We face a pervasive crisis of disempowerment in the workplace. People aspire to have a voice in the decisions that influence them but as employees we have little influence, if any, over the major decisions that affect our lives at work.
Our political system is unresponsive to the popular will, it is called a democracy but functions like a plutocracy – rule by the rich. Capitalism may deliver for the 1 per cent, but for the other 99 per cent the system’s costs increasingly outweigh its benefits. The fact is that eight people, six of them in the US, now own as much in assets as the entire bottom 50 per cent of the world’s population.
We confront a mounting environmental crisis. Climate change is just one aspect of this crisis, but it is likely to profoundly disrupt civilisation because we have failed to wean ourselves off fossil fuels. In our gender and race relations, in our families, neighbourhoods, cities and regions, and in our systems of childcare, eldercare, justice, healthcare, housing and education, our communities are constantly at war with business interests and with the government agencies supporting those interests. And finally, relations among countries are competitive and adversarial, when humanity so desperately needs international collaboration in resolving challenges such as climate change, war and the risk of nuclear conflagration, famine and poverty.
That’s the bad news. The good news is the world has the resources and technological capabilities to offer everyone material comfort, human dignity and opportunities for growth. Indeed, capitalism has stimulated remarkable advances and led to real improvements in our material conditions. But these improvements are intermittent, shared unequally and come with escalating social and environmental costs. And so long as governments are dependent on the profitability of the business sector for their legitimacy and resources, they cannot adequately address those costs. That’s why we face a world in crisis.
What then is the way forward? Some progressives propose more socially responsible leadership by the business sector. Some emphasise the role of government, advocating stronger social and environmental regulations, expanded welfare provisions and limits on political campaign contributions. Some want to see more collaboration between business, government and labour, and advocate Nordic-style social democracy. While these reforms may mitigate some crises, they cannot overcome them in a capitalist, private enterprise economy: we need a more radical change – from capitalism to socialism.
I teach in a business school and yes, it is unusual to find a business school professor sceptical about capitalism, let alone advocating for socialism as an alternative model. But in any society whose economy is based on competing, profit-seeking, capitalist firms, there are severe limits to what can be achieved by appeals for greater social and environmental responsibility on the part of business leaders, customers, investors or even government. The solution is a system in which we decide democratically on our society’s economic, workplace, political, environmental, social and international goals, and in which we can manage strategically our economic resources to pursue those goals.
Democratic decision-making and strategic management may seem contradictory aspirations. We are so accustomed to seeing management, strategic or not, as something done to us by people called managers – people over whom we have little influence and whose objectives are often quite antithetical to ours. But management is far too important to be left to managers. We need to manage not only our enterprises but also our whole economy to target shared goals of wellbeing for people and sustainability for the planet. We can no longer afford to leave the direction of the economy to the rollercoaster market process.
The idea of such economy-wide strategic management for the public good has been largely absent from recent discussions of alternatives to capitalism. Indeed, the idea of socialism rings alarm bells for many people because they do not see how such economy-wide strategic management (aka “government economic planning”) could be democratic or effective, let alone both.
To state the obvious, authoritarian socialist planning may have been effective in forcing feudalistic Russia and China rapidly into the industrial age, but it came at a terrible cost. In our post-industrial era, our socialism must be democratic. Where then can we find a model of such a democratic form of socialism?
I argue that we have a model right in front of our eyes: in the strategic management processes used by many of our largest corporations.
The firm is an island of planning, albeit in a sea of competition. To coordinate internal operations, many firms rely on strategic management rather than market competition between business units. Some firms are aware that their strategic planning will be more effective if it taps the ideas of those further down the corporate hierarchy. Strategic management is not a rigid, top-down process but a participative dialogue about shared goals. If these highly profitable firms can manage so effectively and ensure participation on such a massive scale, then we should be able to adapt and scale up their strategic management practices to manage democratically the economic activity of entire industries, regions and nations.
Participation by employees in the strategic management of these capitalist firms is, of course, limited. CEOs are still accountable primarily to investors, and employees are still essentially help for hire. However, if we socialised the ownership of the nation’s productive assets, we could overcome those limitations and use these strategic management principles to guide not only individual enterprises but also the entire economy.
The idea of democratic socialism has an inescapably utopian quality. But that should not deter us. As has often been said, it has become easier to imagine the end of the world than the end of capitalism. So part of the challenge is to have the courage to believe that a better world is possible.
Is this merely the daydream of naive Millennials who have not learned the lessons of history? Surely not. Capitalism is the latest in the historical sequence of forms of society, but there is no reason to believe it’s the best humanity can do for itself. Democratic socialism is an idea on which many have “landed” and towards which many have “set sail” over the past two centuries – ever since capitalism emerged as the basic structure of modern society and since its limitations became obvious. Every generation with a passion for social and economic justice has articulated its own vision of this utopia and its own strategies for how we might achieve it.
Capitalism’s limitations and failures fuel deepening and widening frustration, and this means those opportunities for a radical shift might open at any moment. While there is a real danger that reactionary demagogues might capture these frustrations, progressives can mobilise such frustrations to work towards the better world promised by democratic socialism.
Most of the Boomer generation who witnessed the failures of state socialism are resolutely sceptical. If democratic socialism seems implausible to many, perhaps the impediment is people’s disenchantment with democracy. The failure of successive governments to serve the interests of working people has created widespread cynicism about democracy. Working people’s support for Scott Morrison, Boris Johnson and Donald Trump shows the frustration felt with the “elites” and the empty democracy these elites dominate. It’s hardly surprising that working people turn to populist candidates if they are the only ones to recognise their predicament.
Recent surveys reveal that Generation Z-ers do not share their elders’ visceral antagonism to socialism and feel deeply disenchanted with the results of capitalism. Democratic socialism has entered the lexicon as a viable alternative ideology that resonates with the next generation. To observe the increasing popularity of Bernie Sanders and the legions of young people who joined the British Labour Party because of its Momentum platform, is to recognise a profound shift. Socialism is attracting growing support because it offers an alternative vision of a world in which democracy – expanded and enriched – works for, rather than against, the public good.
This is an edited extract from The 99 Percent Economy: How Democratic Socialism Can Overcome The Crises Of Capitalism (Oxford University Press, $38.95).
Paul S. Adler is the Harold Quinton chair of Business Policy and Professor of Management and Organisation, Environmental Studies and Sociology at the University of Southern California.