Sunday May 31

Erik Olin Wright and Anticapitalism

In light of global dissatisfaction with neoliberal economic arrangements and the desperate concern for the environmental health of the planet, is now the time for an anticapitalist strategy? To this point, Erik Olin Wright, the well-known sociologist and scholar, analyzes four anticapitalist models: smashing capitalism, taming capitalism, escaping capitalism, and eroding capitalism.

For Wright, not all of the examined models are optimal for implementation for an anticapitalist form of social justice. While anticapitalism, for Wright, must be the new tool of resistance, it must also then, reconstruct a democratic market serving, first and foremost, the needs of people. Here are the following anticapitalist models developed by Erik Olin Wright.1

Smashing Capitalism

Given the way capitalism devastates the lives of people and its class domination protecting elites and protecting the interests of the 1%, the idea of “smashing capitalism” is understandable. The argument that Wright poses is that the system is corrupt; reform will eventually fail. Periodically small reforms that improve the lives of people may be possible with popular support, but such improvements are contingent and subject to change. The tactics behind the “smashing” are generally initiated through class struggle. Moreover, the idea that capitalism can be rendered a benign social order to which ordinary people benefit is a delusion. The rational alternative is to abandon such an anti-democratic economic model and then reconstruct a democratic alternative. This is an uphill battle in which the dominant classes will fabricate illusions of class envy and the “vilification” of the 1%. Their tactics will be to subvert the revolutionary goal of a democratic market, an anticapitalist revolutionary theory.

Capitalism, for Wright, is also a deeply contradictory system, prone to disruptions and crises. At times those crises reach an intensity which makes the system as a whole vulnerable. In the strongest versions of the theory, there are underlying tendencies intrinsic to capitalism which, if left to its own devices, destroys its own conditions of existence, the capitalists as Marx argues, “become their own gravediggers.” But even if there is no systematic tendency for crises to intensify, what can be predicted is that periodically there will be prolonged, capitalist economic crises in which the system becomes vulnerable which in turn harms others. Case in point, Marx’s “Overproduction Underconsumption” theory argued in Kapital demonstrates how workers and consumers are expendable when the market experiences a downcycle. The result is the loss of jobs and income lost to offset the loss of revenue.

This approach, smashing capitalism, provides the context in which a revolutionary party can lead a mass mobilization to seize state power, either through elections or through a violent overthrow of the existing regime. Once in control of the state, the first task is to refashion the state itself into a suitable weapon of socialist transformation, and then use that power to repress the opposition of the dominant classes and their allies, dismantle the pivotal structures of capitalism, and build the necessary institutions for an alternative economic system. This stimulated the imagination of revolutionaries giving their struggles with optimism and hope, in particular, revolutionary Marxists. It not only provided a potent indictment of the world as it existed, but also a plausible scenario for how an emancipatory alternative could be realized.

Such struggles rarely culminated in the revolutionary seizure of state power, and when seized, too often resulted in the immediate absence of democratic egalitarianism. Such revolutions, as Wright argues, were never the creation of a democratic, egalitarian, emancipatory alternative to capitalism. While revolutions in the name of socialism and communism did demonstrate that it was possible to create Marx’s “new man,” and in certain specific ways improved the material conditions of most people for a period of time, the evidence of the heroic attempts at rupture in the twentieth century is that they do not produce the kind of new world envisioned in revolutionary ideology. It is one thing to be liberated from injustice and yet quite another to construct a new and just democratic order.

Why the revolutions of the twentieth century never resulted in robust, sustainable human emancipation is, of course, subject to interpretation. Some argue that the failure of revolutionary movements was due to the historically specific, unfavorable circumstances of the attempts at system-wide ruptures. For example, fledgling revolutions in peripheral and semi-peripheral countries were surrounded by powerful enemies who sought to undermine the success of revolutionary change. Some argue that revolutionary leaders made strategic errors, while others indict the motives of leadership: the leaders that triumphed in the course of revolutions were motivated by desires for status and power rather than the empowerment and well-being of the masses.

