In a direct follow-up to last month’s posts on economic “metagames” and capitalist coercion, I want to think a bit more about alternative ways to run an economy— about answers rather than just questions. Just as a brief refresher: last month I wrote about how capitalism coerces individuals without having to command them, and about how “meta” strategies in games (competitive strategies that might not be fun, but work) can ruin them. Capitalism works by making exploitation or self-exploitation the most effective strategy available to most individuals for economic success— whenever we choose a more expensive and more ethical product, or a job with shorter hours, we are pursuing an “off-meta” strategy that sacrifices our economic power and chances of economic success.

On the left, a variety of socialist models aim to order the economy around competition rather than cooperation. These models range from a centralized command economy to bottom-up workers’ democracy. The Soviet example suggests some of the problems of “just have the state do it intentionally” as an alternative to the intentionless whim of competitive markets-- command economies can be quite efficient (the Soviet military-industrial complex, and here I’m drawing from Vladislav Zubok’s compelling book Collapse, was by some measures remarkably efficient) but they can also be wasteful even if they are democratically run. 

Putting aside platitudes about power corrupting, purely on an economic level, the strength of a democratic command economy is its ability to override existing material reality and impose our collective will. Markets aren’t just fiction– they represent the actual relations of production. Mineral X is in one region, component Y in another, and whatever business relationship puts them together is one that the many different people who have a hand in their production and motion have agreed to tolerate. 

The very reason you would want Big Socialism to be able to ignore profits and existing arrangements and simply provide for people’s needs is because it can override this state of affairs. Mineral X should be available to more of us, so screw the local claimants trying to hoard it, the democratic will has spoken, and we will come distribute it in a new way. This creates serious legitimacy issues, but even if everyone abides by the resulting decision, not all economic bottlenecks are caused by scheming capitalists or poor allocation. Sometimes there are real limit, hidden costs, etc. These are not easily buried.

The problem here is clearer if we go in the other direction. An inefficient market transaction is, ideally, easy enough to replace. Video games are a digital good– why do I need to buy them at GameStop? As it happens, I don’t: digital storefronts allow you to buy directly. These options became available because of individual firms deciding to sell this way– they didn’t need permission. 

But when all economic arrangements are dictated by the government, existing setups can get locked in long when they probably shouldn’t. If you need an affirmative vote to end GameStop, it probably remains far more prominent than it is now. For a much more real example, consider England’s coal mines. Margaret Thatcher’s vicious closure of the mines remains a tragic moment in postwar labor history– dreams and communities crushed by evil capitalists. The state’s argument was, in part, that these were wasteful mines subsidized by the government: English coal was more expensive than that bought on the international market, meaning every ton of coal brought up was costing money. 

Yes, we don’t have to think in terms of profits if we aren’t capitalists, but again, market relationships represent (often poorly) real economic realities. There are plenty of reasons one might want to run a state industry at an economic loss: because what it produces is valuable and scarce, to preserve an industry that might otherwise leave the country and threaten national security, or just to give people jobs. What Thatcher did was wrong– there were better and fairer ways to close the mines, if that was necessary. But there was a case for closing them. Socialist governance propped up the mines; neoliberalism brought them down. 

The magic of socialism is that you can keep a mine open independent of efficiency. This is also the curse of democratic socialism. Existing arrangements can persist whether or not they should economically. I certainly find this preferable in many ways to capitalism: at least I have a vote, something markets don’t allow. And to be clear, capitalism has related problems too. It can be wildly inefficient, lock in existing arrangements, etc. But markets do actual work.

Less bureaucratic solutions to what is sometimes called the socialist calculation problem have their own issues. Workers’ cooperatives don’t solve as much as they might seem to: since they still compete, and competition is the engine of capitalism and worker exploitation, they have very similar incentives to the firms we have today. And decentralized solutions produce their own odd inefficiencies. I agree that everyone should have a say in our economic life, but does that mean every worker should be making important production decisions in every moment? Too much direct democracy produces its own paralysis, in the same way that too much democratic delegation does. 

