not be for profit but for living. The same could have been thought of by the State Government in the case of small industrial units. This would help the state to have a totally decentralised economy.

Dr M.G. Bokare says:

If small property owners in the land are good against monopoly landlords in the Communist Party’s movement, the same logic should be good for the industrial sector. However, Communist Parties do not organise small-scale industrialists who have to face the economic burden of monopolistic industries. In small industries, the Communist Party faces a dilemma. Their wageworkers must be protected. This stand does not suit the small industrialists. The Communist Parties also cannot argue to protect the small industrialists from the burdens of monopolistic industrialists. If they do so, the wageworkers would doubt the sympathy of the party.

This situation will disappear when all the monopoly laws are repealed in the economy. There won’t be any wageworkers nor any capitalists in the new socialism. Since all the able people start their own productive activities in the economy, there won’t be any ‘reserve army’, as envisioned by Marx.

The above steps will offer the benefits of socialism as under:
- 1. Full employment for all able-bodied persons.
- 2. Surplus value or profit from productive activities will be fully retained by producers-cum-workers.
- 3. Downward moving prices will eliminate inflation from the economy.
- 4. State-regulated competition will make the economy constantly dynamic.
- 5. Exploitation and class conflicts will disappear permanently.
- 6. Ecological balance will be maintained all the time.
- 7. Peaceful co-existence with other economies will be possible.
- 8. Business cycle as witnessed in capitalist economy will disappear.
- 9. Poverty will have no place in the economy.
- 10. An ideal omnipotent state without coercive force will be in existence.
- 11. Elimination of taxes over time will be possible.

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