What was socialization? A look back

In today’s economic and political crisis, many advocate the socialization of public goods like housing and infrastructure. A century ago, a similar discussion arose in Germany after the war, in the midst of the German Revolution of 1918-1919. It might be helpful to revisit some of these debates, not least in order to clarify the meaning of the term.
            “What is Socialization?” is one of seven articles that the socialist jurist Karl Korsch wrote on this topic between 1919 and 1920. Korsch studied law in Jena, was a member of the Independent Social Democratic Party, worked with the socialization commission in Berlin, and wrote many influential works on labor law, worker’s councils, and Marxist philosophy. This particular text from 1919 provides a clear program for socialization of the economy via both top-down and bottom-up transformations in ownership and control, in order to protect the envisioned socialist economic order from anti-democratic control from above or parochial interests from below. It is a follow up to his own 1912 text, The Socialist Formula for the Organization of the Economy, in which he criticized the German socialists of the time for lacking any clear economic program, writing:

If one asks a socialist what he understands by “socialism,” one will receive as an answer, in the best case, a description of “capitalism” and the remark that “socialism” will eliminate this capitalism by the socialization of the means of production.

Socialism means anti-capitalism. The term “socialization of the means of production” has a clear negative sense; on the positive side it is empty and meaningless.

This emptiness of the socialist formula for the organization of the economy was and is harmless as long as the practical effectiveness of socialism is limited to combating and eliminating existing grievances. It becomes harmful as soon as the moment has come when socialism somehow takes over the government somewhere and is now called upon to carry out the socialist organization of the economy.

Unfortunately, Korsch’s critique of the emptiness of socialization as a formula was not taken up. Even he did not attempt to answer the question for another seven years. “What is Socialization?” is his first attempt to theorize an adequate response. He begins by stating:

The socialization [Sozialisierung] demanded by socialism signifies a new regulation of production with the goal of replacing the private capitalist economy by a socialist communal economy. Its first phase consists of the socialization [Vergesellschaftung] of the means of production and the resulting emancipation of labor. Its second phase consists of the socialization of labor (Korsch, 1919, p. 60).

Korsch is clear: socialization is not a question of “half-measures” like profit-sharing, labor reforms, or mixed economic policies. Rather, the aim is to introduce a socialist communal economy (Gemeinwirtschaft) by transforming the control, ownership, and regulation of production, which in turns enables the reorganization of labor. According to Korsch, there are two main strategies of socialization, depending on whether or not expropriation of the private owners is carried out:

One could socialize by taking the means of production away from the jurisdiction of individual capitalists (expropriation) and by placing them under the jurisdiction of public functionaries (nationalization, communalization, and other forms). And one could socialize by internally transforming the content of private property of the means of production without expropriating its owners (p. 66).

