What Is Socialism Today? Conceptions of a Cooperative Economy

60 Pages Posted: 24 Jan 2020

See all articles by John E. Roemer

John E. Roemer

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

Date Written: January 21, 2020

Abstract

Socialism is back on the political agenda in the United States. Politicians and some economists who identify as socialists, however, do not discuss property relations, a topic that was central in the intellectual history of socialism, but rather limit themselves to advocacy of economic reforms, funded through taxation, that would tilt the income distribution in favor of the disadvantaged in society. In the absence of a more precise discussion of property relations, the presumption must be that ownership of firms would remain private or corporate with privately-owned shares. This formula is identified with the Nordic and other western European social democracies.

In this article, I propose several variants of socialism, which are characterized by different kinds of property relation in the ownership of society’s firms. In addition to varying property relations, I include as part of socialism a conception of what it means for a socialist society to possess a cooperative ethos, in place of the individualistic ethos of capitalist society. Differences in ethea are modeled as differences in the manner in which economic agents optimize. With an individualistic ethos, economic agents optimize in the manner of John Nash, while under a cooperative ethos, many optimize in the manner of Immanuel Kant. It is shown that Kantian optimization can decentralize resource allocation in ways that neatly separate issues of income distribution from those of efficiency. In particular, remuneration of labor and capital contributions to production need no longer be linked to marginal-product pricing of these factors, as is the key to efficiency with capitalist property relations. I present simulations of socialist income distributions, and offer some tentative conclusions concerning how we should conceive of socialism today.

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

JEL Classification: D3, D6, P2, P5, H4

Suggested Citation

Roemer, John E., What Is Socialism Today? Conceptions of a Cooperative Economy (January 21, 2020). Cowles Foundation Discussion Paper No. 2220, January 2020, Available at SSRN: https://ssrn.com/abstract=3524617 or http://dx.doi.org/10.2139/ssrn.3524617

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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