Socializing Finance and Other Radical Reforms

Seth Ackerman’s essay on market socialism in Jacobin’s current issue has been receiving a good deal of attention, and rightly so. He does a fantastic job of reviewing the literature on Soviet efficiency—in other words, what were and weren’t the economic culprits in the country’s centrally planned system. He then sketches out a plan to socialize finance, thus transferring ownership of the means of production from private to public hands.

So far as I can tell, the bulk of attention has been devoted to the logistics and effectiveness of the plan. Matt Bruenig, after lauding Ackerman’s socializing scheme, had this complaint:

With that said, it is important to highlight the limitations of this form of socialization. All this socialization does is wrestle away profits, dividends, and other forms of capital income away from private — and generally very wealthy — hands. While this is technically a socializing move, it does not necessarily have a significantly egalitarian or democratizing effect. Swapping out private owners for government owners does not necessarily empower workers in their own firms or ensure that low-income workers get a raise. To the extent that worker democracy and egalitarianism are critical goals of the socialist agenda, financial socialization will not, by itself, be sufficient.

To be fair, advocates of it have never claimed that it will be sufficient. The goal of socialized finance is very narrow: capture financial rents for the public. That’s a very worthwhile goal, and one that seems to be in reach. To increase income equality and worker strength, however, other programs and strategies are much more critical.

What hasn’t received proper attention, in my view, is Ackerman’s central intent. Here he is, with Mike Konczal, laying it out.

When most people think about corporations throwing around their weight in the political arena, they think about “money in politics” — deep-pocketed interests that, unless pacified, can deep-six proposals that threaten their interests. For liberals, the Affordable Care Act’s compromised state exemplified the “big money” problem. Obama had to placate insurance companies, Big Pharma, and other powerful actors to get the act through Congress and on his desk. One can question Obama’s strategy of appeasing powerful lobbies (in this case, the filibuster might have been more responsible for diluting the law), but the point is this: Whenever a duly elected majority attempts to institute reform, it must first go through the juggernauts.

Unlike Move to Amend-style reforms, the private ownership problem Ackerman wants to rectify is foundational to our economic order. End corporate personhood, and we’d still be in the same capitalist boat. Ackerman, in contrast, seeks to indict not merely corporate capitalism or big business — to liberals and left-liberals, the consummate bad actors — but capitalism itself.

Friedmanites and other capitalist enthusiasts see private ownership as a check on government power and, from a purely descriptive standpoint, they’re right: Capitalist institutions and arrangements pen in left-reformist governments. Structure-altering measures are completely off the table — not because of prudent limits on state authority enshrined in the constitution, but because of capitalists’ power. Even vaguely leftist reforms can be dispatched when the specter of market panic is raised. This is capitalism as constrictor, limiting democratic sovereignty, delineating the acceptable and unacceptable. Ackerman wants to eviscerate these artificially imposed limits, these political constraints masquerading as economic constraints.

As I see it, other non-reformist reforms (full employment, substantial labor law reform, to name two) would have to precede his socialization plan. The Swedish example is instructive. As Ackerman notes towards the end of his Behind the News interview, the Meidner plan would have wrested ownership away from private capital and put Sweden on the path to economic democracy. The apotheosis of social democracies, with full employment, a generous welfare state, and a strong labor movement, Sweden was still steered away from democratic socialism. If revanchist neoliberalism were to fail anywhere, it would have been in Sweden. Yet it prevailed.

Could things have been different? I tend to think so. At the end of the day, though, it’s all about power. Only with a more potent Left, a vibrant labor movement, and a conscious, well-developed radical reformist strategy will we fare better at the next epochal crossroads.

Shawn Gude

Shawn Gude is a writer, graduate student, activist, and assistant editor at Jacobin. His intellectual influences include Chantal Mouffe, Michael Harrington, and Ella Baker. Contact him at or on Twitter @shawngude.


  1. Lay civil rights at the feet of Big Money, just like you can lay Obamacare (bought by Big Auto, among others).
    I’d love to hear a conservative way to reduce corporate power… really. Oftentimes it seems they’d rather praise incompetence than do their homework.

  2. So other than the gulags, and the purges, and the forced famines, and the lack of freedom, and the long lines, and the favors granted to the connected elite, and the lack of consumer goods, and an economy wasted on military production, things went OK for the Soviets?

    Next up, what the Nazis can teach us about Big Data.

  3. The Left has been accused of all sorts of Utopian schemes, with varying degrees of justification. Wouldn’t it be more sensible to say the Left believes inequality manifests in ways we can’t always control? But some are well within our ability to fix.

    Take some particularly onerous inequality. Consider unsafe drinking water and a lack of sanitary toilets as an example. Fixing such things makes life better for everyone, rich and poor since everyone’s susceptible to cholera. Rome worked out sewers and toilets and grew to a population of a million. Such schemes were forgotten until London re-learned them.

    Human societies forget and re-learn all sorts of values. We’ve always understand socialism at short range. We know early man cared for his sick, was capably splinting broken bones, feeding the elderly and toothless. Early man surely loved his fellow man as we love each other. But once the group gets large enough, suffering and inequality gets abstract and -ismy.

    There will never be any Socialisation of Finance. Money belongs to people: it was earned. Once a culture encounters money it never willingly goes back to barter. That was one of the hallmarks of the USSR, a huge black market running on a barter system. Government can no more fix inequality through regulation than it can make itself rich by printing money. Though markets don’t fix all things, when they’re run fair and square, they’re the only way anyone makes money.

    When it’s in society’s interest, we eventually get around to fixing its worst aspects, seeing the benefits to everyone. Consider the debate over education these days: everyone’s got ideas on education reforms. Everyone knows good teachers are the solution: eventually we’ll come to terms with the cost of incarcerating badly educated children and square it up with the market price for good teachers and won’t grumble about it any more than we grumble about pay the sewer bill, knowing good sewers and good schools are good for everyone.

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