Among some “democratic socialists”—whose program is not really aimed at bringing about socialism, but represents an illusory attempt to make capitalism “more democratic” and less unequal—there is the notion of “workers’ democratic control” of the economy, and in particular the places where they work. (A similar notion is also put forward by some anarchists and other “leftists.”) As the title of this article indicates, this is impossible under capitalism and actually works against a real socialist transformation of society—and ultimately the world as a whole—toward the goal of abolishing all relations of exploitation and oppression, with the achievement of communism throughout the world.

“Workers’ democratic control” is impossible under capitalism: because capitalism is a system in which units of the economy—enterprises, corporations, etc.—are privately owned by capitalists and operate according to the capitalist principle of maximization of profit that is accumulated by those capitalists through exploitation of the workers they employ. These capitalists are involved in, and are driven by, fierce competition with each other, not just in a particular country but on a global scale. This compels them to seek the most profitable conditions of production, including by seeking out situations, particularly in the poorer countries of the Third World (Latin America, Africa, the Middle East and Asia), where they can most ruthlessly exploit people.

And “workers’ democratic control” would be destructive of real socialism: because, in a genuinely socialist society, uprooting the remaining elements (or remnants) of exploitation, inequality and oppression that are “left over” from capitalism can only be achieved with the revolutionary transformation of the society overall, on the foundation of an economy in which the means of production (land, factories and other production facilities, machinery and other technology) are publicly, not privately, owned—and the goal is to make these means of production the common property of society as a whole—as opposed to ownership by different groups of people working in different parts of society. On the basis of this public ownership, in accordance with an overall society-wide plan, the wealth produced, and the allocation and distribution of this wealth, is also socialized—embodied in and carried out by a government which actually represents the interests of the masses of people and institutionalizes the means and vehicles for their active and increasingly conscious involvement in transforming society. (And, as I will speak to further in the course of this article, in a genuine socialist economy centralization, at the overall societal level, is—and must be—primary, while decentralization at lower and local levels is secondary and subordinate to centralization.)

Further, because of the uneven development of things—and specifically because the ripening of revolutionary possibility does not happen at the same time throughout the world—revolutions to establish socialism will of necessity be carried out in different countries at different times. And, while it is possible to develop socialism in a particular country for a time, it is not possible to indefinitely continue socialist development and transformation in any particular country, by itself and unto itself.

In all this, it is crucial to understand that socialism is, at one and the same time, a system of economic, social, and political relations, and most fundamentally a transition—from the old, exploitative and oppressive system, to the system of communism, with the abolition of all exploitation and oppression—which can only be fully and finally achieved on a world scale, and not within any particular country by itself.

This understanding is a critical grounding for, and must inform, any discussion and evaluation of orientation, approach, policy and action in socialist society.

Fundamental Principles of Socialist Development

As the Constitution for the New Socialist Republic in North America, which I have authored, makes clear: The socialist economic system, in which the means of production are publicly owned, represents the highest interests of the formerly exploited and oppressed people, and the masses of people as a whole, and “enables society to consciously and collectively utilize and develop social productive forces in order to transform society and the world and to enable humanity to truly become caretakers of the planet.”¹

This system makes it possible to carry out overall development without the chaotic, destructive and “lopsided” dynamics and consequences that are built into capitalism. As one key part of this, it is possible to support parts of the socialist economy which are strategically important for overall socialist development and transformation but which may not be generating much, or even any, positive revenue at a given time. It makes possible (and the planning must allow for) the necessary flexibility in the development of the economy. Among other things, this provides the basis for shifting resources and funds quickly to deal with unexpected developments, including emergencies due to natural disasters (such as floods, hurricanes, and wildfires) and so on.

But this public ownership, while essential, will not by itself guarantee that economic development will actually be along socialist (and not capitalist) lines. An economy that is developed on a genuinely socialist basis must and can “enable the masses of people to gain increasing collective mastery over economic processes.” This is why the Constitution for the New Socialist Republic in North America also emphasizes this:

In order to develop the economy along socialist lines it is necessary to put revolutionary politics in command of economic matters. To meet goals and solve problems of production, the state must mobilize the conscious activism of people in accordance with the principles and objectives set forth here and elsewhere in this Constitution.²

But this is also of decisive importance: This conscious activism must be oriented and grounded, first and above all, not in terms of the particular interests of individuals, or of individual units or sectors of the economy, but in accordance with the larger interests and objectives of transforming all of society, and ultimately all of the world, to put an end to all relations of exploitation and oppression—which will make possible whole new dimensions of freedom for the masses of people and ultimately all of humanity, both collectively and individually.

