SOCIALISM & THE WELFARE STATE

...Democracy in politics means not merely recognition of a ruler's obligations to his subjects, but a basic transition from a conception of the state as a ruler's possession to that of a state that belongs to its citizens...

...Nor do I think this has been an accident...

...Socialists can muster majorities as long as they restrict their proposals to socialwelfare programs, which appeal not only to industrial workers but to the service, distribution, and low-level managerial sectors as well...

...socialism is democracy in economics...

...It well might—though certainly not under the name of socialism...

...The oil crisis has made many Americans aware that corporate enterprise is not a kind or an extension of "private" enterprise in the sense of enterprise based on selflabor, but its negation...

...They can be democratic, but only at the cost of not being fully socialist...

...But precisely because of the tradition of selflabor, a program of economic democracy might find support...

...But the principle remains constant: the normative model is not state ownership but producer ownership, and the task of industrial organization is to approximate the paradigm of worker-owner rather than the paradigm of state monopoly...

...That system may be inefficient, but, in spite of glaring privilege and extensive potential discontent, it has proved remarkably stable...

...while state capitalism is not an alternative, economic democracy might well be...

...Ideas of radical internal democratization and decentralization of ownership appear in the works of such revisionists as Bernstein or of such humanists as Masaryk, but not in the work of such "orthodox" Marxists as Engels, the young Kautsky, or Lenin...

...When they propose to transform the very basis of property relations, they inevitably lose majority support...

...the middle sector, which is allied with the industrial workers on welfare-state issues, will align itself with the owners in face of fully socialist proposals...

...The term to describe such restructuring would have to be different—say, "economic democracy...

...There is a rigorous parallel between democracy in politics and in economics...

...Socialism, as democracy in economics, is impossible without popular support: it must be democratic—or it cannot be at all...

...Yet the latter is a contradiction in terms...

...Could such a program win majority support in the United States...

...A restructuring of property relations based on the conception of producer ownership rather than of state monopoly meets a basic socialist criterion: tools are controlled by those who use them...

...Though politically oppressed, they are given a guaranteed income, health and old-age care and recreation, while the demands on their labor are limited: the low productivity of the Soviet system is notorious...

...The increasing complexity of an economy inevitably reduces the demand for occasional, unskilled labor, which is, in less complex economies, the traditional last resort of the casualties of the economic process...

...have bought off the discontented with the vision of equal opportunity, conceived less as the opportunity to profit by one's labor than as the hope of the "big break," in the manner of Horatio Alger...

...To be sure, this is at best a long-range prospect, but the alternative—centralizationis no prospect at all, either for democracy or for socialism...

...Given the deep roots of American democracy, they are not and never will be receptive •to what passes for socialism in the Soviet Union and its occupied territories...

...As a result, technological complexity, while favoring large sections of a society, also increases the pool of instability and despair and so threatens the stability of the system—unless the system is willing and able to provide broadly based social insurance against such effects of insecurity...

...ALL OF THIS does not mean that the welfare state is bad...

...Far more than the principle of state ownership, such a restructured society will recognize the claim of labor...

...Ironically, it is the Soviets who have most clearly recognized the stabilizing effect of welfarestate measures and have systematically and effectively used them as a countermeasure to instability...

...But the pattern is constant: an increase in the pool of discontent is compensated by extensive programs of social welfare...

...But other capitalist countries, notably West Germany, have successfully used social-welfare programs as a stabilizing device, and in recent years even Richard Nixon has exhibited a pronounced tendency to resort to them, in highly Bismarckian forms...

...So defined, socialism not only as a program of social welfare but as a program for restructuring property relations, might well win the support of a majority...

...It will also recognize the claim of labor in the middle sector, expressed in the 442 NOTEBOOK perennial hope, "Some day I'll open my own shop...

...Not only commissars but corporations, too, can understand the stabilizing effect of social welfare...

...Industries requiring a larger work force might require an elected works council, while in societywide services and basic industries the works council might well include representatives of consumers as well as of producers...

...it is good, very good, and very necessary...

...But it does mean that, in itself, the welfare state, good, humane, and just as it may be, is basically a stabilizing rather than socializing factor...

...Yet it is well to remember that the welfare state is not uniquely socialist...

...The revolutionary instability of developing countries seems less a result of the growth of the industrial working class than of the increase of the pool of economic casualties, which corn440 bines with a failure of nascent capitalism to provide social assurance against the strain...

...European socialism has reflected this experience...

...Recent events, from Watergate to the oil fiasco, have made the voters more willing to explore new directions then they have been for several decades...

...in deference to American sensibilities—is clearly the most effective program democratic socialists can present in the United States...

...Direct worker ownership, based on self-labor, might provide a far more acceptable and effective model...

...Its earliest, purposeful practitioner was, after all, Chancellor Bismarck...

...There is a great need for an alternative to corporate capitalism...

...They differed from their nondemocratic opponents only in their pious hope that such centralized state ownership might, by some miracle, be achieved by democratic means and prove compatible with democracy...

...Even democratic socialists such as Kautsky—when he achieved his renegate status—have often shared the conception of socialist ownership as centralized state ownership...

...DEMOCRATIC SOCIALISTS who take the idea of transformation of property relations seriously need to be selective about their models...

...Its success in alleviating both the specific costs and existential anxiety of industrialization, together with its proven compatibility with liberal democracy, make it an ideal basis for a coalition capable of appealing both to industrial workers and to the middle sector of the selfemployed, small entrepreneurs and service employees with hopes of independence...

...A broadly conceived program of social security, covering employment security, and medical services as well as old-age pensions, housing, transportation, and municipal services—though perhaps not under the name of "welfare...

...Socialism entails a transformation of the very concept of ownership from an abstract claim to possession, justifying economic privilege, to an expression of lived relationship...

