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II. Twenty-First Century Socialism

New Economic Model

Twenty-first century socialism proposes a new model to replace the neoliberal capitalist model. Its main characteristics will be discussed below.

Chávez talks of a humanist socialism that puts human beings and not machines above everything. It follows, therefore, that his model is ruled by a humanist, solidarity-based logic that focuses on the satisfaction of human needs and not on profit. He talks about a social economy focused more on use-values than exchange-values.

One hundred years before the ecological problem was raised internationally, Marx said that the capitalist mode of production, as it developed technology and social processes of production, simultaneously undermines the original sources of all wealth—the soil and the laborer.103 Today we all know how right Marx was. Our universe is in danger of disappearing if we do not take serious steps to slow consumerism down and avoid destroying nature. It is not only the capitalist countries that are responsible for this situation but many socialist countries too, especially those which, driven by productivism, were not aware of the ecological damage they were causing.104

The new economic model to be built must be extremely mindful of the ecological crisis and the struggle against consumerism. We must promote the idea that our goal, as Bolivian President Evo Morales says, is not to live better but to live well.105 The indigenous communities’ traditional practices have a positive attitude toward nature, and we must rescue and respect it.

The Elementary Triangle of Socialism

To build this new economic model, it is necessary to begin restructuring not only the relations of production but also the relations of distribution and consumption. The elements of a new dialectic of distribution-production-consumption must be assembled.106 According to Chávez, these elements are: (1) social ownership of the means of production; (2) social production organized by the workers; and (3) the satisfaction of communal need. These make up what Chávez has called the elementary triangle of socialism.107 In what follows, we shall examine each of these elements and how they must be combined so we can talk of a socialist model that is an alternative to the capitalist model.

Social Ownership of the Means of Production: If we are Marxists, we know that the way the social product is distributed depends on the way the means of production in a given country are distributed. Therefore, if our aim is to create an economic model in which social wealth is distributed more equitably, satisfying the needs of all the country’s inhabitants, it is absolutely essential that these means of production—or at least the most important ones—are not hoarded by a few people and used for their own benefit but are collective property, owned by all the people.

Twentieth-century socialism tended to identify collective property with state property, in spite of the fact that Lenin stressed that statizing (or transferring ownership to the state) was not the same thing as socializing ownership. It is therefore very important to distinguish between formal ownership and real appropriation. Although the state formally represents the collective, what is needed if the collective is really to appropriate the means of production (factories, mines, land, services, etc.) is more than a simple legal act to hand over these means of production to the state.108

What happened in the Soviet Union, and in most of the countries that followed its example, was not real appropriation of the productive process by the workers but simple statization of the means of production. These went from being the property of a few to being the property of the state, which supposedly represented both urban and rural workers. Nevertheless, the productive process itself went through very few changes. A large capitalist factory was not very different from a large socialist factory: the workers continued to be just a few more cogs in the wheel, and they had very little or no participation in decision making in their workplaces. This state capitalism kept the hierarchical organization of production intact; the manager had “dictatorial” power, and orders came from the top down.109 “The preferred role of a worker organization from this perspective is to mobilize human resources to meet the selected goal—i.e., to serve as a transmission belt for state directives.”110

This state capitalism—which Lenin saw as only the first step toward overcoming backwardness and one of the several kinds of relations of production that could exist in the transition period—became the goal of twentieth-century socialism.

Worker-Organized Production: It is not enough, then, that the state be the legal owner of the means of production; it is essential that the workers participate in organizing production. Work, the central element of the new economic model, rather than alienating workers, should allow thinking to be combined with doing. In this way, workers, as they work, can achieve their full development as human and social beings. Workers should be protagonists in their workplaces. “Protagonistic democracy in the workplace is a necessary condition for the producers to develop fully.”111

It is interesting to see that, in Chile, Allende said that one of the aims of having workers participate in managing state companies was to achieve “the overall development of the human personality,” and that, since workers had the same rights as any citizen, “it would be paradoxical if in the heart of the company where they work they did not have equal rights.”112

Twenty-first century socialism cannot afford to leave untouched labor processes that alienate workers, and it cannot allow the division between manual labor and intellectual labor to continue. The person who works has to be informed of the whole production process, must be capable of controlling it, and be able to express an opinion on production plans. But are workers prepared to play an active role in managing companies? No, they are not. This is precisely because capitalism has never had any interest in sharing with workers technical knowledge about managing companies. Here, I am referring not only to production related matters but also to those related to marketing and company finance. Concentrating this knowledge in the hands of management has been one of the mechanisms that has allowed capital to exploit workers.