Whatever the case might be, others argue that failure is intrinsic to any attempt at revolutionary change in a social system since there are too many “moving parts,” too much complexity, and too many unintended consequences. As a result, attempts at “system rupture” will apparently tend to unravel into such chaos that revolutionary elites, regardless of their motives, will be compelled to resort to pervasive violence and repression to sustain social order. Such violence, in turn, destroys the possibility for a genuinely democratic, participatory process of building a new society.

Whether these explanations are correct, the evidence from the revolutionary tragedies of the twentieth century shows that smashing capitalism alone, for Wright, does not necessarily work as a strategy for social emancipation. Nevertheless, the idea of a revolutionary rupture with capitalism has not completely disappeared. Even if it no longer constitutes a coherent strategy of any significant political force, it speaks to the frustration and anger of living in a world of such sharp inequalities and a political system that is increasingly undemocratic and unresponsive.

Taming Capitalism

An alternative to smashing capitalism is taming capitalism in Wright’s construct. This is the central idea behind the anticapitalist currents within the left of socialdemocratic parties. The argument is that capitalism, when left to its own devices, is destructive. It generates levels of inequality that undermine social cohesion. Capitalism destroys traditional jobs and leaves people to fend for themselves. It creates uncertainty and risk for individuals and whole communities and harms and the environment. These are all consequences of the inherent dynamics of a capitalist economy. Nevertheless, it is possible to build counteracting institutions capable of significantly neutralizing these harms. Capitalism does not need to be left to its own devices; it can be tamed by well-crafted state policies.

To be sure, this may involve sharp struggles since it involves reducing the autonomy and power of the capitalist class, and there are no guarantees of success in such struggles. The capitalist class and its political allies will claim that the regulations and redistribution designed to neutralize these alleged harms of capitalism will destroy its dynamism, cripple competitiveness, and undermine incentives. Such arguments, however, are simply self-serving rationalizations for privilege and power. Capitalism can be subjected to significant regulation and redistribution to counteract its harms and still provide adequate profits for it to function. To accomplish this requires popular mobilization and political will; one can never rely on the enlightened benevolence of elites.

With the right circumstances, it is possible to win these battles and impose the constraints needed for a more benign form of capitalism. The idea of taming capitalism does not eliminate the underlying tendency for capitalism to generate harms; it simply counteracts their effects. This is like a medicine which effectively deals with symptoms rather than with the underlying causes. Sometimes that is good enough. Parents of newborn babies are often sleep-deprived and prone to headaches. One solution is to take an aspirin and cope; another is to get rid of the baby. Sometimes neutralizing the symptom is better than trying to get rid of the underlying cause.

Known as the “Golden Age of Capitalism”—roughly the three decades following World War II—social-democratic policies, specifically in those locations where they were most thoroughly implemented, did a fairly good job at moving in the direction of a more humane economic system. Three clusters of state policies in particular significantly counteracted the harm of capitalism: serious risks—especially around health, employment, and income —were reduced through a fairly comprehensive system of publicly mandated and funded social insurance.

The state provided an expansive set of public goods (funded by a robust tax system) that included basic and higher education, vocational skill formation, public transportation, cultural activities, recreational facilities, research and development, and macro-economic stability. And finally, the state created a regulatory regime to curb the most serious negative externalities of the behavior of investors and firms in capitalist markets—pollution, product and workplace hazards, predatory market behavior, and so on. These policies did not mean that the economy ceased to be capitalist: capitalists were still basically left free to allocate capital on the basis of profit-making opportunities in the market, and aside from taxes, they appropriated the profits generated by those investments to use as they wished.

What had changed, according to Wright, was that the state took responsibility for correcting the three principle failures of capitalist markets: individual vulnerability to risks, under-provision of public goods, and negative externalities of private profit—maximizing economic activity. The result was a reasonably well-functioning form of capitalism with muted inequalities and muted conflicts. Capitalists may not have preferred this, but it worked well enough. Capitalism had, at least partially, been tamed. That was the Golden Age—a faint memory in the harsh first decades of the twenty-first century. Everywhere today, even in the strongholds of Northern European social democracy, there have been calls to roll back the “entitlements” connected to social insurance, reduce taxes and public goods, deregulate capitalist production and markets, and privatize state services. Taken as a whole, these transformations go under the name of “neoliberalism.”

