Main article: Market socialism Market socialism consists of publicly owned or cooperatively owned enterprises operating in a market economy. It is a system that utilises the market and monetary prices for the allocation and accounting of the means of production, thereby retaining the process of capital accumulation. The profit generated would be used to directly remunerate employees or finance public institutions.[40] In state-oriented forms of market socialism, in which state enterprises attempt to maximise profit, the profits can be used to fund government programs and services through a social dividend, eliminating or greatly diminishing the need for various forms of taxation that exist in capitalist systems. The neoclassical economist Léon Walras believed that a socialist economy based on state ownership of land and natural resources would provide a means of public finance to make income taxes unnecessary.[41] Yugoslavia implemented a market socialist economy based on cooperatives and worker self-management. Proudhon and his children, by Gustave Courbet, 1865. Pierre Joseph Proudhon, main theorist of mutualism and influential French socialist thinker. Mutualism is an economic theory and anarchist school of thought that advocates a society where each person might possess a means of production, either individually or collectively, with trade representing equivalent amounts of labor in the free market.[42] Integral to the scheme was the establishment of a mutual-credit bank that would lend to producers at a minimal interest rate, just high enough to cover administration.[43] Mutualism is based on a labor theory of value that holds that when labor or its product is sold, in exchange, it ought to receive goods or services embodying the amount of labor necessary to produce an article of exactly similar and equal utility.[44] The current economic system in China is formally referred to as a Socialist market economy with Chinese characteristics. It combines a large state sector that comprises the commanding heights of the economy, which are guaranteed their public ownership status by law,[45] with a private sector mainly engaged in commodity production and light industry responsible from anywhere between 33%[46] (Peoples Daily Online 2005) to over 70% of GDP generated in 2005.[47] Although there has been a rapid expansion of private-sector activity since the 1980s, privatisation of state assets was virtually halted and were partially reversed in 2005.[48] The current Chinese economy consists of 150 corporatised state-owned enterprises that report directly to Chinas central government.[49] By 2008, these state-owned corporations had become increasingly dynamic and generated large increases in revenue for the state,[50][51] resulting in a state-sector led recovery during the 2009 financial crises while accounting for most of Chinas economic growth.[52] However, the Chinese economic model is widely cited as a contemporary form of state capitalism, the major difference between Western capitalism and the Chinese model being the degree of state-ownership of shares in publicly listed corporations. The Socialist Republic of Vietnam has adopted a similar model after the Doi Moi economic renovation, but slightly differs from the Chinese model in that the Vietnamese government retains firm control over the state sector and strategic industries, but allows for private-sector activity in commodity production.[53]
Posted on: Thu, 14 Nov 2013 19:57:18 +0000
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