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Erik Olin Wright and the Anti-Capitalist Economy

Tubac, Arizona

The devastating effects of neoliberal economic schemes have laid the foundation for rebellion against this very system. Neoliberalism, understood as unrestricted free market economics can be traced to the sixteenth-century European colonization of the “new world” and its later manifestation in imperialism and neo-imperialism. This strategy has also fueled the industrial revolution until it met its fate with the Great Depression. The New Deal policies of the Roosevelt administration in the 1930s provided a temporary reprieve, but ultimately failed to secure a permanent solution to market failure. The proof of this vulnerability is made clear in the Great Recession some seventy years later with the market collapse in 2008.

In spite of these historical calamities, the rich have amazingly benefitted from their own economic disaster while the middle class and poor have been forced to financially both suffer from economic devastation and, adding insult to injury, bare the cost of repairing the disaster the rich have visited upon them. The rich, power elite, or one percent, whatever the spin, are clearly waging economic war on the people, and this has been dragging itself out since the inception of the United States. Today the result for most citizens is the lived reality of being “liquid asset poor,” or put in other terms, “one paycheck away from disaster.” Moreover, the devastation of the administrative state over the past forty years, starting with the Reagan era, has been a major factor in destroying the social safety net and in so doing unleash the “animal spirits” of the free market.

It is obvious. The neoliberal economic model is destroying life for Americans and some form of resistance to capitalism is needed more than ever. To this Erik Olin Wright develops an anti-capitalist strategy using metaphors such as: smashing capitalism, taming capitalism, escaping capitalism, and eroding capitalism. In this Wright constructs a new conceptual model based on two of the metaphors, “taming and eroding” capitalism.[1]

Smashing Capitalism

The evidence that neoliberal and monopoly capitalism has historically devastated the lives of people, “smashing capitalism” is understandable. The reason for smashing capitalism is because it is a corrupt institution; reform is impossible since it is controlled by the interests of powerful elites. At times small reforms are possible through public policy, yet such reforms are contingent and subject to legislative change. Wright argues that policy in this regard is held captive by its elite clientele and international elites. This makes public policy unresponsive to the needs of the general public. In lieu of this, “smashing capitalism” through class struggle seems to be the only alternative. The idea that capitalism can be rendered a benign social order to which ordinary people benefit is a delusion. Instead the rational alternative is to end the life of capitalism and then reconstruct a state socialist alternative.

Aside from the strengths and weaknesses of revolutionary action, there are too many “moving parts,” too much complexity, and too many unintended consequences in which revolutionary action, directed at terminating capitalism, is not feasible. Attempts at “system rupture” as Wright describes it, will tend to unravel into such chaos that revolutionary elites, regardless of their motives, will be compelled to resort to pervasive violence and repression to sustain social order. Such violence, in turn, destroys the possibility for a genuinely democratic, participatory process of building a new society. The evidence from the revolutionary tragedies of the twentieth century seem to indicate that smashing capitalism, according to Wright, fails as a strategy for social emancipation.

Taming Capitalism

An alternative to smashing capitalism is taming capitalism. Critics of capitalism argue that capitalism is self-destructive. It generates levels of inequality that undermine social cohesion. Capitalism destroys traditional jobs and leaves people to fend for themselves. It creates uncertainty and risk for individuals and communities. These are consequences of the inherent dynamics of a capitalist economy. Nevertheless, Wright argues that it is possible to build counteracting institutions neutralizing the negative externalities of capitalism. Well-crafted policies are more than possible at taming capitalism. Given favorable political circumstances, it is possible to win policy battles and impose the constraints needed for a more benign form of capitalism. The idea of taming capitalism does not eliminate the underlying tendency for capitalism to generate harms; it simply counteracts their effects.

This is similar to a medicine which effectively deals with symptoms rather than underlying causes. Known as the “Golden Age of Capitalism” – roughly the three decades following World War II – social-democratic policies, specifically in those locations where they were most thoroughly implemented, did a fairly good job at moving in the direction of a more humane economic system. Three clusters of state policies, in particular, that significantly counteracted the harm of capitalism are: health, employment, and income. So too, the state provided an expansive set of public goods (funded by a robust tax system) that included basic and higher education, vocational skill formation, public transportation, cultural activities, recreational facilities, research and development, and macro-economic stability. In large part the corporate media is to blame. Educational institutions as well. Still, for Wright taming capitalism remains a viable expression of anti-capitalism.