A variety of forces have contributed to the diminished willingness and apparent capacity of the state to neutralize the harms of capitalism. Globalization has made it much easier for capitalist firms to move investments to places in the world with less regulation and cheaper labor, while the threat of capital flight, along with a variety of technological changes, has fragmented and weakened the labor movement, making it less capable of resistance and political mobilization. Combined with globalization, the increasing financialization of capital has led to massive increases in wealth and income inequality.

Instead of being tamed, capitalism has been unleashed. Perhaps the three decades or so of the Golden Age were just an historical anomaly, a brief period in which favorable structural conditions and robust popular power opened up the possibility for the relatively egalitarian model. Before that time capitalism was a rapacious system, and under neoliberalism it has become rapacious once again, returning to the normal state of affairs for capitalist systems. Perhaps in the long run capitalism is not tamable. Defenders of the idea of revolutionary ruptures with capitalism have always claimed that taming capitalism was an illusion, a diversion from the task of building a political movement to overthrow capitalism.

But perhaps things are not so dire. The claim that globalization imposes powerful constraints on the capacity of states to raise taxes, regulate capitalism, and redistribute income is a politically effective claim because people believe it, not because the constraints are actually that narrow. In politics, the limits of possibility are always in part created by beliefs in the limits of possibility. Neoliberalism is an ideology, backed by powerful political forces, rather than a scientifically accurate account of the actual limits we face in making the world a better place. While it may be the case that the specific policies that constituted the menu of social democracy in the Golden Age have become less effective and need rethinking, taming capitalism remains a viable expression of anticapitalism.

Escaping Capitalism

One of the oldest responses to the onslaught of capitalism has been to escape. Escaping capitalism, for Wright, may not have been crystallized into systematic anti-capitalist ideologies, but nevertheless it has a coherent logic: capitalism is too powerful a system to destroy. Truly taming capitalism would require a level of sustained collective action that is unrealistic, and anyway, the system as a whole is too large and complex to control effectively. The powers-that-be are too strong to dislodge, and they will always coopt opposition and defend their privileges. “You can’t fight city hall” as it were.

The optimal strategy is to insulate ourselves from the damaging effects of capitalism, and perhaps escape altogether its ravages in some sheltered environment. This impulse to escape is reflected in many familiar responses to the harms of capitalism. For example, the movement of farmers to the Western frontier in nineteenth-century United States was, for many, an aspiration for stable, self-sufficient subsistence farming rather than production for the market. Escaping capitalism is implicit in the “hippie” motto of the 1960s, “turn on, tune in, drop out.” The efforts by certain religious communities, such as the Amish, to create strong barriers between themselves and the rest of society involved removing themselves as much as possible from the pressures of the market.

The characterization of the family as a “haven in a heartless world” expresses the ideal of family as a noncompetitive social space of reciprocity and caring in which one can find refuge from the heartless, competitive world of capitalism. Escaping capitalism typically involves avoiding political engagement and certainly of collectively organized efforts at changing the world. Especially in the world today, escape is mostly an individualistic lifestyle strategy. And sometimes it is an individualistic strategy dependent on capitalist wealth, as in the stereotype of the successful Wall Street banker who decides to “give up the rat race” and move to Vermont to embrace a life of voluntary simplicity while living off of a trust fund amassed from capitalist investments.

Because of the absence of politics, it is easy to dismiss the escaping capitalism strategy, especially when it reflects privileges achieved within capitalism itself. It is hard to treat the wilderness hiker who flies into a remote region with expensive hiking gear in order to “get away from it all,” as a meaningful expression of opposition to capitalism. Still, there are examples of escaping capitalism that do bear on the broader problem of anticapitalism. Intentional communities may be motivated by the desire to escape the pressures of capitalism, but sometimes they can also serve as models for more collective, egalitarian, and democratic ways of living. Certainly cooperatives, which may be motivated mainly by a desire to escape the authoritarian workplaces and exploitation of capitalist firms, can also become elements of a broader challenge to capitalism.

