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Throughout most of the twentieth century both critics and defenders of capitalism believed that “another world was possible.” This alternative was generally called “socialism.” The Right condemned socialism as violating individual rights to private property and unleashing monstrous forms of state oppression; the Left saw it as opening up new vistas of social equality, genuine freedom and the development of human potentials. But both believed a fundamental alternative to capitalism was possible. This was especially important for the Left. in spite of intense debates over alternative meanings of socialism and strong criticism by the democratic Left of “actually existing socialism,” the idea of socialism provided a broad framework for Left politics, bringing together the critique of capitalism and a vision of life and institutions beyond it.

Things have changed. At the beginning of the twenty-first century, the socialist project no longer has much political credibility. This is not because people have universally come to view capitalism as a benign social order within which humanity would flourish. Indeed many of the traditional socialist criticisms of capitalism now seem more appropriate than ever: inequality, economic polarization and job insecurity have been deepening in many developed societies; capital has become increasingly footloose, moving across the globe and deeply constraining the activities of states and communities; giant corporations dominate the media and cultural production; the market appears like a law of nature uncontrollable by human device; politics is ever more dominated by money and unresponsive to the concerns of ordinary people. The need for a vibrant alternative to capitalism is as great as ever. Yet the particular institutional arrangements that have come to be associated with socialism are seen as incapable of delivering on their promises. Instead of being viewed as a threat to capitalism, talk of socialism now seems like archaic utopian dreaming, or perhaps even worse: a distraction from dealing with tractable problems in the real world.

The demise of socialism as an emancipatory vision poses a problem for the Left. It is not that it lacks good ideas for social changes and public policies that would improve life for most people, but that these proposals have not been coherently organized in a way that makes for a compelling ideal. Without a conception of a systemic alternative to capitalism it is hard to assess which reforms move in the direction of more fundamental transformations, or to see the connections and tensions among the many different kinds of progressive proposals on the table at any given time. Rethinking and reinvigorating the idea of socialism may help solve these problems.

People tend to invoke the “social” element in “socialism” or “social democracy” in a loose and ill-defined way, to suggest a political program committed to the broad welfare of society rather than the narrow interests of particular elites. Sometimes, especially in more radical versions of socialist discourse, “social ownership” is invoked as a contrast to “private ownership”; but in practice this has generally been collapsed into state ownership, with the term “social” doing relatively little analytical work in the elaboration of the political program. Yet the “social” in social democracy and socialism can also be used to identify a cluster of principles and visions of change that differentiate socialism and social democracy from both the capitalist project of institutional development and a purely statist response to capitalism. These principles, which revolve around what I call “social empowerment,” suggest a range of possibilities for socialism that have not generally been given a central place in radical thought.

There are three kinds of power deployed within economic systems: economic power, or control over the use of economic resources; state power, or control over rule-making and rule-enforcing over territory; and social power, or the capacity to mobilize people for voluntary collective actions. In other words, you can get people to do things in three ways: bribe them, force them or persuade them. Every economic system involves all three forms of power, but one or another tends to be dominant. We can therefore distinguish three ideal types of economic structures— capitalism, statism and socialism—according to how the means of production are owned and how economic activity is controlled.

• Capitalism: the means of production are privately owned and economic activity (i.e. investments, production and distribution of goods and services) is controlled through the exercise of economic power.

• Statism: the means of production are owned by the state and economic activity is controlled through the exercise of state power over the investment process and production.

• Socialism: the means of production are socially owned and economic activity is controlled through the exercise of “social power,” i.e. democratically.

These three forms of economic structure never exist in the world in pure forms, but are always combined in various configurations. The possibility of socialism depends on our ability to enlarge and deepen the socialist component of the hybrid, while weakening the capitalist and statist components.

At the end of this essay, I will use a series of diagrams to explore seven configurations of policies, strategies and reforms that might make the hybrid more socialist: (1) Statist Socialism; (2) Social Democratic Statist Regulation; (3) Associational Democracy; (4) Social Capitalism; (5) The Core Social Economy; (6) The Cooperative Market Economy; and (7) Participatory Socialism. While the pictures I sketch certainly do not coalesce into a comprehensive blueprint for an economy beyond capitalism, they do lay out the basic coordinates in terms of which any blueprint or sketch would have to be situated. They differ from more traditional approaches to socialism in three important respects.

First, all the configurations seek to democratize economic life. While socialists have generally stressed the importance of democracy, democracy is not usually seen as the central content of socialism. Social empowerment means subordinating both economic power and state power to social power, power rooted in voluntary cooperation and collective action. Of course, the socialist ideal involves much more than this; equality and social justice are also core values, for example, as might be environmental sustainability. But the central problem is how to transform the economy, both directly, by allowing social power to shape economic activity, and indirectly, by democratizing the state.

Second, the framework suggests a commitment to institutional pluralism and heterogeneity. instead of a unitary institutional design for transcending capitalism, the configurations of social empowerment open up space for a wide diversity of institutional forms. Worker cooperatives and social economy projects, as well as state-run enterprises, social-democratic regulation of corporations, solidarity finance and participatory budgeting all contribute to undermining the dominance of capitalism and increase the weight of social power within the economic hybrid.

