Defining “Alternative Systems”

Nancy Folbre
15 January 2016

The topic “alternative economic systems” is generally construed as “economic alternatives to capitalism.” This presumes we agree on what “capitalism” is. I don’t think we do.

Many neoclassical economists won’t even use the word “capitalism” referring instead to a “market society” or sometimes a “modern” society. I think this a serious mistake. We need words to describe the institutional arrangements in which markets are situated, because these institutional arrangements shape market outcomes. On the other hand, many economists on the left use the word “capitalism” as an all-encompassing label for our global economic system. Capitalism is everything and everywhere.

When capitalism is defined in these terms there is no escape from it. This definition elides the significance of economic differences based on gender, race/ethnicity, and citizenship, treating them purely as aspects of “identity” rather than as social relations of production. I side with a critique launched more than ten years ago by the radical hybrid geographer JK Gibson-Graham in The End of Capitalism As We Knew It. By defining capitalism as hegemonic we make it so. We give it power over our lives and our ideas. We constrict the space available for articulation of alternatives.

Feminist theories of intersectionality suggest that we should describe the world in terms of hybrid, overlapping structures of inequality. This description helps explain both the stability of hierarchical structures and their points of vulnerability. Hence its relevance to discussions of “alternatives.”

In developing this general point further I want to explain 1) why feminist theory urges a more complex description of the U.S. economy than “capitalist” 2) the implications of this description for how we think about “social democracy” and its relationship to socialism 3) what this means for practical political engagement today.

The legacy of Marxian political economy urges us to define the economy in terms of the corporate for-profit sector. Even well-known efforts to articulate a vision of market socialism, a radical departure from centralized democratic planning, focus primarily on the for-profit sector. But the U.S. economy, to take one example, is way bigger than the for-profit sector. It includes a large public sector (whose size is underestimated relative to the private sector because of several arbitrary accounting rules). Much of the spending in this public sector is devoted to the care, protection, and development of human capabilities in health, education, and social services.

Our economic system also includes a substantial number of non-profit organizations and many for-profit firms explicitly committed to larger social goals, including worker-owned and managed businesses. Our economic system also relies heavily on the unpaid labor of people devoted to meeting their own needs and those of their families, friends, and neighbors. Such commitments account for about half of all the time devoted to work in the U.S. today, according to the American Time Use Survey. (For more details, see this previous post).

In sum, a significant share of the work performed in the U.S. today is not governed directly or indirectly by principles of profit maximization. We already inhabit a world that includes significant alternatives to capitalist forms of organizing work, and it would be helpful to spend more time figuring out why. Surely part of the reason is that the demands of care for other human beings——along with the hugely significant implications of teamwork, externalities and public goods–make a completely capitalist system infeasible. Applying a phrase lifted from the lexicon of historical materialism, I attribute this variation and complexity in productive arrangements to the technical forces and social relations of production. This leads to very different conclusions than the traditional Marxian assumption that public provision of health, education and social services represents an element of consumption–a hard-fought element of the social wage fought for by the working class, or an epiphenomenon of the Keynesian welfare state.

Many different dimensions of inequality are contested in these arenas of social reproduction. Political struggles for a higher minimum wage, single-payer health insurance, improved public school finance, free higher education, paid family leave, early childhood education, old age security, “black lives matter” and immigrant rights are not merely social issues. They also represent efforts to develop alternative forms of economic organization.

Social democracy is not about “class compromise” or gutless reformism. It is about socializing the costs and risks of developing human capabilities in ways that enhance economic opportunity and fairness. This is exactly why political struggles over the extent and funding of such programs cannot be boiled down to class interests. They are infused with conflicts based on citizenship, race/ethnicity, gender, and age, among others.

Still, class conflict plays a central role. In an increasingly de-nationalized global economy with a labor surplus, capital finds it increasingly easy to avoid paying the costs of developing human capabilities. Profit-shifting and international tax havens are only the most obvious examples. National capitalist economies will not be able to find a solution to this problem until they reduce the weight of plutocratic influence through (among other things) campaign finance reform and significant redistribution of income and wealth.

Bottom line: the political efforts I have described above are sometimes interpreted as “reformist” because they don’t challenge the all-in-capital-letters LOGIC OF CAPITALISM. But they are the necessary steps in the development of a sustainable, equitable, and efficient economic system, not a diversion from it. I think that many Americans share this view. I think they define socialism largely in terms of social responsibility for the egalitarian development and maintenance of human capabilities.

This is especially true of the younger generation. A Pew Foundation poll in December 2011 reported that 49% of 18 to 29 year-olds in the U.S. held a favorable view of socialism compared to 46% with a favorable view of capitalism. The poll didn’t offer a definition of socialism, but support for it didn’t break cleanly along class lines. Only 24% of whites overall held a favorable view of socialism, versus about 55% of African Americans and 44% of Hispanics. Among all ethnic groups, Hispanics had the least favorable view of capitalism.

