I often hear socialists say that socialism is “democratic worker control of the means of production.” But is it really? In this essay, I’ll explain why it’s not, and why the issue of socialism vs. capitalism is a moral and political issue of property rights, rather than an economic issue of “modes of production.” Obfuscation and confusion aside, this ultimately holds true whether the socialism under consideration is classic Marxist socialism, “libertarian socialism,” or whatever other sort of socialism you want to name.
In a mostly capitalist country, like the US in the 1880s, there are many different kinds of business organizations: There are for-profit corporations, non-profit corporations, sole proprietorships, partnerships, credit unions, retailers’ cooperatives, consumers’ cooperatives, and employee cooperatives. That’s right, worker cooperatives can and do exist in what Karl Marx would call a “capitalist society.” Examples of consumers’ cooperatives include REI in the US and “The Co-op” in the UK. Examples of employee cooperatives include the Cheese Board Collective in Berkeley, California, the Rainbow Grocery Cooperative in San Francisco, and the Citybikes Workers’ Cooperative in Portland, Oregon. These latter three are companies where employees own and control the means of production in their company, democratically.
If “socialism” meant “worker control of the means of production,” as in a co-op, then people are perfectly free to have “socialist companies” under a laissez-faire capitalist government that protects private property rights.
Under the political system of capitalism, the founders or owners of a business–those who have invested money or effort into the business–determine what “mode of production” it will use. If the owners want to spend some time working for wages in the business, instead of devoting all their time to managing the business, then the business is “worker controlled,” in the sense that a subset of wage workers controls the business. If the founder of a business wants to pay his workers in stock, rather than wages, and they agree to that, then he can do that under capitalism, and the business is “worker controlled” to an extent. If a group of people want to get together, pool their funds, and form a cooperative that they work in and equally own, then they are free to do that as well.
So long as “socialism” is taken to mean a mode of production, people are perfectly free to live and work as “socialists” under a laissez-faire constitutional republic that protects private property rights. So such “socialists” should advocate for the political system that protects their right to live as they choose with any property they have produced or voluntarily traded for: a laissez-faire capitalist constitutional republic.
But no, in reality, socialists don’t want private property rights upheld by the government. This is what actually distinguishes them from advocates of capitalism. Their essential idea is a political one: private property rights are to be abolished. Workers should seize productive property from those who invested their time and money to build it, either through the “direct action” of organized union gangs, or through some type of formal government.
Recall that the Oxford English Dictionary definition of socialism is:
A political and economic theory of social organization that advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole.
In socialist practice, once productive property is seized from the creators, the union gangs or government will run the businesses “on behalf of the community as a whole.” After socialism is instituted, any new businesses that individuals have built will (or “should”) be taken over by the government or gangs, as soon as the entrepreneur attempts to hire any wage workers.
In Marxist theory, wage workers form a collective entity, or “class” called the proletariat. It is this class’s complete dominance in society–its collective control of all means of production–that is the defining characteristic of socialism. Individual workers banding together to manage their own companies, while leaving entrepreneurs or capitalists free to run other companies, is not how Marxian socialism works. Only if the “proletariat class as a whole” gets together, robs all entrepreneurs (“the bourgeois class”) of their creations and investments, and makes private ownership of the means of production effectively impossible, do we have socialism.
This Marxist class theory, with its blatantly false collectivism, and its materialistic and false Labor Theory of Value, serves as a pseudo-intellectual cover for the desires of envious non-achievers to smash and rob their betters. It’s a rationalization for a seething resentment of those who have earned great success and prosperity.
Socialism is not about workers getting together and starting their own companies. It’s about eliminating private property rights in order to forcibly seize what the most productive individuals in the society have produced. Morally, the essence of socialism is coercive injustice. I discuss the injustice that socialism perpetrates in more detail in this essay: “Why Socialism is Morally Wrong: The Basis of Property Rights.”