Professor Richard Wolff: Socialism Means Abolishing the Distinction Between Bosses and Employees

by Richard Wolff.
PUBLISHED ON JUNE 27, 2015

This article originally appeared at Truthout.org

Regulated private capitalism. State capitalism. Socialism. These three systems are entirely different from each other. We need to understand the differences between them to move beyond today's dysfunctional economies. With confidence waning in whether modern private capitalism can truly be fixed, the debate shifts to a choice between two systemic alternatives that we must learn to keep straight: state capitalism and socialism.

State capitalism exists when the state apparatus - rather than a group of private citizens - positions state officials to function as capitalist employers. Thus, under state capitalism it is state officials placed in charge of enterprises who hire employees, organize and supervise their activities within enterprises, sell the resulting outputs (goods or services), receive the sales revenues and thus realize any profits. State officials occupy the key directorial positions within such state capitalist enterprises.

In contrast, in private capitalist enterprises, shareholders assign these positions instead to private individuals - not state officials - within structures such as corporate boards of directors. Hybrid capitalist enterprises (part private and part state) also exist. Goods and services produced in state capitalist enterprises are often sold in markets alongside those produced by private capitalist enterprises. Likewise, state capitalist enterprises typically buy their inputs in markets alongside parallel purchases made by private capitalist businesses.

The Difference Between State Capitalism and Socialism

In all countries today, state capitalist enterprises coexist and transact in markets with private capitalist enterprises. The proportions of the different types of capitalist enterprise vary from country to country. Only in some countries are state capitalist enterprises the socially dominant kind of enterprise. In the United States, state capitalist enterprises are definitely not socially dominant, but they do exist: Amtrak, TVA, public colleges and universities, the post office, the Bank of North Dakota, public power companies owned and operated by thousands of US municipalities, and the New York City subway system are all examples. Some state capitalist enterprises in the US obtain subsidies from the government, but then many private capitalist enterprises obtain subsidies, too.

The state directly regulates state capitalism. It does this through the state officials it assigns to direct state enterprise activities. The state indirectly regulates private capitalism. It does this by means of rules and laws that limit the enterprise-directing decisions made by private capitalists. ...............(more)

http://rdwolff.com/content/socialism-means-abolishing-distinction-between-bosses-and-employees