I’m surprised you didn’t bring up the most commonly cited defintions of capitalism and socialism.
Capitalism is the private ownership of the means of production.
Socialism is the public ownership of the means of production.
Whilst there’s a great deal of variation in how people envision their form of captialism/ socialism, the above are the generally agreed upon dictionary definitions of the two economic systems.
And OP discusses market socialist systems which allow capital markets but not private capital!
This isn’t a petty distinction. It allows the definer to claim all of the benefits of markets and dodge the more negative effects of private ownership, pitting centralised price controls as inherent to anti-capitalist systems. And in the worst cases (not here) it allows people to motte-and-bailey their way out of the devastating effects of wealth inequality by claiming that ‘capitalism’ actually just means markets.
I mention all this because I see this definition a lot in rat-adjacent circles and it frustrates me, because people usually just want to talk about why disgusting levels of wealth inequality are necessary or even permissible, and then get a non-sequitur defence of markets in response.
To make it concrete, the OP’s friends are interested in economic inequality. This is absolutely an inherent consequence of private capital ownership, and therefore capitalism. In a debate, then, you’d want to start defending private capital ownership rather than markets. So I think the ‘talking past each other’ arises from a faulty definition, but just not the one that the OP identified.
I think of publicly traded firms as “publicly” (collectively) owned in the sense that many members of the public own shares of them directly or indirectly through things like ETFs and mutual funds. It gets complicated by the fact that ownership of most publicly traded companies is concentrated among a few stockholders.
But how is public ownership of firms compatible with ownership of firms being exchanged on markets?
Because governments can trade. E.g., if the governments of the Netherlands and Germany are looking to sell some firms they own, and the governments of Belgium and Luxembourg are giving competing offers to buy those firms, we have a market without the firms being privately owned.
I agree these definitions are the most canonical ones, but their existence has not prevented the terminological confusion we presently find ourselves in. Participatory socialism and social democracy, for example, do not entail the public ownership of the means of production.
It is confusing I agree, but the confusion isn’t helped by coming up with further conflicting definitions.
I’ve studied & work in finance, and as I understand things, the term capital markets really just refers to the market of longer-term debt/equity instruments (e.g. bonds, shares etc). That term sits in contrast to money markets which refers to short-term instruments (e.g. repos, bills which are just bonds that mature ⇐ 90 days).
There’s nothing particular about capital markets that are particularly more objectionable to socialists than say the money market, so your emphasis on capital markets is misplaced in my opinion.
RE participatory socialism, I was not familiar with this idea, but from a quick read it does seem to advocate for the majority of the economy to operate under public or worker ownership of the means of production. So I think this would generally be considered socialism under the official definition of socialism. Happy to be corrected if I’ve misunderstood Piketty’s system.
Social democracy, whilst it may involve some elements of socialism (welfare state, unions, large public sector, state ownership of some companies), and may be embraced by socialists as a transitory economic system towards socialism, is generally considered a form of capitalism. Historically it gets more complicated, where the terms social democracy and democratic socialism were interchangeable (e.g. the precursor to the Communist Party of the Soviet Union, was the
Russian Social Democratic Labour Party). But with history, they’ve come to mean different things.
So in summary, I think you are wrong to point to Participatory socialism and social democracy as not involving public ownership of the means of production, or being socialism respectivel. And I think you are furthering the confusion of these ideas by emphasizing the importance of capital markets in this discussion.
I do applaud you looking into this and the ideas of Piketty & the nordic model. But be careful about theorising too much on your own when there is a wealth of existing work produced by more informed/ dedicated people (including academics, commentators) you could leverage. For example, jacobin, the socialist magazine, has a few articles on what AI means for socialists: https://jacobin.com/2024/01/workers-labor-artificial-intelligence-technology
An article like that could have been a good starting point for you to support/ critique in the forum post.
Keep looking into this stuff—glad to see it being posted on the progress forum also. These discussions are needed more for sure.
I’m surprised you didn’t bring up the most commonly cited defintions of capitalism and socialism.
Capitalism is the private ownership of the means of production.
Socialism is the public ownership of the means of production.