Therefore, one of the first steps that must be taken if we are to achieve more self-management of companies is to make it possible for workers to obtain that knowledge. To do that, they must be able to educate themselves.

Satisfaction of Communal Needs: Lastly, we come to the third element of the triangle. If the means of production are collectively owned—by collectively owned, we mean they are the property of everybody—the goods produced in response to the needs of the people and the surpluses produced from them cannot be appropriated by the specific group of workers who produce them, but have to be shared with the local or national community.

Who decides what these needs are? In twentieth-century socialism, it was the central state that established these needs and decided what to produce to satisfy them. In twenty-first century socialism, the people themselves must set the priorities for what needs will be satisfied.

Let us remember that socialism pursues the goal of full human development. This is achieved not only by the workers acting as protagonists in the productive process but also by their working to satisfy the needs of those who are part of the human family, in an expression of solidarity.

New Concept of Efficiency: Respect for Nature and Full Human Development

Twenty-first century socialism requires a “new concept of efficiency.”113 It cannot continue measuring efficiency by productivity, that is, by the number of products made in a given period of time, without considering whether this is detrimental to nature. The efficiency of Japanese transnationals in southern Chile was measured by the amount of wood obtained from logging in a given time. That measurement did not take into account the damage done to Chilean forests and the effect this would have on climate change.

Efficiency in socialism has to take two things into consideration. The first—something many have absolutely no doubt about—is that a company will only be efficient if, as it produces, it does not destroy the future of humanity, and it does not destroy nature. The second—which is generally not taken into account—derives from the dual character of what a company produces. A company, it seems, only produces goods or services as it transforms raw materials into products. But that is not the whole truth; something else is transformed in the production process—the workers: the men and women who, as they turn raw materials into products, either develop themselves as human beings or become deformed. In this sense, a company will only be efficient under socialism if, as well as being materially productive, it allows the workers, through the labor carried out during the workday, to develop themselves as human beings.

Having workers who are but cogs in the machine is efficient from the capitalist point of view because it increases productivity. But it is not efficient from the point of view of socialism since it cripples human beings; it does not allow them to develop, it transforms them into slaves to the machine.

Historical experience has taught us that, without this education, those who manage the companies that have become social property are not the workers per se but usually the technicians, since it is they who have more knowledge about how to run a productive process.114

The concept of socialist efficiency, then, should include not only respect for nature but also the understanding that investing in the development of the workforce is productive investment. Therefore, education should not be thought of as something separate from the workday. On the contrary, every workday should include, as part of the job, a certain amount of time devoted to worker education.

This means that one cannot use the same standards to measure the efficiency of a steel plant in Venezuela set on socialism—a steel works that has proposed devoting, for instance, two hours of the working day to study—as those used to measure the efficiency of a capitalist steel works in an advanced country where all of the working day is devoted to producing goods. If efficiency is only measured by output, it is possible that the capitalist company will win—although that remains to be seen, because it has also been proven that the more aware the workers are about the meaning of their work activities, the greater is their motivation on the job, and that has a positive effect on productivity. If, instead, we measure efficiency not only by labor productivity but also by the human development of the worker, there is no doubt that a self-managed or co-managed socialist company will come out ahead of a capitalist company.