The “Do It Yourself” movement and the “sharing economy” may be motivated by stagnant individual incomes during a period of economic austerity, but they can also point to ways of organizing economic activity that are less dependent on market exchange. And more generally, the lifestyle of voluntary simplicity can contribute to broader rejection of consumerism and the preoccupation with economic growth in capitalism. Fleeing from the complexities and even injustices associated with capitalism will, in the long run, fail to address the deeper structural issues that could in fact return to promote worse outcomes from prior experiences. Not addressing this potential problem could be disastrous.

Eroding Capitalism

The fourth form of anticapitalism is the least familiar, eroding capitalism. It is grounded in the following idea: all socioeconomic systems are complex mixes of many different kinds of economic structures, relations, and activities. For Wright, no economy has ever been—or ever could be—purely capitalist. Capitalism as a way of organizing economic activity has three critical components: private ownership of capital; production for the market for the purpose of making profits; and employment of workers who do not own the means of production.

Existing economic systems combine capitalism with a whole host of other ways of organizing the production and distribution of goods and services: directly by states; within the intimate relations of families to meet the needs of its members; through community-based networks and organizations; by cooperatives owned and governed democratically by their members; though nonprofit market-oriented organizations; through peer-to-peer networks engaged in collaborative production processes; and many other possibilities. Some of these ways of organizing economic activities can be thought of as hybrids, combining capitalist and non-capitalist elements; some are entirely non-capitalist; and some are anticapitalist. We call such a complex economic system “capitalist” when capitalist drives are dominant in determining the economic conditions of life and access to livelihood for most people. That dominance is immensely destructive.

One way to challenge capitalism is to build more democratic, egalitarian, participatory economic relations in the spaces and cracks within this complex system wherever possible, and to struggle to expand and defend those spaces. The idea of eroding capitalism imagines that these alternatives have the potential, in the long run, of expanding to the point where capitalism is displaced from this dominant role. An analogy with an ecosystem in nature might help clarify this idea. Think of a lake. A lake consists of water in a landscape, with particular kinds of soil, terrain, water sources, and climate. An array of fish and other creatures live in its water, and various kinds of plants grow in and around it.

Collectively, all of these elements constitute the natural ecosystem of the lake. This is a “system” in that everything affects everything else within it, but it is not like the system of a single organism in which all of the parts are functionally connected in a coherent, tightly integrated whole. In such an ecosystem, it is possible to introduce an alien species of fish not “naturally” found in the lake. Some alien species will be eliminated instantly. Others may survive in some small niche in the lake, but not change much about daily life in the ecosystem. But occasionally an alien species may thrive and eventually displace the dominant species.

The strategic vision of eroding capitalism imagines introducing the most vigorous varieties of emancipatory species of non-capitalist economic activity into the ecosystem of capitalism, nurturing their development by protecting their niches, and figuring out ways of expanding their habitats. The ultimate hope is that eventually these alien species can spill out of their narrow niches and transform the character of the ecosystem as a whole. This way of thinking about the process of transcending capitalism is similar to the popular, stylized story told about the transition from pre-capitalist feudal societies in Europe to capitalism. Within feudal economies in the late Medieval period, proto-capitalist relations and practices emerged, especially in the cities. Initially this involved commercial activity, artisanal production under the regulation of guilds, and banking.

These forms of economic activity filled niches and were often quite useful for feudal elites. As the scope of these market activities expanded, they gradually became more capitalist in character and, in some places, more corrosive of the established feudal domination of the economy as a whole. Through a long, meandering process over several centuries, feudal structures ceased to dominate the economic life of some corners of Europe; feudalism had eroded. This process may have been punctuated by political upheavals and even revolutions, but rather than constituting a rupture in economic structures, these political events served more to ratify and rationalize changes that had already taken place within the socioeconomic structure.