Whilst there’s a great deal of variation in how people envision their form of captialism/ socialism, the above are the generally agreed upon dictionary definitions of the two economic systems.
And OP discusses market socialist systems which allow capital markets but not private capital!
This isn’t a petty distinction. It allows the definer to claim all of the benefits of markets and dodge the more negative effects of private ownership, pitting centralised price controls as inherent to anti-capitalist systems. And in the worst cases (not here) it allows people to motte-and-bailey their way out of the devastating effects of wealth inequality by claiming that ‘capitalism’ actually just means markets.
I mention all this because I see this definition a lot in rat-adjacent circles and it frustrates me, because people usually just want to talk about why disgusting levels of wealth inequality are necessary or even permissible, and then get a non-sequitur defence of markets in response.
To make it concrete, the OP’s friends are interested in economic inequality. This is absolutely an inherent consequence of private capital ownership, and therefore capitalism. In a debate, then, you’d want to start defending private capital ownership rather than markets. So I think the ‘talking past each other’ arises from a faulty definition, but just not the one that the OP identified.
How do you have capital markets without private capital?
To clarify, in the post, I discussed a hypothetical form of market socialism without capital markets.
If the capital is not privately owned (private property) but rather socially owned, for example public property (owned by a state entity), collective property (owned by a collective), cooperative property (owned by a co-op), etc...
But how is public ownership of firms compatible with ownership of firms being exchanged on markets?
I think of publicly traded firms as “publicly” (collectively) owned in the sense that many members of the public own shares of them directly or indirectly through things like ETFs and mutual funds. It gets complicated by the fact that ownership of most publicly traded companies is concentrated among a few stockholders.
Because governments can trade. E.g., if the governments of the Netherlands and Germany are looking to sell some firms they own, and the governments of Belgium and Luxembourg are giving competing offers to buy those firms, we have a market without the firms being privately owned.
I agree these definitions are the most canonical ones, but their existence has not prevented the terminological confusion we presently find ourselves in. Participatory socialism and social democracy, for example, do not entail the public ownership of the means of production.
It is confusing I agree, but the confusion isn’t helped by coming up with further conflicting definitions.
I’ve studied & work in finance, and as I understand things, the term capital markets really just refers to the market of longer-term debt/equity instruments (e.g. bonds, shares etc). That term sits in contrast to money markets which refers to short-term instruments (e.g. repos, bills which are just bonds that mature ⇐ 90 days).
There’s nothing particular about capital markets that are particularly more objectionable to socialists than say the money market, so your emphasis on capital markets is misplaced in my opinion.
RE participatory socialism, I was not familiar with this idea, but from a quick read it does seem to advocate for the majority of the economy to operate under public or worker ownership of the means of production. So I think this would generally be considered socialism under the official definition of socialism. Happy to be corrected if I’ve misunderstood Piketty’s system.
Social democracy, whilst it may involve some elements of socialism (welfare state, unions, large public sector, state ownership of some companies), and may be embraced by socialists as a transitory economic system towards socialism, is generally considered a form of capitalism. Historically it gets more complicated, where the terms social democracy and democratic socialism were interchangeable (e.g. the precursor to the Communist Party of the Soviet Union, was the Russian Social Democratic Labour Party). But with history, they’ve come to mean different things.
So in summary, I think you are wrong to point to Participatory socialism and social democracy as not involving public ownership of the means of production, or being socialism respectivel. And I think you are furthering the confusion of these ideas by emphasizing the importance of capital markets in this discussion.
I do applaud you looking into this and the ideas of Piketty & the nordic model. But be careful about theorising too much on your own when there is a wealth of existing work produced by more informed/ dedicated people (including academics, commentators) you could leverage. For example, jacobin, the socialist magazine, has a few articles on what AI means for socialists: https://jacobin.com/2024/01/workers-labor-artificial-intelligence-technology An article like that could have been a good starting point for you to support/ critique in the forum post.
Keep looking into this stuff—glad to see it being posted on the progress forum also. These discussions are needed more for sure.
Unfortunately, I believe there’s more terminological confusion between us than I currently have the energy to try to clear up.