My Journey to Democratic Socialism (pt.1)

My biggest change of opinion in a while.

The most consistently interesting discussion throughout my years of researching politics and economics is capitalism vs. socialism. This debate centers on how we should organize production. Should it be collectively owned or privately owned? Although I've always had leftist leanings, I identified as a capitalist for the bulk of my online career, but this changed recently. I now call myself a socialist, and I thought my journey to socialism would be an interesting read.

I’ll cover the main arguments and lines of thought that made the biggest difference in my transition from one to the other. I didn’t think I had many big changes of opinion left in me, but all it takes is a few good arguments.

My Economic Foundation

In a classic economics education (the kind 99% of economics graduates receive), students don’t spend much time talking about socialism or capitalism. You might have the odd professor here or there who makes an offhand comment, or maybe you’ll have a slide defining socialism and capitalism in a lecture, but that’s about it.

Left to my own devices, my ‘research’ on the socialism vs. capitalism debate consisted of watching debates on the subject, and despite my best efforts, I couldn’t find a socialist who could defend socialism in a way that seemed coherent and/or sensible. This lack of good socialist representation led me to identify as a capitalist in a fundamental sense, and it also led me to have a woefully incomplete understanding of socialism.

During this time, I also started a YouTube channel where I made scripted videos about various economic topics and engaged in a wide array of discussions. Early on, these discussions involved debating conservatives from a progressive perspective and socialists from a capitalist left perspective. Throughout the course of these debates, none of the socialists I spoke to, from Marxist-Leninists to Democratic Market Socialists, had a great model for socialism that they could defend in a way that resonated with me.

The models socialists defended were either poorly thought out or not thought out at all, with a heavy reliance on the negatives of capitalism as a basis for their socialism. Capitalism has significant drawbacks, but I needed a positive, well thought out vision of socialism before I would start questioning my economic foundations.

It turns out online debates, either watching or participating, are not the best way to research a topic. At best, they’re fun supplemental material to an already existing research process. Despite this, debates always have the potential to open one’s heart and mind to change, and I eventually stumbled upon a debate opponent who would make me reconsider my original positions.

The Bruenig Shock

After debating dozens of known and unknown socialists on my channel, I made my way to Matt Bruenig. An online friend of mine recommended him as perhaps the best at defending a socialist worldview, so I figured, why the heck not? I messaged Matt on Twitter. He offered his time, and we had a chat.

During this conversation, Matt did a couple of things that made me reconsider my closed door to socialism. 1) He tightly framed his socialism. 2) He framed his socialism at the institutional level, and 3) his model of socialism seemed grounded in our current reality in a way that made it feel quite feasible relative to other socialist models.

A Tight Socialism

In speaking to many dozens of socialists, it’s common that each socialist will have a particular definition of socialism.

Socialism is when the means of production are collectively owned, labor is decommodified, and money is abolished. No, socialism is when the means of production are collectively owned, but only if the collective ownership is worker cooperatives, and only when the workers all have equal ownership. No, socialism is nothing so specific. Rather, socialism is the general antagonism and rejection of capitalism.

These definitions leave room for a lot of practical and/or conceptual holes. This problem led to one of my first video series called ‘Critiques of Socialism and its Arguments,' where I point out a lot of the problems with these socialist models.

Matt avoids these problems by having a skinny, yet rather pluralistic, view of socialism. “Socialism is the collective ownership of the means of production.” As Matt points out, this could mean many different methods of organizing production.

This could mean general government services like transit systems, public schools, or fire departments. It could mean publicly owned businesses like municipal grocery stores, the postal service, or state oil companies. It could mean publicly held capital in the form of publicly managed wealth funds, as we see in Alaska or Norway, and it could also mean cooperative enterprise (whether worker or consumer ownership).

The big feature distinguishing capitalist vs. socialist ownership is not the model of collective ownership per se, but rather whether the ownership is in private hands or collective hands. Social ownership, in this sense, encompasses several forms, with fewer particulars than are often required by many contemporary socialists.

Socialism could mean a lot of things, and although socialism couldn’t mean anything, having a flexible definition of socialism with a stated and reasoned preference makes for a more productive conversation than a debate on how to define socialism or capitalism, and if that stated preference is reasonable, maybe you’d have a good reason to prefer your socialism over existing capitalism.

Socialism at the Institutional Level

In discussions between capitalists and socialists, it’s common to get caught up in a country-level discussion. A question like 'which country best suits your model’ comes up a lot, and it turns out, this is unproductive. At best, a lot of socialists say society hasn't tried their version of socialism, leading to an unsatisfying, often theoretical discussion.

At worst, the socialist will claim countries like Venezuela, Cuba, China, etc., and we end up debating the political, rather than economic, institutions of these ‘socialist’ countries. This kind of socialist is also likely to call a country like Norway or Sweden ‘capitalist’ in a binary fashion, which gives a lot of ground to capitalists, since countries like Norway or Sweden seem rather nice, with their wealthy societies, high levels of equality, and generous welfare states.