===

These aren’t new questions, and I’m ruminating on them now with just two suggestions. While understanding the coercion of markets is an essential first step to improving upon them, we can also learn from one feature of the market society as we try to construct something better: its radically experimental nature. Markets last because they adapt; their advantage is not so much that they are always the most efficient solution (far from it) but that they can allow for at least a half-baked solution to almost any problem. A proper alternative to our current political economy will require elements of top-down design and bottom-up input, acceptance of current material reality and means to reorganize it, cooperation and competition. 

Second, a post-capitalist economy will need to have the kind of self-augmenting features capitalism’s market society does. Markets defend themselves: their very operation aligns short-run material interests with their continued existence, and makes alternatives harder to imagine or practice. For example, the conversion in the US and the UK of housing into an asset that must always appreciate, and the primary asset of many families, is remarkably difficult to reverse even now that the suffering it produces is becoming obvious. Any attempt to make housing more of an available good and less of a major investment– and more broadly to reorient economic growth around increasing material throughput or standard of living instead of “stocks go up”-- threatens the wealth of existing homeowners. The assetification of housing has created its own constituency for defending it– ironically much like what the right claims welfare does.

From an energy systems standpoint, markets form local minima. Imagine landscape of rolling hills, with peaks and depressions, with a big steel ball rolling around in it. The lowest point in any of these depressions is a local minimum for gravitational energy for the ball: if it rolls into a hole, there is no way to get it in any direction without actively pushing it up.

In contrast, most of the blueprints I’ve encountered for a post-capitalist society rely on the constant application of energy, physical and mental. The classical socialist suggestions of “Big Government Planning Bureau” all depend on each and every person in that state organ making good decisions every day. Individual capitalist firms’ mistakes don’t threaten capitalism in the way that individual operators’ mistakes in a socialist command economy do, both because of decentralization– hating Comcast does not mean hating capitalism, but disdain for State Television Bureau Unit 07 is likely to produce disdain for socialism– and structure– mistakes produce profit for someone else in capitalism. 

And capitalism’s ruling class is more self-sustaining because it cannot change course on its own. A socialist government can collapse into a lower energy state simply by letting the aforementioned ball roll down the hill– privatizing industry– but no collective of capitalists can or would make that decision. The very centralization of decision-making, whether autocratic or democratic, that makes socialism socialism also makes it easy to destroy itself. Capitalism, in contrast, builds material constituencies and actual laws that paralyze decision-making, stifling the construction of alternatives. 

 Forget the “human nature” capitalists sometimes point to as a barrier– left visions of the economy are a violation of cosmic nature. Socialism offends basic principles of the universe: alternatives exclude, things decay. The whole point of socialism is to do better than competition, and to build a system of life rather than death. We won’t beat capitalists at forming something self-sustaining. 

But an effective alternative to capitalism will need to, in its own way, have similar self-healing, self-magnifying functions. Socialism cannot merely be effective or popular. It must also once in place be easy– it cannot rely on always working well or always having effective leadership or always having an ideologically committed populace. A socialist healthcare or housing system needs to produce not only its own constituency who will continue to vote for it– it also needs to constantly reinforce a new and better way of thinking about housing or healthcare, and not through intentional propaganda but through lived experience. When a Gen X homeowner tells me that houses always get more valuable, and are “naturally” a good investment, they are describing something that really has been true for them; likewise, public housing or universal healthcare needs to become its own lived truth, its own way of thinking, and its own political force. Socialism has to be a firmly-founded building, not a dream kept alive by the constant effort of its architects, who, after all, might wake at any moment.

And in this we, finally, those of us who want to better do have an advantage. Peace and generosity and compassion are nearly ubiquitous values– among the first things we teach our children for example– because they actually are more pleasant, and because they actually are practical. In the long term, a system that can prioritize well-being and long-term concerns instead of simply reshaping the landscape to make short-term change difficult is a system that can survive better and thrive more. We just have to build it.