In such a socialist society, there is provision for a great deal of local initiative, including by those working in different units and sectors of the economy. But, once again, this is—it needs to be—initiative on the foundation and in the framework of the socialized ownership of the means of production and socialized appropriation of what is produced, and centralized planning with regard to the allocation and distribution of the social wealth: not simply provision for individual income (in the form of payment for work) but, above all for the essential objectives and processes of socialist society, which involves allocation of resources and funds to different parts of the society and different segments of the economy, to spheres such as education, science, art and culture, defense and security, to health care and other social services, to overcoming remaining inequalities—and to support for revolutionary struggles throughout the world, guided by the fundamental goal of achieving communism. And this socialization, in which centralization is primary, makes it possible to do all this on a basis and in a way that enables and promotes sustainable development and addresses the acute environmental crisis confronting humanity.

In opposition to this orientation and approach, “democratic control” of the units of the economy, exercised by the people who work there, would actually work against the transformation of society to uproot remaining elements of inequality, oppression, and exploitation that are “left over” from capitalism. Besides any continuing aspects of oppressive relations based on nationality (or “race”) and gender oppression, which may still persist at any given point, those remaining elements (“leftovers from capitalism”) also include the contradictions between different kinds of work, and in particular the contradiction between intellectual and physical (mental and manual) labor; differences between different sectors of the economy (in terms of how “profitable” they are, at any given time); differences between different regions of the country (how developed they are economically, etc.). Of critical importance in all this is the fact that, because of these remaining differences (and other factors), exchanges between enterprises, sectors of the economy, and so on, will for some time have to involve calculations of money value—they will have to take into account the reality that this involves aspects of commodity exchange, and the law of value, even as this must be increasingly restricted as the economy and the society overall advance on the road of socialism (see footnote 3 below).³

If each unit of the economy is in effect “autonomous”—if the most essential decisions about how such units operate, and how they carry out exchanges with other units, is left primarily and ultimately to those working in these units—then all these contradictions will be intensified. If things are not carried out in accordance with an overall society-wide plan, which sets the basic terms for how the economy as a whole, and different units and sectors of the economy, will operate—including exchanges between different units and sectors—then particular units and sectors will be compelled to “operate on their own” and to pursue their own particular interests. In this situation, what might be beneficial to a particular unit or sector of the economy could well be harmful to other parts of the economy, and to the development of the economy and society overall—on a socialist basis. (For example, a factory that gets its machinery from another factory would be driven to seek a low price for that machinery; and, in turn, it would seek to get the best price possible for the products it sells to another part of the economy. Otherwise, in this situation, that particular factory would be in danger of “going under”—being “squeezed out from both sides”—prices too high for the materials it needs and too low for its products.) Given the kinds of remaining material differences in society spoken to here, as well as the continuing influences of capitalist ideology, including the notion of “looking out for self” above the larger social good, in a situation where units of the economy are “autonomous” the same basic problems could result from raising the wages of the workers in a particular unit or sector of the economy, on the initiative of the workers there, rather than having these wages be determined through an overall society-wide plan and centralized decision-making. For the same basic reasons, inequalities among those working within particular units of the economy—for example, the differences between those involved in management and those carrying out the actual productive labor, and other differences in the type of work—would also tend to be heightened in this situation where units of the economy were in effect “on their own,” in the absence of, or in opposition to, an overall society-wide socialist plan.

To sum this up, in basic terms: In this situation of “workers’ democratic control” the units and sectors of the economy would have to operate on what is essentially a capitalist basis. Differences embodying inequalities—in the economy and in the society as a whole—would increase, rather than being restricted and eventually overcome. This would undermine the foundation of socialism and propel things in the direction of restoring capitalism in the society overall.

Beyond that, as also emphasized in the Constitution for the New Socialist Republic in North America, the orientation of socialist society must be internationalist—and, as an expression of this:

While giving due emphasis to meeting the material, intellectual and cultural needs of the people within this [socialist] state, on a continually expanding basis, and to promoting the further transformation of this society to continue uprooting social inequalities and remaining aspects of exploitation and oppression, the socialist state must give fundamental priority to the advance of the revolutionary struggle, and the final goal of communism, throughout the world, and must adopt and carry out policies and actions which are in accordance with and give concrete effect to this internationalist orientation.⁴

For the same basic reasons that have been discussed here, this internationalist orientation, too, would be seriously undermined if the attempt were made to implement the “democratic control” of units of the economy by those who work there.

Concrete Illustration of These Basic Truths

The fundamental orientation, approaches and policies of a genuine socialist economy—operating on the basis of the principles spoken to here, including the correct handling of the contradiction between centralization and decentralization—are set forth in the Constitution for the New Socialist Republic in North America, in Article I Section 2A, and are elaborated more fully in Article IV.

