Paul Auerbach, Socialist Optimism

Paul Auerbach, Socialist Optimism: An alternative political economy for the twenty-first century, Palgrave Macmillan, 2016, x + 522 pp, 1 137 56394 1, hbk, £85, 1 137 56395 8, pbk, £25.99

The first part of this book, chapters 1 to 4, is a history of socialism understood as central planning and as state ownership of the means of production: a history that appears to have come to an end – unless Auerbach is correct to suggest that in the context of climate change ‘we may yet be forced to choose between the unpleasant prospects of living in a rigidly centrally planned economy and extermination’ (p.125).

Chapter 4 relates the history of state ownership of industry in the UK since the Second World War, and concludes that as a method for confronting the current state of global capitalism that strategy is now ‘defunct’ (p. 156). (This is not entirely true, of course. Auerbach might have mentioned state ownership of parts of the financial industry during the 2008 financial crisis.)

The second part of the book, chapters 6 to 10, shows that the ‘manifesto’ part of the book in part 3, which defines socialism in terms of a strategy for education and greater equality, has roots in the history of socialism. Auerbach shows that it is education (understand as a complex social and institutional process), and equity, that have fuelled economic development: ‘Educational opportunity, economic security, mobility and equality emerge not as gratuitous luxuries that rich countries might choose to indulge in, but as the very sources of material development itself’. (p. 159) Chapter 10 contains a thorough exploration of the causes of inequality ( – new technology and public policy), a discussion of the current difficult state of capitalism, and a suggestions that he short-term strategies being implemented to shore up the status quo need to be replaced by longer term strategies aimed at human flourishing.

The third part of the book is a manifesto that defines socialism in terms of human possibilities. The strategy has three elements: a broad education; more equal economic outcomes; and enhanced democracy. In chapter 12, the mechanism proposed for achieving more equal economic outcomes is full employment, with a Basic Income as a ‘measure of last resort, and at least a partial admission of a failure in the organisation of social and economic affairs: such schemes implicitly concede that a significant section of the population will be excluded from full economic and social participation’ (p. 369). Not so. A Citizen’s or Basic Income would reduce marginal deduction rates, would improve employment incentives for individuals currently on means-tested benefits (including in-work means-tested benefits), would enable the employment market to function more like a classical market, and would therefore distribute employment more evenly across the population. Far from being an admission of failure, a Citizen’s Income would be precisely the kind of mechanism that Auerbach needs in order to achieve the full employment at the heart of his kind of socialism. Similarly, a Citizen’s Income could deepen democratic participation in two different senses. If the electoral register were to be employed as the basis for distributing a Citizen’s Income, then electoral participation would improve; and Jane Gingrich’s research shows that to pay a Citizen’s Income, reduce personal tax allowances, and increase income tax payments (which does not necessarily mean increasing tax rates), would increase the extent to which people voted according to their convictions. A Citizen’s Income would also increase the choices that individuals and households would be able to make in relation to employment patterns and to their use of time, and would therefore improve participation in civil society: not to mention the encouragement that a Citizen’s Income would give to lifelong education.

Auerbach has written a fascinating and wide-ranging book, full of important insights, one of the most important of which might be this:

If a coherent alternative to the free-market model of society cannot be formulated, individuals and groups who find themselves repelled by the consequences of unrestrained capitalism will accept the latter’s claim to be coextensive with rational approaches to social affairs, and may embrace post-modern, religious or other critiques of rationality itself. (p. 275)

If this is correct, then a strategy for a viable alternative is essential, and whether we call it ‘socialism’ is irrelevant. Auerbach’s manifesto has provided us with a good basis for the strategy that we shall need, but the observations above suggest a means of improving it somewhat. So here is an amended Auerbachian strategy for the twenty-first century: education; Citizen’s Income; widespread employment; and participation in civil society. Each one of those four elements would enhance the others; the net cost of the strategy would be manageable; and the package as a whole could be electorally attractive.