The strategic vision of eroding capitalism, according to Wright, sees the process of displacing capitalism from its dominant role in the economy in a similar way: alternative, non-capitalist economic activities emerge in the niches where this is possible within an economy dominated by capitalism; these activities grow over time, both spontaneously and, crucially, as a result of deliberate strategy; struggles involving the state take place, sometimes to protect these spaces, other times to facilitate new possibilities; and eventually, these non-capitalist relations and activities become sufficiently prominent in the lives of individuals and communities that capitalism can no longer be said to dominate the system as a whole.

This strategic vision is implicit in some currents of contemporary anarchism. If revolutionary socialism proposes that state power should be seized so that capitalism can be smashed, and social democracy argues that the capitalist state should be used to tame capitalism, anarchists have generally argued that the state should be avoided—perhaps even ignored—because in the end it can only serve as a machine of domination, not liberation. The only hope for an emancipatory alternative to capitalism—an alternative that embodies ideals of equality, democracy, and solidarity—is to build it on the ground and work to expand its scope.

As a strategic vision, eroding capitalism is both enticing and far-fetched. It is enticing because it suggests that even when the state seems quite uncongenial for advances in social justice and emancipatory social change, there is still much that can be done with the business of building a new world on economic and environmental justice, within the current capitalist structure, albeit flawed. It is far-fetched because it seems wildly implausible that the accumulation of emancipatory economic spaces within an economy dominated by capitalism could ever really displace capitalism, given the immense power and wealth of large capitalist corporations and the dependency of most people’s livelihoods on the well-functioning of the capitalist market. Surely if non-capitalist emancipatory forms of economic activities and relations ever grew to the point of threatening the dominance of capitalism, they would simply be crushed.

Eroding capitalism is not a fantasy. But it is only plausible if it is combined with the social-democratic idea of taming capitalism, linking the bottom-up, society-centered strategic vision of anarchism with the top-down, state-centered strategic logic of social democracy. The goal: to tame capitalism in ways that make it more erodible, and erode capitalism in ways that make it more tamable. One concept that will help us to link these two currents of anticapitalist thinking is real utopias. This is an important point with respect to what Wright is attempting to analyze in the efforts to create a just and sustainable planet, one which includes people not only on a domestic level but also on a global scale. The idea that eroding and taming capitalism, without its total elimination, is a position that makes sense in the context of understanding a “utopia.”

Real Utopias

Real Utopia is a self-contradictory expression. The word “utopia” was first coined by Thomas More in 1516, combining two Greek prefixes—eu, which means good, and ou, which means no—into “u” and placing this before the Greek word for place, topos. U-topia is thus the good place that exists in no place. In other words, it is a fantasy of perfection. How then can it be “real?” It may be realistic to seek improvements in the world, but not perfection. Indeed, the search for perfection can undermine the practical task of making the world a better place. As the saying goes, “the best is the enemy of the good.”

There is thus an inherent tension between the real and the utopian. It is precisely this tension which the idea of a “real utopia” is meant to capture. The point is to sustain our deepest aspirations for a just and humane world that does not exist while also engaging in the practical task of building real-world alternatives that can be constructed in the world as it is that also prefigure the world as it could be and which help move us in that direction. Real utopias thus transform the no-where of utopia into the now-here of creating emancipatory alternatives of the world as it could be in the world as it is. Real utopias can be found wherever emancipatory ideals are embodied in existing institutions and proposals for new institutional designs. They are both constitutive elements of a destination and a strategy. Here are a few examples.