Korsch defends the first option, arguing that socialization without expropriation is no socialization at all. “There can be no socialization of the means of production without either all at once or gradually eliminating completely the private property owner from the social process of production!” (p. 66). Criticizing the likes of Eduard Bernstein, Karl Kautsky, and others who want to maintain some form of private ownership for certain industries, Korsch believes that leaving any form of private ownership in the means of production intact blocks the possibility of regulating the economy as a whole, which is the first condition of a socialist communal economy.
            It should be said, however, that Korsch’s idea of socialization as requiring a radical break was not the norm, but the minority view of the time. For many socialists, the conditions of socialization were already present in the productive forces themselves due to the highly concentrated nature of many industries during and after the war, along with their accomplished level of technical efficiency. For Eduard Bernstein and Rudolf Hilferding, for instance, socialization meant radicalizing the socializing tendencies at work in the present economic state of affairs, not breaking with them. Korsch, on the other hand, similar to Rosa Luxemburg and Richard Müller, argued for a radical rupture with the political and economic order. For him, there was no way around confronting the owners of capital and their political defenders. Anything else would leave them intact with economic power to stymie further socialization.
             Korsch’s key novelty lies in his idea that socialization cannot simply be a way of transferring ownership to the public, nor to the workers, but rather has to develop mediated levels of autonomy between the state and the producers so as to reinsure that capitalism does not reemerge with only a change of owners. He warns against prioritizing the interests of either consumers or producers when determining how to regulate the social relations of production; such “alleged” socializations would only replace private capitalism with a “new capitalism” (p. 68). That is to say, for Korsch, socialization cannot mean simply nationalization (which he calls State or Consumer Capitalism), nor syndicalization (which he calls Producer Capitalism), but rather industrial autonomy, which entails workers’ control of the factory, whose ownership is communal, with nested layers of regulated autonomy between workers, plants, syndicates, and the state.
            How does one get to this end goal? Korsch argues that there are three pathways to socialization in the present: legislative, cooperative, and class struggle. The first path relies on political action to compel parliament and local authorities to socialize individual branches of production; the second one is based on freely creating consumer and worker coops that can outcompete other forms of production; and the third way consists of working class struggle for more rights of co-determination and recognition of worker’s associations and their representatives at each workplace. For Korsch, it is only the third strategy of worker’s action that has the potential, in revolutionary moments, to “remove the capitalist enterpriser from control over the production process and to place him under the control of the totality of plant participants” (p. 81). This is exemplified for Korsch most notably in the program of the Spartacus League, written by Rosa Luxemburg. Furthermore, such action also has a psychological advantage over the others forms of socialization, insofar as working class struggle for self-determination in the workplace itself strongly develops “those psychic impulses in the proletariat, without which such an economy can ultimately not exist” (p. 81). In other words, socializing through worker’s action also creates the subjective conditions for socialization to be successful, not only the objective ones. The problem with this action is, first, that it depends on times of “revolutionary fervor”, and, second, its actions must also be retroactively legitimated by whatever “highest power” comes into command after the revolution (p. 81). When there is no longer any possibility for these three forms of socialization, then all that remains are educational efforts for keeping the idea alive for the future. Creating a culture of socialization is thus the task of those individuals with “passionate longing and revolutionary exuberance” who will never be satisfied “by the always slow, often faltering and regressing development of the social relations of production” (p.81).
            In the socialization articles written after this text, Korsch develops his ideas further, focusing on two main claims. First, socialization is the practical unity of theory of praxis, and second, socialization cannot come only from above (lacking democracy) or only from below (lacking planning), but rather needs coordination through intermediate bodies, which are councils. In “The Socialization Question Before and After the Revolution” (1919), the role of worker’s control and participation in the process of socialization becomes paramount:

Today, when “socialization” is called for, it is no longer merely a demand that the means of production be transferred to the ownership of the whole or that “control from above” be exercised. Rather, alongside this control from above, in whatever form it is carried out, there must be an equally effective “control from below,” in which the mass of workers (manual and mental laborers) themselves participate decisively in the management of enterprises, or at least in the control of this management (Schriften Zur Sozialisierung, p. 53).

Socialization has thus two demands: economic planning from above, and workplace democracy from below. On the one hand, private production according to the whims of entrepreneurs should gradually be replaced by “planned management of production and distribution by society”, and on the other hand, the “autocracy” of the employer class should be eliminated right now (p. 53). Whereas economic planning can only be done after a revolutionary break, workplace democracy can be accomplished now. But how can they be combined in an adequate way? Korsch’s answer to this question of coordination between plan and democracy is the council system. How exactly the council system should do this is not explicitly spelled out by Korsch at this point. Yet since then, many thinkers have tried to tackle this problem: from Richard Müller’s pure council system to Otto Neurath’s full socialization plans, from proponents of algorithmic socialism to advocates of iterative democracy.
            In our current moment, when calls for socialization have become reality again, reviewing this debate could not be more urgent. Korsch presents just one example of the diversity of socialization plans for economic transition towards a communal economy of needs. Many socialization calls today, however, are not focused on the economy as a whole, or even on particular industries, but rather on basic, public goods for consumers, like transportation, housing, health care, and energy. This is a key difference to socialization concepts of the past, which focused more on the benefits of socialization for workers in particular and the economy in general. This means that today’s demand for socialization necessarily requires different normative justifications and different strategies for implementation, given the different kind of object to be socialized. Nevertheless, there is still much to learn from the conceptual clarity, economic plurality, and comprehensive visions of the first socialization debate, one which not only included specific plans for economic reform like Korsch’s, but more importantly exuded a confidence that fundamentally transforming property relations in society at large was possible, realistic, obvious even.

Bibliography:

Kellner, Douglas (ed.), Karl Korsch: Revolutionary Theory (Austin: University of Texas Press, 1977)
Korsch, Karl, “Die sozialistische Formel für die Organisation der Volkswirtschaft”. Die Tat, IV/9, (1912)
Korsch, Karl, “What is Socialization” (1919), New German Critique, No. 6 (Autumn, 1975)
Korsch, Karl,  Gesamtausgabe, Band 2, ed. Michael Buckmiller (Hannover: Offizin, 1980)
Korsch, Karl, Schriften zur Sozialisierung (Frankfurt am Main: Europäische Verlagsanstalt, 1969)