Planned Economy and Decentralization

Another feature of the new economic model is that economic activity is planned. A planned economy must put an end to the constant anarchy and periodic convulsions, which are the inevitable consequences of capitalist production, and should allow for a more rational use of the natural and human resources available.115 This planning must not repeat the errors of hyper-centralized Soviet planning, which was carried out in a bureaucratic manner. It must be the result of a decentralized, participatory planning process in which the social actors from various spheres of society are involved.116

If this process is implemented from the smallest to the largest territorial units, the plan could discover people’s and the localities’ needs. Then, the companies operating in those areas could discuss to what degree they could satisfy them.117

Protagonism becomes a mere slogan if people do not have the opportunity to offer their opinions and make decisions in areas where they participate (territorial areas, workplaces, educational institutions, and interest groups). If the central state decides everything, there is no room for local initiatives, and the state ends up being a hindrance or, as Marx says, hinders the “free movement” of society.118

It is interesting to note that István Mészáros thinks that the excessive centralization of the Soviet state led to the fact that “both the Soviets and the factory councils had been deprived of all effective power.”119 We should not be surprised, therefore, that Mészáros stresses the need, in the transition stage, to “accomplish a genuine autonomy and decentralization of the powers of decision making, in opposition to their existing concentration and centralization which cannot possibly function without ‘bureaucracy.’”120

Decentralization: Antidote to Bureaucratism

The relationship between decentralization and people’s protagonism is one of the central themes of twenty-first century socialism, and we should always keep it in mind. However, there are other aspects that I should like to discuss here, such as the relationship between centralization and bureaucratism.

It is clear that this was not the way Lenin saw it; he always related the phenomenon of bureaucracy to the state inherited from capitalism. When he was dying, he was worried about the “bureaucratic ulcer” that was affecting the state apparatus.121 In one of his last writings, he maintained that “our state apparatus is to a considerable extent a survival of the past and has undergone hardly any serious change.”122 A few days earlier, he had described it as a “Bourgeois, tsarist mish-mash.”123

In January 1922, in his last work on the role of the unions, he went so far as to say that “in no way could the strike struggle be renounced” provided that it is directed against the bureaucratic deviations of the proletarian state. He explained, however, that this struggle was very different from the one waged under the capitalist regime. In that case, the struggle was to destroy the bourgeois state, but in this case, it was to fortify the proletarian state by combating “the bureaucratic deformations” of that state, its huge weaknesses, and “all kinds of vestiges of the old capitalist regime in its institutions, et cetera.”124

As we can see, Lenin thought that the bureaucratic deformations that characterized the Soviet state were a legacy of past regimes. I think he was wrong and that his view prevented him from prescribing the right medicine for this disease. As I understand it, the underlying cause of bureaucratism is to be found—and far more important than legacies of the past—in the excessive centralization of the Soviet state. We know full well what happens when not only strategic decisions but also most decisions are made centrally: the red tape, the endless running around, the slowness with which decisions are made, the lack of control.

One of the most important lessons learned after the goal set by Fidel Castro for the 1970 sugar harvest in Cuba was not met was understanding that it was impossible for the socialist state to administer everything centrally, especially in an underdeveloped country such as Cuba. Therefore, spaces where the people could control the way the state functioned were needed in order to ensure that the state operated more effectively.125 Castro admitted this in a July 26, 1970, speech.

“The revolutionary process itself has shown,” Castro said two months later, “the problems caused by bureaucratic and also by administrative methods.”126 After pointing out the mistakes that had been made by identifying the party with state administration, and by allowing mass organizations to weaken, he stressed the role that the people should play in making decisions and solving problems. Castro added:

Imagine, a baker’s shop on a street which provides bread to all who live there and an administrative apparatus that controls it from above. How does it control it? How could the people not care how that bakery operates? How could they not care whether an administrator is good or bad? How could they not care if people there had privileges or not, if there was negligence or not, insensitivity or not? How could they not care about how it delivered its services? How could they not care about the hygiene problems there? And how could they not care about the production problems, absenteeism, the quantity and quality of the goods? They couldn’t! Can anyone think up a more effective means for controlling that bakery than the masses themselves? Could there be any other method of inspection? No! The person who runs that micro-unit of production could become corrupt; the person who inspects it could become corrupt, everyone could become corrupt. The only ones who are not going to become corrupt are those affected [by all this], those affected!

These ideas were incorporated into Cuba’s new Constitution in 1976. The new political model proposed decentralizing as many as possible of the state’s functions, down to the municipal level. Although these institutions had to be subordinated to those above them, they could act autonomously within the established legal and regulatory framework and “should not be submitted to constant and restricting supervision by the institutions above them.”