Finally, institutional pluralism also suggests strategic pluralism. Within some of these configurations, to strengthen social power requires state power. But other configurations can be advanced even without state power. This is especially true for some of the social economy initiatives—workers cooperatives, community-based urban agriculture, solidarity finance, community land trusts, etc. Activists, especially those on the radical Left, have often regarded these kinds of locally oriented, community-based initiatives as being “non-political,” since they do not always involve direct confrontation with political power. This is a narrow view of politics, in my judgment.

We can show that another world is possible by building it in the spaces available, and then pushing against the state to expand those spaces. For many people these kinds of “interstitial initiatives” also have the advantage of generating immediate, tangible results in which each person’s contribution clearly matters. A Left that is anchored in the multidimensional and multilevel problem of deepening democracy can encompass this wide range of strategies and projects of transformation. And since democracy is such a core American value—both symbolically and substantively—a Left anchored in a broad democratic project may also be better positioned to break out of its isolation from mainstream American politics.

1. Statist Socialism

In Statist Socialism, the economy is directly controlled by the exercise of state power, while state power is itself subordinated to social power by being democratically accountable to the people. This is the configuration that was at the core of traditional Marxist ideas of revolutionary socialism—but those revolutions hardly went according to plan.

2. Statist Regulation

In Statist Regulation, social power regulates the economy through both state power and economic power. Capitalist economic power directly controls economic activity—capitalists continue to make investments, hire managers, etc.—but is itself regulated by state power, which is in turn subordinated to social power. Statist regulation of capitalist economic power, however, need not imply significant social empowerment. As in the case of statist socialism, the problem here is the extent to which the power of the state is a genuine expression of democratic empowerment of civil society. In many cases, statist economic regulation is itself subordinated to economic power: state power regulates capital, but in ways that are systematically responsive to the power of capital itself. The heavy involvement of industry associations in shaping the regulatory rules within federal regulation of airlines, energy, agriculture and other sectors would be examples.

3. Associational Democracy

Through a wide range of institutional devices, collective associations in civil society can directly participate in various kinds of governance activities. The most familiar form of Associational Democracy is probably the tripartite neo-corporatist arrangements in some social democratic societies such as Germany or Sweden, in which organized labor, associations of employers and the state meet together to bargain over various kinds of economic regulations, especially those involved in the labor market and employment relations. Associational Democracy can be extended to many other domains: “watershed councils,” for example, bring together civic associations, environmental groups, developers and state agencies to regulate ecosystems; and “health councils” involve medical associations, community organizations and public health officials to plan various aspects of health care. To the extent that the associations involved are internally democratic and represent the interests of civil society, and the decision-making process in which they are engaged is open and deliberative (rather than heavily manipulated by elites and the state) Associational Democracy can contribute to social empowerment.

4. Social Capitalism

In Social Capitalism secondary associations of civil society directly affect the way economic power is used. for example, unions often control large pension funds. These are generally governed by rules of fiduciary responsibility which severely limit their use for purposes other than providing secure pensions. But those rules could be changed, and unions could potentially exert power over corporations through the management of such funds. Take, for example, what are known as the “solidarity funds” of some unions in Canada, especially Quebec, where unions use part of their pension funds for private equity investment in geographically-rooted capitalist firms as a way of influencing their practices and development strategies.

5. The Core Social Economy

The Core Social economy represents an alternative way of directly organizing economic activity that is distinct from capitalist market production, state-organized production and household production. its hallmark is production directly organized by collectivities to satisfy human needs, not subject to the discipline of profit-maximization or state-technocratic rationality. The state may be involved in funding these collectivities, but it does not directly organize them or their services. The system of day care provision in Quebec is a good example. In 2008 parents only paid seven Canadian dollars per day for full-time preschooling provided by community-based nonprofit day care centers, but provincial government subsidies ensured that providers were paid a living wage. Another striking example is Wikipedia. Wikipedia produces knowledge and disseminates information outside of markets and without state support; their funding comes largely from donations from participants and supporters.

6. Cooperative Market Economy

In a fully worker-owned cooperative firm the egalitarian principle of one person, one vote means that power relations are based on voluntary cooperation and persuasion, not the relative economic power of different people. And if individual cooperative firms join together in larger associations of cooperatives—perhaps even a cooperative-of-cooperatives, collectively providing finance, training and other kinds of support—they begin to transcend the capitalist character of their economic environment by constituting a Cooperative Market economy. This extends the social ownership already present in individual cooperative enterprises and moves economic governance closer to a stakeholder model, in which cooperative enterprises are governed by democratic bodies representing all categories of people whose lives are affected by them. The Mondragon Cooperative Corporation in the Basque Country, made up of around 270 separate worker-owned firms, would be an example of such an overarching cooperative.

7. Participatory Socialism

In Participatory Socialism, the state and civil society jointly organize and control various kinds of production of goods and services. The role of the state is therefore more pervasive than in the Core Social Economy, since it does not simply provide funding and set parameters for economic activity but is also directly involved in organization and production. On the other hand, Participatory Socialism is also different from Statist Socialism, for here social power plays a role not simply through the ordinary channels of democratic control of state policies, but also directly, inside the productive activities themselves. A good example is the participatory budget in urban government, started in the Brazilian city of Porto Alegre in 1989 and subsequently employed in many other places in Brazil and beyond. City budgets are created through a system of neighborhood assemblies in which any resident can help decide budget priorities and specific projects, especially for infrastructure, much as in a New England town meeting. The neighborhood assemblies then choose delegates to participate in a citywide budget assembly, with the responsibility of producing a coherent budget.

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