Worker cooperatives, according to Wright, are a real utopia that emerged alongside the development of capitalism. Three important emancipatory ideals are equality, democracy, and solidarity. All of these are obstructed in capitalist firms, where power is concentrated in the hands of owners and their surrogates, internal resources and opportunities are distributed in a grossly unequal manner, and competition continually undermines solidarity. In a worker-owned cooperative, all of the assets of the firms are jointly owned by the employees themselves, who also govern the firm in a one-person-one-vote, democratic manner. In a small cooperative, this democratic governance can be organized in the form of general assemblies of all members; in larger cooperatives the workers elect boards of directors to oversee the firm. The Mondragon experiment in Spain is one good example and the other network of references regarding worker cooperatives can be found in the work of Gar Alperovitz and his New Economy Coalition, the Institute for New Economic Thinking, and the incredible number of worker cooperatives that are currently operating successfully in the United States.

Worker cooperatives may also embody more capitalistic features: they may, for example, hire temporary workers or be inhospitable to potential members of particular ethnic or racial groups. Cooperatives, therefore, often embody quite contradictory values. Nevertheless, they have the potential to contribute to eroding the dominance of capitalism when they expand the economic space within which anti-capitalist emancipatory ideals can operate. Clusters of worker cooperatives could form networks; with appropriate forms of public support, those networks could extend and deepen to constitute a cooperative market sector; that sector could—under possible circumstances—expand to rival the dominance of capitalism.

Real utopias can also be found in proposals for social change and state policies, not just in actually existing institutions. This is the critical role of real utopias in long-term political strategies for social justice and human emancipation. One example is an universal basic income (UBI). A UBI simply gives everyone, without conditions, a flow of income sufficient to cover basic needs. It provides for a modest, but culturally respectable, no-frills standard of living. In doing so it also solves the problem of hunger among the poor, but does so in ways that puts in place a building block of an emancipatory alternative. UBI directly tames one of the harms of capitalism—poverty in the midst of plenty. But it also expands the potential for a long-term erosion of the dominance of capitalism by channeling resources towards non-capitalist forms of economic activity. Consider the effects of a basic income on worker cooperatives. One of the reasons worker cooperatives are often fragile is that they have to generate sufficient income not merely to cover the material costs of production but also to provide a basic income for their members.

If a basic income were guaranteed independently of the market success of the cooperative, worker cooperatives would become much more robust. This would also mean that they would be less risky for loans from banks. Thus, somewhat ironically, an unconditional basic income would help solve a credit market problem for cooperatives. Wright would agree with presidential candidate Andrew Yang’s UBI platform, at least initially; I suspect Wright would argue for a living wage UBI where Yang argues for a cap at $1000.00 per month.

Taming and Eroding

So, how to be an anticapitalist in the twenty-first century?

Give up the fantasy of smashing capitalism. Capitalism is not smashable, at least if you really want to construct an emancipatory future. Individuals and communities may personally be able to escape capitalism by moving off the grid and minimizing involvement with the money economy and the market, but this is hardly an attractive option for most people, especially those with children, and certainly has little potential to foster a broader process of social emancipation. If a person is concerned about the lives of others, in one way or another, they have to deal with capitalist structures and institutions.

Anticapitalism means taming and eroding capitalism in the context of a democratic economic model. This arguably is the best approach to remediating the precarious nature of the market and which also presumes that individuals and communities need to participate both in political movements for taming capitalism through public policies and in socioeconomic projects for eroding capitalism through the expansion of emancipatory forms of economic activity. This implies that people must renew an energetic progressive social democracy that not only neutralizes the harms of capitalism but also facilitates initiatives to build real utopias with the potential to erode the dominance of capitalism.

Erik Olin Wright’s anticapitalism is timely.

EDWARD J. MARTIN, Ph.D. teaches at the Graduate Center for Public Policy and Administration, California State University, Long Beach. He is co-author of Savage State: Welfare Capitalism and Inequality (Roman & Littlefield, 2004) and Capitalism and Critique: Unruly Democracy and Solidarity Economics (Rutledge, 2019).

End Notes

This essay is based on the original research and writing of Erik Olin Wright, “How to Be an Anticapitalist Today, Jacobin, December 2, 2015; and Erik Olin Wright, “Compass Points: Towards a Socialist Alternative,” New Left Review, 41, September – October 2006, 93-124.


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