Escaping Capitalism

One of the oldest responses to the onslaught of capitalism has been to escape. For Wright, escaping capitalism may not have crystallized into systematic anti-capitalist ideologies, but nevertheless it has a coherent logic: capitalism is too powerful a system to destroy. Truly taming capitalism would require a level of sustained collective action that is unrealistic, and albeit, the system as a whole is too large and complex to control. The power elite control the United States and they will always coopt opposition and defend their privileges. The impulse to escape is reflected in many familiar responses to the harms of capitalism. For example, the movement of farmers to the Western frontier in nineteenth-century United States was, for many, an aspiration for stable, self-sufficient subsistence farming rather than production for the market.

Escaping capitalism is implicit in the “hippie” motto of the 1960s, “turn on, tune in, drop out.” The “Go It Alone” demeanor and the “community economy” may be motivated by stagnant individual incomes during a period of economic austerity, but they can also point to ways of organizing economic activity that are less dependent on market exchange. More generally, the lifestyle of voluntary simplicity can contribute to broader rejection of consumerism and the preoccupation with economic growth in capitalism. Fleeing from the complexities and even injustices associated with capitalism will, in the long run, fail to address the deeper structural issues that could in fact return to promote worse outcomes from prior experiences. Escaping capitalism fails to address the underlying causes of capitalism’s inadequacies and the outcomes that effect other’s lives whatever their perspectives on capitalism.

Eroding Capitalism

The fourth form of anti-capitalism is the least familiar, eroding capitalism. This orientation for Wright, identifies capitalism as a socioeconomic system organized around three basic components: private ownership of capital; production for the market for the purpose of making profits; and employment of workers who do not own the means of production. Capitalists claim that markets are the most efficient and effective means for the distribution of scarce resources. The same capitalists, on the other hand, must confront problems with the distribution and equity of these resources. As a result, public policy has attempted to address these issues through what Wright describes as the “eroding capitalism” theme: policy implementations to remediate market failures. This includes nonprofits and nongovernmental organizations.

A number of these organizations can be thought of as hybrids, composed of capitalist and non-capitalist entities; some are non-capitalist while some are anti-capitalist. Thus, the eroding force on capitalism is to construct more inclusive, democratic, egalitarian, economic models wherever possible, and to struggle to expand and defend these efforts to the point where capitalism is no longer dominant. The eroding process evolves over time. As a strategic vision, eroding capitalism is both enticing and far-fetched in that social justice and emancipatory social change, attempt to build on a new world on economic and environmental justice, within the current capitalist structure, albeit flawed. Simply put, an economy dominated by capitalism could never be eliminated since the existence of large capitalist corporations are responsible, to a large degree, for livelihoods.

Eroding capitalism is not a fantasy for Wright. It is only plausible if it is combined with the social-democratic idea of taming capitalism, linking the bottom-up, society-centered strategic vision of anarchism with the top-down, state-centered strategic logic of social democracy. The goal is to tame capitalism in ways that make it more erodible so that eroding and taming capitalism, without its total elimination, is a position that makes sense in the context of understanding this position as a “pipedream” or “utopia.”

Taming and Eroding

So, how should one as an anti-capitalist seek to implement a democratic economy?

First, abandon the fantasy of smashing capitalism. Capitalism is not able to be smashed, at least if the goal is to construct an emancipatory future aimed at social justice. It is a massive international institution whose destruction, presumably by some revolutionary force, would devastate the world financial system. Second, by escaping capitalism and moving off the grid and minimizing involvement with the market, is neither a realistic nor an appealing option for most people, especially those with families, financial responsibilities, etc. As a tactic for social change, it has little potential to foster a broader process of social emancipation.

In summary, if persons are concerned about living in a civilized world, in one way or another, social justice demands that capitalism, as it manifests itself today on a global scale, must address its inner demons, structures and institutions. Anti-capitalism thus directs its attention to taming and eroding capitalism. The real utopian emancipatory efforts can be directed at democratic economic models that serve the needs of labor as a priority, profits follow subsequently. This arguably is the best approach to remediating the precarious nature of the market and which also presumes that individuals and communities need to participate both in political movements for taming capitalism through public policies and in socioeconomic projects for eroding capitalism through the expansion of ongoing emancipatory forms of economic activity. This implies that people must renew an energetic progressive social democracy that not only neutralizes the harms of capitalism but also facilitates initiatives to build real utopias with the potential to erode the dominance of capitalism.

An anti-capitalist emancipatory project must have specific human rights guarantees in order for this emancipatory project to be successful. As Bernie Sanders argues, authentic freedom must embrace “economic security.” Arguably, this can best be achieved with the reintroduction of FDR’s Economic Bill of Rights. Hence the assurance of a democratic economy and an anti-capitalist strategy based on taming and eroding the inherent contradictions and nihilistic direction of capitalist designs.

Erik Olin Wright, How to Be an Anti-capitalist for the 21st Century, Verso Books, 2019.

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