Matt avoids both of these issues. Since socialism is just the collective ownership of the means of production, we don’t have to get bogged down in whether or not a country is or isn’t ‘actually’ socialist. We also don’t have to defend the holistic character of an individual country’s economy. Rather, we can discuss specific institutions within a country’s economy and judge whether or not that is a way of organizing in a socialist or capitalist manner.

For instance, in the United States and in most every country, we have publicly operated schools. The public builds, maintains, organizes, regulates, and operates schools through democratic public management. This usually looks like a democratically elected school board making management decisions and consulting the public on how to operate its community’s schools.

We could have privately owned, for-profit, market-distributed education, but we don’t. We choose to make the shareholders of public schools the community at large, and since this is a form of collective ownership, we can call public schools a form of socialist organization.

This way of understanding socialism not only makes the conversation much more productive, it also forces a capitalist to recognize that they themselves believe in socialist production for a lot of things, from the military, to the fire department, to the police. Now, the capitalist has to defend the specific capitalist ownership he or she still wants in things like privately owned car companies, investment firms, banks, etc.

Perhaps these things should be privately owned, but the framing of socialism at the institutional level forces the average capitalist to think harder about why exactly it should be the case that private shareholders organize production rather than workers, consumers, the local community, or the public at large.

It made me think harder, and it opened my mind to the question of which institutions should be privately owned and which should be publicly owned, rather than a simplistic binary classification.

A Grounded Model

The final thing I took away from Matt was a very grounded model of socialism. When speaking to socialists, they often rely on narrow empirical examples and take large leaps to imagine these examples would work for the whole of the economy, such as assuming we could organize every firm as a worker cooperative. Either that, or they have scant empirical examples to speak of, making it difficult to do much besides say "well, maybe, but I’m not so sure” at the end of discussions.

That’s where Matt comes in. Matt’s model of socialism is one where the public socializes financial capital (at least) through the government purchasing open market securities until such point that the public, through the democratic government, comes to own/manage all capital.

This model is very defensible from a lot of the basic anti-socialist arguments. If we look at how we organize finance capital today, we have liquid markets where anyone can purchase stock anytime, and owners offload management to professionals overseen by a board. Vanguard, for instance, owns (or manages on behalf of owners) a diversified pool of financial assets from stocks to bonds to ETFs.

Vanguard manages this capital rather passively. Each company’s shareholders elect a board that then appoints management, who then operates the company on the ground. Matt points out that most private shareholders aren’t active, entrepreneurial investors, so let the public at large own financial capital and elect a representative government to manage this wealth on their behalf.

This model also doesn’t rely on expropriation, since shareholders in these liquid markets offer their ownership for sale to anyone who agrees to the strike price, including public entities.

Although I have my problems with some of the specifics of Matt’s model, it’s not a very large leap from how we currently organize things, and there are thousands and thousands of empirical examples of publicly managed financial assets. Sovereign wealth funds exist all over the world. Almost every public university has an endowment fund, and many countries (either at large and/or their public employees) have a public pension fund.

Taking a country like Norway, which collectivizes the vast majority of its society’s wealth through this mechanism, and bumping it up from around 2/3rds of national wealth to 100% doesn’t seem quite as unimaginable as going from a trivial amount of worker cooperatives to the entire economy run by worker cooperatives, much less abolishing money or decommodifying labor.

Perhaps those latter goals are worth exploring, but the simplest, easiest path to socialization is through financial capital. I have many more reasons other than ‘it’s simple enough’ to prefer a method of wealth management similar to Matt’s, but this was a key jumping off point in opening my mind to socialism.

A new beginning

This conversation alone didn’t convince me of socialism, but it presented the best defense of socialism I’d seen thus far, and it made me consider a model of socialism more seriously than I ever had.

One lingering problem I had (and still do) with Matt’s model, which prevented me from converting to socialism fully, was Matt’s defense of a ‘universal owner.’ Under his socialism, society at large would own the means of production through democratic management by the state. He also favors ‘active management,' wherein the state would make investment decisions directly rather than allowing its capital to accumulate from the decisions of private actors.

Matt’s view is that incentives make the universal owner optimally invest since it owns everything. The universal owner wouldn’t want inefficiently allocated capital, so it would endeavor to allocate such capital as efficiently as possible, with the public ultimately responsible for holding the state accountable through elections.

This is the one area of Matt’s argument I find underdeveloped. There are many historical examples of the socialization of capital, and it would seem the state, even the Democratic state, is not totally efficient in its management of public wealth. As I considered this, I made my mind up that although I wasn’t a socialist, the ‘capitalist’ label no longer made sense.

At the very least, a mixed production model was best, which meant both capitalist and socialist institutions in a society. I still believed in capitalist production to some degree, but I also recognized Norway as the nearest to my ideal society. Considering a large majority of Norway’s GDP comes from its collectively owned institutions and 2/3rds of the nation’s wealth is socially owned, that meant my ideal society was mostly socially owned/controlled.

As I stewed on this and developed as a content creator, I put a pause on the socialism vs. capitalism debate and found myself more interested in egalitarianism (unrelated to my renewed interest in socialism) and what I read would circle me back to socialism much quicker than I would’ve guessed.