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In the latest episode of the Roosevelt Institute's Bloggingheads series, Fireside Chats, Fellow Mike Konczal talks to Jacobin editor Seth Ackerman about Seth's recent article "The Red and the Black," which asks what kind of mechanisms would replace the pursuit of profit in a socialized economy. In the clip below, they discuss Seth's proposal for socializing the financial sector, transforming the heart of capitalism to give the public ownership over the means of production.

Mike summarizes the idea by noting that "if the government used eminent domain to purchase all the stocks" then "the public would run all the firms," allowing it to distribute the dividends of their success more equally throughout society. Critiquing the idea from a liberal perspective, Mike notes, "We don't tax wealth directly, but we tax the surplus that goes to corporations" and put it towards various public goods. If we want to create a more fair distribution of wealth, why not just do it through the tax code? Seth argues that this kind of "social democratic solution" attempts to mitigate the negative effects of capitalism but doesn't solve the underlying problems. 

For more, including how Seth's ideas apply to public education and what we can learn from past failures in both centrally planned and market economies, check out the full video below:

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Comment Preferences

  •  I think that's called Communism? (1+ / 0-)
    Recommended by:

    A central committee controls all the wealth? Or maybe we can move to a bartering society with no personal objects, a la Pol Pot. Sounds like that will fix our problems.

    "You can die for Freedom, you just can't exercise it"

    by shmuelman on Wed Jan 30, 2013 at 10:13:45 AM PST

  •  So *that's* how many angels can dance (4+ / 0-)
    Recommended by:
    VClib, valion, wader, FG

    on the head of a pin.

  •  It would eliminate Wall St since trading stocks (3+ / 0-)
    Recommended by:
    VClib, nextstep, wader

    and raising capital would be uneccesary (sic).

    We would look like the 90s Soviet Union in short time.

    "The way to see by faith is to shut the eye of reason." - Thomas Paine

    by shrike on Wed Jan 30, 2013 at 10:24:34 AM PST

  •  Using eminent domain to buy all the stocks? (3+ / 0-)
    Recommended by:
    nextstep, Gooserock, johnny wurster

    There are two issues with this idea:

    First, it would not be constitutional under eminent domain.

    Second, the total value of all the public stocks on the US stock exchanges is more than $16 trillion. The US has annual tax revenues of less than $3 Trillion. How could the federal government ever afford to buy all the stocks at fair market value as required under eminent domain?

    "let's talk about that"

    by VClib on Wed Jan 30, 2013 at 10:33:50 AM PST

  •  Why eminent domain? (0+ / 0-)

    Why not simply buy majority ownership on the open market of companies that, for instance, survive largely on government contracts?  Then 'fiduciary duty' would require providing the lowest costs to the shareholders, ie taxpayers, by not padding contracts and executive salaries and perks.

  •  Ownership of the means of production??? (0+ / 0-)

    Big problems with these ideas:

    Since a small percentage of the population currently owns the majority of corporate assets, this same small group would end up with trillions in their bank accounts, and those trillions would be worthless to buy anything but "houses and cars and computers and stuff like that".  So considering that the wealthy would functionally be a great deal poorer, short of revolutionary violence, by what mechanism would this transition be accomplished?

    You blithely propose an ill-defined improvement over Leninist central planning which you describe as "a complicated matrix of operations".  You seem to be saying that the solution to the failings of a market economy lies in a better central planning mechanism, combined with the socialization of finance.

    Considering the lack of specifics in what would be a revolutionary undertaking, I fail to see why social democracy, progressive taxation, and prudent, law-based regulation of a free market economy has not proved to be a just, efficient, and productive way to organize our society.

    We do have many problems with the distribution of wealth.   Far too much wealth is flowing to the top few.  Taxation and regulation are far too weak.  Our society lacks fundamental fairness, and freedom for those at the bottom.  However, proposing a communist revolution is unlikely to be a solution, and history has shown us it brutally robs freedom in other ways.

    Labor was the first price paid for all things. It was not by money, but by labour, that all wealth of the world was originally purchased. - Adam Smith

    by boatwright on Wed Jan 30, 2013 at 12:24:56 PM PST

  •  "...the public would run all the firms,..." (1+ / 0-)
    Recommended by:

    Never have. Never will. Irrespective of the economic system.

  •  Yeah. Soviet Union tried it. (0+ / 0-)

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