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Be Utopian: Demand the Realistic

Neoliberal capitalism is dead. But socialism isn't ready to take its place.

Robert Pollin

March 9, 2009

Socialism’s all the rage. “We Are All Socialists Now,” Newsweek declares. As the right wing tells it, we’re already living in the U.S.S.A. But what do self-identified socialists (and their progressive friends) have to say about the global economic crisis? In the March 4, 2009, issue, we published Barbara Ehrenreich and Bill Fletcher Jr.’s “Rising to the Occasion” as the opening essay in a forum on “Reimagining Socialism.” TheNation.com will feature new replies to their essay over the coming weeks, fostering what we hope will be a spirited dialogue.

Neoliberal capitalism–whose defining features were Wall Street greed and big business domination of government policy-making–is dead. But what comes next?

Solidarity, equality and freedom have always been the fundamental principles animating the left. It is from these principles that the left has constructed its various visions of a truly democratic, egalitarian social order–i.e., the only type of society that deserves to be called “socialist.” Given the collapse of neoliberalism, shouldn’t the left now advance a case for full-throttle socialism?

While socialism is desirable as a longer-term vision of a just society, it is unrealistic in my view to expect it to take shape today. The problem is that, at this stage in history, we do not know what a socialist economy would look like, nor do we know how to move from our current disintegrating neoliberalism to something approximating socialism. Socialism should be seen as a series of challenges and questions as we push a social justice agenda forward amid the ongoing crisis. It should not be seen as a package of obvious and ready-made answers.

This becomes clear in considering the collapsed financial system. In the short term, there are no longer any viable alternatives to government takeovers of failing banks. But nationalizing the banks, by itself, is neither a panacea nor an advance toward socialism. The fact that former Federal Reserve chair Alan Greenspan now supports nationalization should at least give pause to its enthusiasts on the left. Over the longer term, a nationalized financial system presents daunting problems.

Realistically, such a system will inevitably produce failures and scandals tied to “crony capitalism”–privileged back-dealings with well-connected nonfinancial businesses. In addition, individual financial enterprises, as with all business entities, require micro-management. The government would have to create an incentive system for the managers of the publicly owned banks that would substitute for the very straightforward profit motive that guides managers of private banks. If the nationalized bank managers are not committed to maximizing profits, how should their performance be evaluated?

Resolving such questions would require years of experimentation and fine tuning. In the meantime, taxpayers would pay for the inevitable breakdowns. This, in turn, could be the very thing–perhaps the only thing–that could shift the target of public outrage over the collapse of the financial system off Wall Street and onto the government. At this historical juncture, it is therefore preferable to fight for a new financial regulatory regime with primarily private bank ownership as the means of promoting financial stability and channeling credit to priority areas such as affordable housing and the green economy.

Building the green economy raises similar concerns. We need to stop consuming fossil fuels and defeat global warming over the next twenty to thirty years. This is a massive project, and it will not succeed by relying entirely on the public sector or community-based nonprofit organizations, however worthy. Rather, its primary propulsive forces will be large government incentives for private businesses to profit from clean energy investments, and for these same business interests to face significant costs through producing and selling fossil fuels. The Obama stimulus program is a first major step in the right direction, by mixing large-scale public investments–in the range of $80 billion over two years–with even larger incentives for private firms.

One of the most bracing slogans to emerge from the 1968 uprising in France was “Be Realistic, Demand the Impossible.” I am more inclined to embrace its mirror image as a guide for moving forward today. That is, “Be Utopian, Demand the Realistic.”

Other Contributions to the Forum

Immanuel Wallerstein, “Follow Brazil’s Example

Bill McKibben, “Together, We Save the Planet

Rebecca Solnit, “The Revolution Has Already Occurred

Tariq Ali, “Capitalism’s Deadly Logic

John Bellamy Foster, “Economy, Ecology, Empire

Christian Parenti, “Limits and Horizons

Doug Henwood, “A Post-Capitalist Future is Possible

Mike Davis, “The Necessary Eloquence of Protest

Lisa Duggan, “Imagine Otherwise

Vijay Prashad, “The Dragons, Their Dragoons

Kim Moody, “Socialists Need to Be Where the Struggle Is

Saskia Sassen, “An Economic Platform That Is Ours

Dan La Botz, “Militant Minorities

Michael Albert, “Taking Up the Task

Dave Zirin, “Socialists, Out and Proud

Joanne Landy, “I Love Bill Moyers, but He’s Wrong About Socialism

Hilary Wainwright, “I Love Bill Moyers, but He’s Wrong About Socialism

George A. Papandreou, “The Challenge of Global Governance

Robert PollinRobert Pollin is Distinguished University Professor of Economics and Co-Director of the Political Economy Research Institute (PERI) at the University of Massachusetts Amherst. His most recent book (with Noam Chomsky) is Climate Crisis and the Global Green New Deal.


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