Who believes, with Benedetto Croce, that history is the history of freedom, can say that there are three great milestones in modern history: the abolition of slavery, universal suffrage and democracy in enterprises.

Indeed, the introduction of labour-managed firms, that is to say of democracy in enterprises, takes power away from the capital, thus fostering economic freedom, if one believes, with Marx, in the theory of exploitation, according to which capital controls and exploits labour.

Undoubtedly, apart from these three events, we can identify others that have greatly improved the quality of human life, but the three events just mentioned are directly connected to freedom.

To identify the dates of these events, we do not always need to know the dates of beginning and ending, but rather the most important moment. Therefore, we can say that the abolition of slavery happened in the United States on January 1865. As for the universal suffrage, there was a limited right of vote for women during the so-called Age of Swedish Freedom, between 1718 and 1772. Usually, though, we consider 1893 as its starting date, when women’s suffrage was introduced in New Zealand. We do not know when the first cooperative in the world was created, but an important date is 1844, when the Rochdale cooperative was created in Scotland.

Among the three milestones in the history of freedom, I wish to stress the importance of the third one, arguing that it is the realisation of socialism.

But is it true that socialism is a fuller democracy? Some openly deny that, claiming that socialism is not “a simple radicalisation of democracy, but rather something new and different” (Lichtheim, 1969: p. 7) . We believe in the opposite.

Hobsbawm (1978: p. 258) wrote: “Since Marx and Engels refused to draft a vision of the future communist society, we need to refrain from building one on the basis of their incomplete or generic statements, that could cause misleading blunders”. Engels wrote, though: “Democracy is, as all forms of government are, I believe, a contradiction in terms, an untruth, nothing but hypocrisy” (Engels, 1843: p. 393) . Some, like Fehér, think this was Marx’s opinion as well who wrote: “Marx never understood, nor showed any liking for liberalism and its message” (Fehér, 1987: p. 304) . But, while it is true that Marx and Engels never formulated a vision of the future society, they, however, expressed a definite opinion on the subject, claiming that socialism or communism are not the realisation of a full liberalism.

However, since we cannot count on Marx and Engels to try and understand what socialism is, today, after the failure of “communism” in the USSR and in East European countries, history can help us understand what socialism is¹.

We know Samuelson’s (1957: p. 894) statement: “In a perfectly competitive model, who hires who is irrelevant. Labour can certainly hire the capital”. For those who reckon that socialism comes from the overturning of roles between capital and labour, this means that, when there is perfect competition, capitalism and socialism are the same thing. Economy in actual terms, though, is far from being perfectly competitive, and power has a pivotal role.

What is socialism then?

Despite Marx and Engels’s dislike for political democracy, every good Marxist must agree with Rosa Luxemburg when she says that setting aside democracy, as Lenin and Trotskij did when they dismissed the constituent assembly after the October revolution, “is even worse than the disease we want to heal: it blocks the very spring of the corrections to any inborn failure of social institutions” (Luxemburg, 1917: p. 585) . This is the underlying idea of social-democracy, which has its origin in the wish to combine socialism and democracy; an idea which dates back to the first half of the 1800s, and coincides with the publication of the second edition of Principles of Political Economy by John Stuart Mill (cfr. Anderson, 1988 ; Bobbio, 1994: pp. 50-59 ; Urbinati, 1994: p. 212 and Mura, 1994: p. 17 ; on the convergence between liberalism and socialism cfr. also, for ex., Gobetti, 1923: p. 439 ; Rosselli, 1930 ; Revelli, 1994 and all the contributions by Bovero, Mura, and Sbarbero, 1994 )². “The combination of democracy and socialism—as Bobbio (1977: p. 16) wrote—is, for the history of the socialist doctrine, the theme of themes”. Others remark that liberal socialism was born and developed as an alternative to Marxism (cf., for ex., Polito, 1994: p. 186 ) or that the combination of liberalism and socialism entails “shifting the socialist project from revolutionary ideology to democratic gradualism” (Suppa, 1994: p. 192) .

“Democracy, in the common sense of the term is not a concept with a possible binary definition (yes/no, presence/absence): It needs a definition of ‘intensity’ (a lot or a little, more or less)”.

When we say that socialism is democracy we mean that the democratic management of enterprises fulfils a democracy beyond which we can go only by reducing distributive inequalities to the minimum.