This mechanism, according to Raúl Castro,

in addition to making the higher level bodies work faster and better and be more in tune with the demands made by the where and when of the decisions that have to be taken, frees them, and especially national institutions, of the heavy, voluminous burden of everyday administrative tasks which in practice they cannot properly carry out…and which, moreover, prevent them from attending to the important tasks that they really are competent to undertake in areas related to setting standards, control and inspection of the activities they deal with.127

As time went by, experience showed that it was necessary to decentralize government administration even more, and the body known as the People’s Council was set up in Havana in 1990. This was a government body that functioned in an area smaller than the municipality. Its objective was to improve the control and supervision over all administrative bodies and find ways that made it possible to involve all members of a community in solving their own problems. Author Jesús García says that the idea was to have “a strong government body at the ‘barrio’ level that could organize community forces for solving the problems the people had at that level.”128

Unfortunately, the great economic difficulties that have beset Cuba in the last two decades placed huge limitations on the resources available for attending to people’s aspirations. The People’s Power cadres also began to “burn out” and grow weary, people lost trust, and participation began to diminish and become rote. All this—as well as other reasons I cannot go into here—meant that People’s Power, which had started out with such brio and creativity, began to lose prestige.

Marx: All that Can Be Decentralized Must Be Decentralized

I am more and more convinced by historical experience that decentralization is the best weapon for combating bureaucratism, since it brings government closer to the people and allows them to exercise social control over the state apparatus. I therefore share Marx’s opinion that it is necessary to decentralize all that can be decentralized, keeping as functions of the central state only those tasks that cannot be carried out at the local level. In the Civil War in France Marx said: “The communal regime once established in Paris and the secondary centers, the old centralized government would in the provinces, too, have to give way to the self-government of the producers.”129

The few but important functions that would be left to a central government would not be eliminated, as some have said, deliberately falsifying the truth: “The unity of the nation was not to be broken, but, on the contrary, to be organized by Communal Constitution, and to become a reality by the destruction of state power which claimed to be the embodiment of that unity independent of, and superior to, the nation itself, from which it was but a parasitic excrescence.”130

Of course, we are not talking about an anarchic decentralization. There must be a national strategic plan that coordinates local plans; each of the decentralized spaces should feel that they are part of the national whole and be willing to contribute their own resources to strengthen development of those spaces with the greatest shortages. This kind of decentralization must be imbued with a spirit of solidarity. One of the most important roles the central state plays is just that: implementing this process of redistributing national resources to protect the weak and help them develop.

It should be clear that I am not talking here about the kind of decentralization promoted by neoliberalism. I am in complete agreement with Chávez about that kind of decentralization being a global strategy to weaken national unity and the nation-state. What I am advocating here is a different way of looking at decentralization, a socialist conception of decentralization—the concept enshrined in numerous articles in the Bolivarian Constitution.131 Here, decentralization strengthens the communities, the communes that are the foundation of the nation state. It helps deepen democracy and strengthen the central state, the fundamental instrument for defending our sovereignty and leading the country toward the new society we want to build.132