To provide further illustration, with living examples, of what has been outlined and emphasized up to this point, it is worthwhile turning to an important article which speaks to the pathbreaking experience in China during the Cultural Revolution there (from the mid-1960s until 1976) when China was a socialist country, with the leadership of Mao Zedong. (Shortly after Mao died, in 1976, socialism was overthrown and capitalism restored through a counter-revolutionary coup, led by Deng Xiaoping, a long-time high-ranking official in the Chinese Communist Party who was, however—as Mao sharply put it—“a person in authority taking the capitalist road.”) This article refutes attacks on the revolutionary experience of socialist China by Alain Badiou, a bourgeois-democratic critic of the Cultural Revolution in China. This focuses on a major city in China, Shanghai, a stronghold of revolution during the Cultural Revolution, and its relation to the surrounding rural areas and the country as a whole.

Here is a very relevant part of this article, which begins with the critical observation that “particular and higher interests are in objective contradiction, and the socialist state has to lead in correctly identifying and handling this contradiction.” (emphasis added here) Then follows this important discussion:

Let's take an example from socialist economics, specifically China's socialist economy in the period 1973‑76.

As a consequence of the Cultural Revolution, China's socialist economy put revolutionary politics in command of economic development. Conscious efforts were made to overcome the gaps between mental and manual labor, between town and country (and more advanced and less advanced regions), and between worker and peasant. This required society‑wide coordination and a planned economy guided by political‑ideological priorities and operating with capacities to make decisions and allocate resources.

Thus, by the early 1970s, one‑third of the medical staff of China's large cities, like Shanghai, was, at any given time, on the road providing mobile medical services, mainly in the country‑side. Shanghai had also posted over half a million skilled workers to the interior and poorer regions of the country—sharing expertise and learning from other segments and sectors of society. Further, during the years of the Cultural Revolution, Shanghai retained only 10 percent of its locally generated revenue, the rest going to the national budget, helping to subsidize the spending requirements of the poorer regions, like Xinjiang and Tibet.

But what if these centrally set policies and priorities were subject, in the name of a self‑determining egalitarian politics, to local decision‑making, to local consensus or veto by a Shanghai Commune? Should the workers of Shanghai “have the final say”—should they fight to maintain and in effect increase their “particular” (privileged) position relative to the masses in China's countryside—or should they see their role as an advanced force helping to transform the whole country and gradually narrow the difference between town and countryside?

In a society still marked by significant, and in many ways profound, class and social divisions and the corresponding ideological influences—which is the reality of socialist society, as it emerges out of the old society and for a long period into the socialist transition—the correct handling of the kinds of contradictions and necessary decision‑making spoken to here will not, and cannot, result from reliance on the spontaneity of the masses (who, once again, are divided into different classes and into the advanced, intermediate, and backward at any given time). This has everything to do with the continuing need for and role of a vanguard party and what line is in the leading position, influencing decision‑making and debate among the masses. (In this regard, it is worth noting that after the counter‑revolutionary coup of 1976, the “reform” policies enacted by Deng Xiaoping included a reversal of budgetary policy. Shanghai and other coastal areas were allowed and encouraged to retain the greater portion of their locally generated revenues so that they could be built up as “showcases” of capitalist development. This was propounded as a corrective to top‑down and bureaucratic intrusion by central planners!)

These are examples of some of the crucial questions that, by their very nature, cannot be solved on a narrow local basis. Spontaneity left to itself, including in the form of democratic decision‑making, will lead to the re‑emergence of inequality and the increasing influence of commodity relations—and ultimately will lead back to capitalism.

The same principles apply to the international responsibility of the socialist society and economy to bend every effort to promote the world revolution. This is another reason why far‑sighted vanguard leadership is required. For example, revolutionary China was sending food and other forms of material aid to revolutionary struggles in various parts of the world. The socialist state must, above all, be a base area for the world revolution. This has to be built into the very fiber of socialist society—into its economic structures, into the planning system and its priorities, into the ability of the socialist state to send people to different parts of the world to carry out various internationalist tasks and responsibilities. All of this requires society‑wide coordination and allocative mechanisms. This has to be the outlook promoted in society. And it has to be a central front of ideological struggle.

To be clear, Mao's policies generally did put much greater emphasis on local initiative than had been the case in the Soviet Union when it was socialist, and important responsibilities were transferred to the regions, localities, and rural communes. With this came initiatives to simplify central administrative, ministerial, and planning structures, including streamlining of personnel. However, this “devolution” of responsibilities was only possible on the basis of the centralized leadership of a revolutionary line.

Alain Badiou, on the other hand, reaches this conclusion: "Eventually, for want of support for the most radical experiments in the decentralization of the state (the 'Shanghai Commune' of early 1967), the old order had to be re‑established in the worst conditions."

As we have shown, in many different dimensions, this assertion of Badiou's is in fact in direct opposition to—and is powerfully refuted by—the actual experience of the Cultural Revolution in Shanghai and in China as a whole, and the lessons that must actually be drawn from the—scientific, materialist—summation of that experience.⁵

This revolutionary experience in China has been deeply learned from—while incorporating the lessons from this into the overall further development of communism with the new communism—in terms of the principles for developing the economy, and the overall approach to the socialist transformation of society, aiming for the final goal of a communist world.