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CHAPTER 4 z z It is divisive . It fosters conflict in society; for example, between owners and workers, employers and employees, or simply the rich and the poor. Socialists have therefore proposed that the institution of private property either be abolished and replaced by the common ownership of productive wealth, or, more modestly, that the right to property be balanced against the interests of the community. Fundamentalist socialists , such as Marx and Engels, envisaged the abolition of private property, and hence the creation of a classless, communist society in place of capitalism. Their clear preference was that property be owned collectively and used for the benefit of humanity. However, they said little about how this goal could be achieved in practice. When Lenin and the Bolsheviks seized power in Russia in 1917, they believed that socialism could be built through nationalization. This process was not completed until the 1930s, when Stalin’s ‘second revolution’ witnessed the construction of a centrally planned economy, a system of state collectivization.
‘Common ownership’ came to mean ‘state ownership’, or what the Soviet constitution described as ‘socialist state property’. The Soviet Union thus developed a form of state socialism. Social democrats have also been attracted to the state as an instrument through which wealth can be collectively owned and the economy rationally planned. However, in the West, nationalization has been applied more selectively, its objective being not full state collectivization but the construction of a mixed economy . In the UK, for example, the Attlee Labour government (1945–51) nationalized what it called the ‘commanding heights’ of the economy: major industries such as coal, steel, electricity and gas. Through these industries, the government hoped to regulate the entire economy without the need for comprehensive collectivization. However, since the 1950s, parliamentary socialist parties have gradually distanced themselves from the ‘politics of ownership’, preferring to define socialism in terms of the pursuit of equality and social justice rather than the advance of public ownership. Nevertheless, in the aftermath of the 2007–09 global financial crisis, there was evidence of a reappraisal of the importance of capital in socialist thought, as, for example, in the writings of Thomas Piketty. THOMAS PIKETTY (BORN 1971) A French economist, Piketty’s work focuses primarily on the issues of wealth and income distribution. In his best-selling Capital in the Twenty-First Century (2014), Piketty advanced the central theory that the return on capital grows more quickly than the economy, meaning that inequality will widen remorselessly unless bold action is taken to cut the rich down to size. In this light, he proposed a ‘progressive, global tax on wealth’. Such thinking was further developed in Capital and Ideology (2020), which analysed the history of what Piketty called the ‘inequality regime’, and urged the introduction of a ‘triptych’ of progressive taxes – income tax, an annual property tax and inheritance tax – each having a maximum rate of 90 per cent.
Fundamentalist socialism: A form of socialism that seeks to abolish capitalism and replace it with a qualitatively different kind of society. Nationalization: The extension of state or public ownership over private assets or industries, either individual enterprises or the entire economy (often called collectivization). State socialism: A form of socialism in which the state controls and directs economic life, acting, in theory, in the interests of the people. Mixed economy: An economy in which there is a mixture of publicly owned and privately owned industries.
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