Bernstein’s idea of democratic socialism, we need to add, comes from his observation, expressed both in his The prerequisites of socialism and the purposes of social democracy and in Democracy and socialism, that in western democracies, while in politics all adults enjoy the same rights, in economic life the majority of people still live in a state of dependence. Bernstein rightly observed that socialism is the heir of liberalism “not only from a chronological point of view, but also for its ideal content” (Bernstein, 1899: p. 191) . Likewise, Rosselli considered socialism to be the heir of liberalism, since it is “the progressive actualization of the idea of freedom and justice among humans” (Rosselli, 1930: p. 92) ³. Gobetti considered socialism as “one of the greatest causes of liberation and liberalism in the modern world” (Gobetti, 1969: p. 439) ⁴. And Bobbio wrote on this subject that “there is no great dichotomy in social sciences where liberalism and socialism are not on opposite sides” (Bobbio, 1994: p. 48) .

These opinions are, therefore, a premise to the argument that socialism⁵ is labour-managed firms⁶.

Thereupon Bovero (1994: p. 316) objects that, when we think that socialism entails an extension of the democratic method to economic decisions, the idea of socialism seems to lose its independence from the idea of democracy, this is actually true for us: labour-managed firms confirm the opinion of the early socialists who “shared with their most tenacious opponents the belief that socialism and democracy were similar phenomena” (Cunningham, 1987: p. 5) .

Bovero (1994: p. 318) objects again on the identification of socialism and democracy, saying that, “if we stick to the only plausible and unequivocal meaning of democracy—essentially a set of technical rules concerning competencies and procedures, in other words the ‘who’ and ‘how’ of the process of collective decision making—it is rather clear why democracy is on a different level than liberalism and socialism. Democracy is not about purposes, but about means, methods and procedures”. This is true, though, for those who reckon that the scope of liberalism is freedom while the scope of socialism is equality⁷, whereas we do not define socialism with a juxtaposition between these two scopes⁸.

Theories are nets made to capture the so-called world: to rationalise it, explain it, dominate it. The argument that socialism is the realisation of democracy is useful to show better that capitalism is not democratic.

Rousseau (1762: p. 10) wrote:

“Mankind was born free, but it is in chains everywhere. Even those who feel masters of others are slaves as well. How did we get this change? I ignore it. What can legitimate it? I think I can solve this problem”. As for me, I believe I can say that labour managed firms would considerably increase everybody’s freedom.

Let us remember that cooperation and some practice of profit sharing represent the utmost expression of Marshall’s socialism, who was rather reluctant to a wider participation of the state in the management of firms.

We need to read the following passage by Luxemburg (1918: p. 622) :

“The battle for socialism can only be fought by the masses, face to face with capitalism, in every single enterprise, by every proletarian against his own entrepreneur. This is the only way towards a socialist revolution… Socialism must be made by the masses, by each proletarian. Just where they are tied to the chain of capital, this is where the chain must be broken”.

This passage is in line with the idea that socialism is realised when workers take firms away from capitalists and manage them democratically.

For socialists, demanding workers’ control over enterprises is the most important event in modern industrial capitalism. It is the seed of workers’ power, of socialism: what use is it for the worker to free himself from political oppression when economically he still depends on his master who dictates working, and often even living, conditions⁹? Regarding that, the great socialist Cole (1920: p. 14) remarked, like many after him, that “democracy, as recognised, is conceived in a strictly ‘political’ sense, as an idea which can only be applied in a totally particular sector known as politics, and not in a wider and more comprehensive sense”¹⁰.

Russian populism (and Mikhajlovskij in particular) thought that “the scope of capitalism is to annihilate workers” and, therefore, socialism, being “denial of a denial”, “will expropriate expropriators, making production media a property of producers (even without being a restoration of their private property)” (Walicki, 1979: p. 365) .

Raniero Panzieri (1967: p. 253) wrote: “the development of capital turned the relation between capital and working class into a dilemma: you have either a working class totally integrated into the capital, or a working class globally opposed to the capital, trying to overturn the capitalistic condition”. In an other writing (Panzieri R., 1958, Sul controllo operaio, in Panzieri, 1975 ) he remarked: “we cannot separate the workman as a citizen in his political fight from a workman in the factory; how can we expect that he, deprived, oppressed and defeated by his master in every way, gets transformed once he is out of the factory? The political battle of the labour movement does not end within the factory, but it should be fought at all levels and on all fields of society. The main battlefield, though, is that of the capitalist power: the factory. That is where workmen must oppose their power”. Therefore we reckon that even nowadays, as during Panzieri’s time, “we are at a moment when the only way to fight is by identifying new tools within workers’ battle which can present a unity of economic power and political power” (Panzieri, 1961: p. 129) . Is not that socialism which realises democracy?