These results suggest that socialism now has a much broader meaning than it once did. They also suggest that some important economic alternatives are within our reach. Let’s fight for them.

P.S. I say more about what I call “care socialism” in an interview in In These Times from 2011, but am obviously still working on what it means—and would especially appreciate any comments or criticisms.

This post is based on my presentation at the panel discussion “Envisioning Alternative Economic Systems” co-sponsored by the Union for Radical Political Economics and the International Association for Feminist Economics at the meetings of the Allied Social Science Association in San Francisco, CA, January 5, 2016.

Posted January 15, 2016.

3 comments on "Defining “Alternative Systems”"

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    Ann Ferguson

    Nancy: Very interesting entry on Alternative Systems. Have you seen Gar Alperowitz “Another World is Possible” (Mother Jones dec 2006)? He seems to be arguing for a decentralized system of community property, such as some cities and states are moving toward. But I wonder why not just define this as a type of market socialism since that concept does not have to just refer to the Tito model but could be redefined as anything that allows for more economic democracy in the sense of democratic control over property (whether workers’ coops a la David Schweikhart or city-based affordable housing trusts etc). I would also like to see you connect this more to care work, rights to care and be cared for etc. Although you mention that you havent said much about your alternative system of how that would be handled. . .

    And how reorganize property so as to promote racial justice? Racial reparations a la Te-Nehisi Coates? And wouldnt that require a federal mandate re grants to communities of color re housing, schools, health care, environmental quality etc that couldnt really be tackled too well by a decentralized process?

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    Michael Rush

    Dear Nancy,

    First of all it was joyfully good news for 2016 to receive your blog, many thanks (and enough with the festive opening tone). No typos or broken links and the content works well together, the piece on Barbara Bergman suggests the care revolution will be noisy. The piece from In These Times and the piece on Defining Alternative Systems are both welcome starters for argument and international debate and (what looks from this side of the Atlantic Ocean like the turbulence of) the USA, where it is being made refreshingly clear that politics, race and gender still matters. The concept of hegemony when applied to capitalism sometimes invokes an a-historical sense of international compliance to over-arching power instead of Gramsci’s central thesis of building national and international alliances to build alternative moral hegemony(s), which your blog anticipates. In this respect theories about varieties of capitalism, welfare regimes, systems of social care (including parental and family leave) and equality architectures (including epistemology) point to existing strengths and alternatives for international feminism and social democracy as well vulnerabilities and defeats for capitalist hegemony. The title of the blog – feminism and political economy – points to developing (economic and social science) models of feminism(s) and political economies which recognize (and sideline) capitalism as only one piece of care, employment and welfare (state) jigsaws that encompass equally large not-for-profit sectors, public sectors and informal care and welfare by children, men and women (mostly the latter), which is increasingly being positively de-familized in social care sectors and positively re-familized through parental and family leaves. Your blog seems to offer an opportunity to sideline debates about abstract notions of free market models, individual income distribution models, rational choice and individual preference theory in order to open up new debates about models of political economies based on feminism, social democracy, social care systems and de-patriarchalisation. It’s great to see the consistent significance you give to the role of social insurance for building inclusive social care and social security systems, including family and parental leaves, which is leading to fresh thinking about Polyani, de-commodification and double movements towards noisy revolutions in political economies and social care.

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    I would characterize capitalism by the role of money and the central bank. Money is not an object of nature, therefore money is false, free, and abundant at its source, which is the central bank. Since money is false, it can be secretly manipulated, as Keynes said, to cause any kind of damage to the society. How can you create something true using something false like money? You cannot. Since money is false, it cannot also be necessary to run any kind of economy.

    Therefore the alternate economy should be based on the idea of running economy without any kind of money. That is, get rid of central bank, as suggested by Milton Friedman. And then create money-less economy (MLE). Since there is no money, there will be no taxes, debts, IRS, banks, central banks, stock markets, investments, etc. Under MLE we all work free and get everything free. Thus MLE will remove poverty, unemployment, racism, discrimination, austerity, wars, migration, terrorism, religious violence, gun violence, pollution etc. MLE will also give you One World.

    This is how MLE can be implemented: I go to my work place, and work full time for free. I swipe my plastic card, at the end of the week, my company writes a YES on the card, meaning, I have worked full time in the last week. Next, I go to my local grocery store, and take whatever I need, swipe my plastic card, and buy them free. I go to my bank, swipe the card again, and pay my mortgage for free. Thus the exact same economy that we have now, continues to run smoothly without any kind of money. Take a look at the MLE chapter in the free book on soul theory at the blog site

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