  1. Karl Marx, Capital, Vol. I (London: Penguin Books, 1990), 638.
  2. “Productivism” is defined as the tendency to think that the solution to everything is to increase production of material goods without being concerned about the effects that certain production processes can have on nature.
  3. On this subject, we recommend Enrique Leff, Ecología y capital: Racionalidad ambiental, democracia participativa y desarrollo sustentable (Mexico and Madrid: Siglo XXI, 1998). He argues: “Environmentalism is a radical critique of the needs imposed by the expansion of capital and over consumption which exhausts resources at an exponential rate. The concept of quality of life redefines human needs and re-postulates the bases of the production process to satisfy these needs in a new social rationality,” 284.
  4. Michael Lebowitz, “New Wings for Socialism,” Monthly Review 11, vol. 58 (April 2007).
  5. Ibid.
  6. On the concepts of ownership and real possession, see Harnecker, Los conceptos elementales del materialismo historico.
  7. Lenin thought that big industry needed the existence of “a strict and absolute unity of will” to direct common work and that the task of the party should be to “guide” the masses “along the path of coordinating the task of arguing at mass meetings about the conditions of work with the task of unquestioningly obeying the will of the Soviet leader, of the dictator, while at work.” He stressed that democracy in public meetings should be combined “with iron discipline during working hours.” See V.I. Lenin, “The Immediate Tasks of the Soviet Government,” Collected Works, Vol. 27 (Moscow: Progress Publishers, 1972), 235-77.
  8. Michael Lebowitz, Building New Productive Relations Now, unpublished document, December 2006.
  9. Michael Lebowitz, The Logic of Capital Versus The Logic of Human Development, 54, communal council libraries, Venezuela.
  10. Partido Socialista de Chile, “Elementos a considerar para la política de participación de los trabajadores en la empresa industrial” (“Things to be taken into consideration for a policy of worker participation in industrial companies”), 1971.
  11. I have taken the main ideas I develop here from Michael Lebowitz, The Socialist Alternative: Real Human Development, Chapter 7.
  12. See Michael Lebowitz’s analysis of the experience of co-management in Yugoslavia in the chapter entitled “Seven Difficult Questions” in his Build it Now.
  13. “[U]nited co-operative societies are to regulate national production upon a common plan, thus taking it under their own control, and putting an end to the constant anarchy and periodical convulsions which are the fatality of capitalist production,” Karl Marx, The Civil War in France, in the Appendix to 1903 edition of Belfort Bax, A History of the Paris Commune (Twentieth Century Press: 1895).
  14. See Pat Devine, Democracy and Economic Planning; The Political Economy of a Self-governing Society (Cambridge: Polity Press, 1988).
  15. Noel López and I have written two documents on this subject: “Planificación participativa en la comunidad,” http://rebelió; and “Planificación participative en la municipalidad,” currently undergoing final revision.
  16. Marx, The Civil War in France.
  17. István Mészáros, Beyond Capital (New York: Monthly Review Press, 1995), 906. On Lenin, Mészáros argues: “The main themes of The State and Revolution receded further and further in his thought. Positive reference to the experience of the Paris Commune (as the direct involvement of ‘all the poor, exploited sections of the population’ in the exercise of power) disappeared from his speeches and writings and the accent was laid on ‘the need for a central authority.’” Further on, he says: “The ideal of autonomous working-class action had been replaced by the advocacy of ‘the greatest possible centralization,’” (903-06).
  18. Ibid.
  19. V.I. Lenin, “10th Congress of the RCP(B),” Collected Works, Vol. 32 (Moscow: Progress Publishers, 1965), 165-271.
  20. V.I. Lenin, “How Should We Reorganize the Workers’ and Peasants’ Inspection,” Collected Works, Vol. 33 (Moscow: Progress Publishers, 1965), 481-86.
  21. V.I. Lenin, “The Question of Nationalities Or ‘Autonomisation,’” Collected Works, Vol. 36, (Moscow: Progress Publishers, 1966).
  22. V.I. Lenin, “On the Role and Functions of the Trade Unions in the New Economic Policy,” Collected Works, Vol. 33, 188-96.
  23. Most of what follows has been taken from the introduction to Marta Harnecker, Cuba ¿Dictadura o Democracia? (Mexico: Siglo XXI, 1979).
  24. Fidel Castro, September 28, 1970, speech given for the 10th anniversary of the Committees for the Defense of the Revolution.
  25. Raul Castro, at a seminar for the delegates of the Matanzas Popular Power Assembly, August 22, 1974.
  26. Jesús García, Cinco tesis sobre los consejos populares (La Habana: Revista Cubana de Ciencias Sociales, 2000).
  27. Karl Marx, The Civil War in France.
  28. Ibid.
  29. Articles 16, 157, 1581, 85, and 269, Constitution of the Bolivarian Republic of Venezuela,
  30. Marta Harnecker, ed., La descentralización ¿fortalece o debilita el estado nacional? (Does Decentralization Strengthen or Weaken the National State?), This work includes papers presented by those taking part in a workshop organized by the Centro Internacional Miranda, September 23-24, 2008.
2010, Volume 62, Issue 03 (July-August)
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