Posted 4 years ago on Aug. 22, 2012, 8:20 p.m. EST by DemandTheGoodLifeDotCom
from New York, NY
This content is user submitted and not an official statement
In this post I will outline what I think is a realistic plan to abolish capitalism.
In summary, I believe we should replace capitalism with Democratic Market Socialism (DMS). DMS has been rigorously peer reviewed in mainstream economics journals for the past 100 years and every component is already proven to work in the real world.
DMS would enable us to, among other things, guarantee everyone a job with a minimum wage of $115k per year, reduce the week to 20 hours and give everyone a 100% mortgage at 0% interest. It would make everyone wealthy and when everyone is wealthy, you eliminate nearly every problem in society.
That is a significantly better deal than what the vast majority of workers are currently getting, so it will have a lot of appeal. The plan is to simply use that appeal to recruit workers into a single union. Once that union gets large enough, it can do 1 of 2 things.
1) It can simply carry out the original socialist plan and demand, through a general strike if necessary, that we change economic systems immediately.
2) Or it can begin a gradual transition to DMS by electing politicians into office that enact two politically feasible policies: raising the tax rate on investment income and making the govt the employer of last resort. I will show how these policies will enable us to actually begin building a DMS economy right within our current economy that we can quickly grow over time.
Once the DMS sector reaches a large enough scale (roughly 30% of the economy), so that it no longer has to deal much with outside capitalist companies, it will then have the ability to offer benefits closer to the minimum wage of $115k and work week of 20 hours that full DMS would deliver. It is the end of capitalism once it reaches that point because nobody will want to work for a capitalist company.
HOW DMS WORKS
In order to understand how this transition plan works, it's necessary to first understand how DMS works.
DMS works largely the same way as the current economy works now where we have individually run firms that compete for customers in the market. The difference is in how income is allocated in the economy.
In DMS, 100% of the economy's income is paid to workers (instead of half going to workers and half going to investors) and workers are paid based on how hard they work (instead of based on how much bargaining power you have) which you do by limiting differences in income by law to only what's necessary to get people to do undesirable jobs and give their maximum performance in performance based jobs.
In other words, workers are paid the full value of what they produce because we are eliminating the payment of unearned income to investors who do no work and eliminating exploitation. According to American anarchist Benjamin Tucker, this is what makes an economy socialist. It's an economic system summed up in the original, pre-Marxist, socialist slogan, "To each according to their contribution."
PAY WORKERS 100% OF THE INCOME THEY PRODUCE
Paying 100% of the economy's total income to the workers means no income is paid to investors. Half the income workers produce is actually paid to investors who do no work! This alone is cutting worker in income in half.
Of course, you need investment money to run an economy. But just like we don't need to pay people to print their own money in order to make sure there's a supply of money in the economy, we don't need to pay people to invest in order to make sure there's a supply of investment money in the economy.
Just like the central bank can provide the economy with the necessary supply of money, it can provide the economy with the necessary supply of investment money. We don't need private investors.
In DMS, all businesses and loans will be funded with public investment funds as explained here.
ALLOCATE INCOME BASED ON HARD WORK
And the second thing we need to do to make the economy DMS is to allocate that income based on how hard you work.
In capitalism, income is allocated based on bargaining power. It allows a tiny wealthy ruling class to use their power to exploit 97% of the labor force.
97% of all workers are currently getting exploited because they are getting paid less than what they deserve. What they deserve is the amount of income they would receive if we allocated income based on how hard you work, which you do by limiting differences in income by law to only what is necessary to get people to do undesirable jobs and to give their maximum performance in performance based jobs.
Paying workers 100% of the income and paying them based on how hard they work is the only fair economic system. Allocating income this way will enable us to pay every worker from $115k to $460k per year for working just 20 hours per week. And that is more than what 97% of workers are currently getting paid.
This will obviously have a lot of appeal with workers since the vast majority of them are currently getting paid far less than that. So the plan is to use that appeal to build a single worker union and then use that union to demand a change to the economy.
You, me and everyone else who is interested in this idea just approaches your friends, family and co-workers and asks them to join a worker union that guarantees them a job so they are never unemployed, gets them a minimum income of at least $115k or $230k per year, depending on their job, reduces their work week to 20 hours, guarantees them a 100% mortgage with 0% interest, pays them a pension at retirement and pays them and their kids an actual income to go to school.
When asked how this is possible, you simply say by demanding that workers get paid fairly: by paying them 100% of the income, since they do 100% of the work, and by paying them based on how hard they work.
Getting paid far more money and allocating income fairly is an idea that will appeal to nearly everyone you talk to.
Once this union gets large enough, we can carry out the original socialist plan: Simply demand, through a general strike if necessary, that we change economic systems immediately.
However, demanding a new economic system is a revolution. Although workers would significantly benefit from that revolution, they may be unwilling to take such drastic measures to secure those benefits.
So an alternative plan is to instead have them elect politicians into office that enact two specific policies that enable us to gradually build a DMS economy right within our existing capitalist economy: The two policies are maximizing the tax rate rate on investor income and making the govt the employer of last resort.
Raising the tax rate on investment income (investors actually only pay a maximum rate of 15% on their income, less than half what workers pay on their income!) will result in less private investing since investing will now be less profitable. The less private investing we have in private capitalist companies, the more public investing the govt can then make in public socialist companies.
Making the govt the employer of last resort will give it the authority to start making those investments in new companies in order to meet its new legal obligation to fully employ everyone who is underemployed.
These companies would be run like socialist companies which pay 100% of its revenue to its workers without paying anyone a profit and allocating that income based on how hard you work.
These companies would create a socialist sector within our economy.
Keep in mind that these public companies would not be tax funded govt agencies. They would be companies that would have to become financially viable by generating enough revenue to cover its expenses and they would compete in the market against privately owned companies.
These pioneering companies would be proof that DMS works. It would be a live, working example that companies can be efficient, innovative and responsive to customer demand even though nobody is getting paid a profit and nobody is getting paid 50,000 times more than others.
It would enable us to recruit even more people to the DMS cause. It may even give enough workers the confidence to go ahead with the revolution and just demand that every company operate that way.
But we won't need a revolution.
As these companies grow and as the govt launches more businesses, the socialist sector will grow. At first, the sector will be small. So it will have no choice but to trade with capitalist companies. That will prevent the socialist sector from having full control over how income is allocated because some income is still being allocated by capitalist companies.
So at first, since it doesn't have full control over the allocation of income, the socialist sector will not be able to provide the full benefits to workers that a full DMS economy can.
But as the sector grows larger, it will have to do less and less business with capitalist companies which means it gets closer and closer to having full control over the allocation of 100% of the income. It will get closer to the point where it becomes a completely independent economy where everything everyone needs is produced within the DMS sector and you do not have to buy anything from any capitalist company.
Once the DMS sector becomes fully independent (which it can likely do by growing to less than 30% of the total economy), it will have full control over the allocation of all income. That is when it can offer the full worker benefits listed above. And since 18% of workers are currently underemployed, just employing them will get us half way there.
Once the socialist sector gets large enough, so that it can offer benefits closer to the minimum wage of $115k and 20 hour week, that a full DMS economy would deliver, it is the end of capitalism because nobody will want to work for a capitalist company anymore.