The idea that socialism is a form of democracy, moreover, has some basis on a marxist analysis by Tronti on the evolution of capitalism. “At the highest level of capitalist development— Tronti (1962: p. 20) wrote—social relation becomes an articulation of production, in other words the whole society lives as a function of the factory, and the factory extends its exclusive dominion over the whole of society. On the basis of that, the apparatus of political state tends to merge more and more into the position of the collective capitalist, becoming more and more a property of the capitalistic world of production and thus a function of the capitalist”. This brings to the conclusion that “it becomes historically necessary to ground the general fight in the social relation of production, and destabilise bourgeois society from within capitalistic society” (Tronti, op. cit., p. 24)¹¹. In comment to Tronti’s arguments Vacca wrote (Vacca, 1972: p. 37) : “The fact that class struggle crosses vertically the whole social capitalistic milieu at all levels, and constitutes the unitary social law of movement, for Tronti means that all forms of class conflicts can be traced back to the conflict between workers and capital”. In other words, democracy can be realised by socialism.

Rodotà (2012: p. 14) wrote: “The ‘revolution of equality’, which was never accomplished, the difficult heritage, the promise never kept of the ‘brief century’, nowadays goes along with the ‘revolution of dignity’. Together they have given birth to a new anthropology, centred on people’s self-determination, on the construction of individual and collective identities, new ways to interpret social connections and public responsibilities”.

The idea that the passage from firms managed by capital to firms managed by labour is the realisation of socialism, we have written, does not belong to Marx. We need to remind Marx’s statement on that. He wrote: “the cooperative system, limited to the dwarf forms that individual salaried slaves can produce with their private efforts, will never be capable of changing the capitalistic society. In order to convert social production into a wide and harmonic system of free, cooperative labour, general social changes are necessary. Changes in the general conditions of society, which can only be carried out through the passage of the organised forces of society, in other words state power, from the hands of capitalists and estate owners, to the hands of the producers themselves”¹².

Sentences such as this one by Marx sometimes are interpreted as a confirmation that self-management of firms is not the realisation of socialism, because for the passage to socialism we need general social changes¹³. Those who associate self-management with socialism, therefore, must be clear about the fact that this association requires the political power to be democratized as well.

The affirmation that a passage to socialism requires general social changes can be intended in various ways, but not necessarily in the sense of the abolition of the market. Marx himself was explicit when he said that, after the end of capitalism, the market will have to be kept for a long period of time. In the Manifesto there are clear statements about the fact that the transformation process from old to new society must consist essentially in taking power away from the capital. “The proletariat—Marx and Engels wrote—will use its political supremacy to take away, little by little, all capital from the bourgeoisie” (Panzieri, 1961) . The plan Marx and Engels designed for the first phase following the conquest of power is clear about the fact that the process must be gradual, as it consists, mainly, of the following measures (pp. 505-506):

· expropriation of estate property;

· introduction of strongly progressive taxes;

· confiscation of property belonging to rebels and emigrants;

· centralization of credit and transports in the hands of the state;

· increased number of nationalised enterprises.

This list of measures to take shows that Marx and Engels did not think at all that the process of transformation should take place all at once, nationalizing immediately all the production tools, and starting at the same time a generalised planning. Marx never stopped stating—in polemic with Blanqui and later with Bakunin—that revolution is not a revolt, but the result of a process¹⁴.

In the last passage quoted, Marx, however, says that, in order to get socialism, power needs to pass in the hands of workers, meaning, of course, both economic and political power. It seems correct to say that, in order to get socialism, the management of firms by labour is not enough, but we need political power to pass from capitalists to workers¹⁵.

Market socialism is not only a form of social organisation different from capitalism, but is a form of social organisation which, in its most interesting organisational form, brings in a real overturning of the relation capital-labour.

Immanuel Wallerstein (2000: p. 125) wrote: “If, tomorrow, U.S. Steel became a union of workmen where all employees received an identical share of profits, and all shareholders were expropriated without any compensation whatsoever, would U.S. Steel cease to be a capitalist enterprise operating in a capitalist economy?”. His answer is no. To us, however, it is clear that an enterprise is capitalist if it is managed in the interest of capitalists, and socialist if it is managed by workers (or their representatives) in the interest of workers. As for the system, then, it is just as clear to us that capitalism is a system where capitalist enterprises are prevalent, whereas socialism is a system where socialist enterprises prevail for their number and importance. Wallerstein seems to contradict himself when he admits that “capitalism means…labour as merchandise” (Wallerstein, 2000: p. 108) , because in a system of labour managed firms, workers are ruling, and there is no work force as merchandise: this system, therefore, cannot be considered capitalistic.

It is true, though, that market socialism can be viewed as the development and radicalisation of liberal thought, as we said. The revolution we need to carry out nowadays is to give workers who are subordinate today the same freedoms conquered by bourgeois with French revolution.

The author declares no conflicts of interest regarding the publication of this paper.

Jossa, B. (2024). Self-Management: A Milestone in the History of Freedom. Open Journal of Social Sciences, 12, 96-104. https://doi.org/10.4236/jss.2024.123009