POPULAR ECONOMICS

ALTERNATIVES TO CAPITALISM

The past few articles in the popular economics series have looked at capitalist economic systems. This article starts to look at what are alternative economic relationships. It will also help you to judge what systems now, can build the basis for a socialist system in the future.

Alternatives to capitalism

In a previous article in this series, we discussed the characteristics of capitalist economic relationships. Some of the key aspects were:

1. Workers do not own the means of production (e.g. factories, equipment, land, etc). Instead, capitalists own the means of production.
2. In order to survive, workers sell their labour in a labour market in exchange for a wage.
3. Commodities are produced for sale on a market.
4. Capitalists use the labour of workers and the means of production to produce for profit.

To build economic alternatives to a capitalist system, we need to transform some or all of these characteristics. For example, establishing co-operatives or community-owned firms is an alternative to the capitalist pattern of ownership. If we create a system which produces for people's needs and not for profits we are also challenging capitalist relationships. Or making sure that everyone receives a basic income instead of depending on wages alone, will also change the nature of a capitalist economy.

We already have some alternatives to a completely capitalist economy in South Africa. Government provides education -- production is not for profit and the service is not sold on a market.

So if we can recognize and protect the alternatives we already have in South Africa, then we are making an important step in developing a socialist economic strategy.

Difficulties with Alternatives

But we mustn’t think that any alternative to capitalist economic relationships will automatically be better. For example, the apartheid government established many economic arrangements which were not capitalist but which led to widespread poverty and racially-based oppression. Our alternative must develop a system which benefits the people, and does not simply develop a system which is non-capitalist.

Think of gender relationships and household labour. Production in the household meets many basic needs (e.g. childcare, health care, care for the sick and elderly). Household production does not directly generate profits and often it does not involve a market exchange. Therefore, in many respects, household production is an alternative to a capitalist system. But this production relies on the unpaid labour of women. And it places women and children at high risk for poverty, so it is not a socially desirable alternative.

State Ownership and Control

State ownership and control -- in which the government becomes the dominant player in the economy – has been a key issue in ideas about alternatives to capitalism. The state can intervene to ensure access to basic goods and services, to create a more equal distribution of income, and to lower the rate of unemployment.

But if the state controls all this, it won’t necessarily produce these outcomes. For example, the state could act in its own interest and discount the interests of the public. The state could also exploit workers just as a capitalist exploits workers.

So when we look at alternatives the key test is -- do these economic relationships have desirable social and economic outcomes? Governments can play a major role in such an alternative system, but they might form one part of a more complex, and more socialist, economy.

Conclusion

If we want to develop an alternative economic strategy we must analyse very carefully:

• what alternatives already exist which can lay the foundation for a future socialist society
• whether the alternative that we propose will provide what people want, if it will benefit the people. If it sounds socialist but it is not satisfying people’s needs then it is not a desirable alternative.

Future articles in this series will explore these themes in more detail.