...Except for such tactical concessions as the N.E.P., socialist movements attempting to transform property relations have failed to distinguish between corporate "private" ownership and private ownership based on self-labor...

...This is not a matter of persuading the middle sector that, like industrial workers, they are victimized by capitalism (which they are) but rather that, unlike the owners, they would not be victimized more severely and ultimately destroyed by socialism— and that this contention, so far, has been proven false...

...Devotees of the cult of "the young Marx" might come up with references to "producers' associations," but, like European democracy, "orthodox" European Marxism was, in this respect, Lassallean...

...As democratic socialists in America, with equal emphasis on all three terms, we must, first of all, teach the idea of social responsibility through welfare-state programs, in coalition with liberal Democrats...

...They have invariably reduced the self-employed to the status of wage slaves, analogous to that of industrial workers—but with the precarious exception of Yugoslavia, they have done little, except on paper, to emancipate industrial workers from this status...

...In this sense, regardless of the ideology of the system, the welfare state is the necessary safeguard of social stability in a complex economy with a high rate of economic casualties...

...It is, rather, a radical rethinking of what the idea of socialism should mean in practice, and a reformulation of socialist programs so that they can win the support not only of industrial workers but of popular majorities— and that means first of all of the middle sector of worker-owners...

...Except in England and Scandinavia, basic socialist conceptions of producer ownership were forged in highly centralized states where democracy, if it existed at all, was conceived as electoral control over central organs of a centralized state rather than as local autonomy and self-determination...

...Admittedly, much of the instability in the Soviet Union and its occupied territories is politically rather than economically induced, stemming from resistance to Soviet autocracy and to Great Russian imperialism...

...But we need not give up the idea of socialism if we are willing to recognize that socialism in America cannot be an import, whether from Yugoslavia, Sweden, or the Soviet Union, but must grow from native traditions of democracy, cooperation, and self-labor...

...At the same time, economic development brings about more technological displacement and so a greater number of such casualties...

...Finally, the mobility of labor, which this complexity requires, undercuts the stable wide-family unit and so deprives the economic casualty of the opportunity to spread the impact of joblessness or trouble over a large number of individuals within the family...

...It has been the tragedy of socialism that this unalterable fact was used, not as an argument NOTEBOOK 441 for rethinking the socialist program, but rather either for abandoning hope—or for "imposing socialism" by force...

...While welfare-state programs can elicit both the support of the industrial labor force and of the middle sector of the selfemployed and small entrepreneurs, recent experience (in England and Chile) shows that only industrial workers are likely to support programs for transforming the nature of property relations...

...But this will not only be a program for democratization of industrial mass production...

...Gun-point "socialism" in principle is not, cannot be, and can never become socialism: it is nothing more or less than the extension of dictatorship from politics into economics...

...I do not think the proper response is force or despair...

...The United States lags behind in that development— for generations, the economically privileged in the U.S...

...Bismarck, hardly an appealing man but a consummate politician, saw the welfare state not as socialist but as a safe alternative to socialism...

...At his behest, welfare-state legislation was passed, together with a law banning the Social Democratic party—and for the specific purpose of taking the wind out of social democratic sails...

...The tradition of self-labor ownership in' America is strong, but so is the association of • the word "socialism" with a system of monopolistic state enterprise...

...NOTEBOOK 443...

...Socialism means more: it also embodies the hope for basic structural change---specifically, for a radical democratization of the economic process...

...The one-man shop represents direct worker ownership, while enterprises requiring more than one worker might well use a cooperative model (the moshav rather than the kibbutz in agriculture...

...The crisis also has made the point that corporate "owners" cannot be the trusted guardians of the public weal, even if unions can wrest from them a living wage with fringe benefits...

...Analogously, democracy in economics— socialism—means not only recognition of the owners' obligation to their employees but transition from the conception of the economy as the owners' possession to an economy belonging to its producers...

...Similarly, the socialist model based on state ownership of means of production will prove counterproductive even if "the workers own the state...

...It requires relatively long-range individual economic commitment, thus increasing the personal impact of becoming an economic casualty: it is easier to cut down on consumption than on mortgage, insurance, or installment payments...

...A hundred years later, it is difficult to avoid the recognition that the welfare state, in some form, is indeed a necessary concomitant of technological sophistication or, more precisely, a necessary condition for social stability in a technologically sophisticated society, quite independent of ideology...

...Whether it is the effect of the frontier or a reflection of emigrant mentality, Americans have tended to prefer privation with a hope of great fortune to security without it...

...There is no reason why the same strategy could not be used to assure the stability of economic as well as political privilege...

...The application of that model to a complex economy would require a range of variations...

...Yet, if there is an available democratic socialist alternative, sensitive to American traditions of grass-roots democracy and self-labor—proposing democratization rather than nationalization of the economy —that alternative could prove quite attractive against the backdrop of moral, political, and economic bankruptcy of corporate ownership and could prove effective in shaping the future of America...

...Far from it...

...If the only "socialist" alternative available were that represented by the elitist totalitarian Left, the current receptivity would pass and Americans would rest content with capitalism meliorated by welfare-state measures...

...It is the hope of transforming the worker, not only from an exploited into a wellpaid object of the economic process, but from object into subject: it is the hope of transforming him into a participant in the decisions as well as a sharer in the fruits of economic activity...

...The French model of democracy--electoral control over the head of a centralized state—might well be far less appropriate than the Swiss model of maximum decentralization...

...While socialists should support welfare-state programs as intrinsically good and compatible with socialism, welfare statism is not socialism...

...Antonin Liehm speaks of a new social contract: the masses give up a large proportion of their human, national, and civil rights in exchange for being taken care of...

...Politically, this aspect of socialism is far more problematic...