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A Design for Market Socialism

27 Pages Posted: 1 Jun 2017  

John E. Roemer

Yale University - Department of Political Science; Yale University - Cowles Foundation

Date Written: May 31, 2017

Abstract

Socialism is conceptualized as a society in which individuals cooperate, distinguished from capitalism, characterized as involving ubiquitous economic competition. Here, I embed a formal model of cooperation in an Arrow-Debreu model, using the Kantian optimization protocol, and define a Walras-Kant equilibrium, in which firms maximize profits, consumers choose demands for commodities in the usual utility-maximizing fashion, and the state rents capital to firms. The labor-supply decision of workers, however, is arrived at using the cooperative protocol. Incomes are redistributed through a flat income tax. Walras-Kant equilibria, with any desired degree of income equality exist, are decentralizable, and are Pareto efficient.

Keywords: Market socialism, General equilibrium, First welfare theorem, Cooperation, Kantian optimization

JEL Classification: D50, D59, D6, P2

Suggested Citation

Roemer, John E., A Design for Market Socialism (May 31, 2017). Cowles Foundation Discussion Paper No. 2090. Available at SSRN: https://ssrn.com/abstract=2978727 or http://dx.doi.org/10.2139/ssrn.2978727

John E. Roemer (Contact Author)

Yale University - Department of Political Science ( email )

Box 208269
New Haven, DC 06520-8269
United States
203-432-5249 (Phone)
203-432-6196 (Fax)

HOME PAGE: http://pantheon.yale.edu/~jer39/

Yale University - Cowles Foundation

Box 208281
New Haven, CT 06520-8281
United States

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