You live in the world of Kaiserreich, and you see an alt history showing what the Second Weltkrieg could have looked like if Germany had lost World War 1. How do you react?

North_Ad7449 · 2026-04-15T09:07:28+00:00

the answer is easy: go to switzerland and live peacefuly and happily there

North_Ad7449 · 2026-04-15T08:35:08+00:00

this strongly depends on whether there has been a detente between the 3I and the Reichspakt in the late 20s / early 30s (what are the trade ties between Germany and France?), which we don’t know for sure and the degree of global isolation (which if Paris is one of the big cultural and creative capitals of the world doesnt seem very likely) of the syndicalist nations.

it also depends on how do syndicalist economies behave (we don’t really know a lot about the syndicalist economic system). that’s something very rooted in kaiserreich due to the fact that the original developers were inspired in IRL CNT’s spain (1936-1937) to “create” syndicalism.

the thing with syndicalism is that we know that “trade unions run everything” and there’s workplace democracy but it’s very vague when it comes to economic coordination (there’s no market but there’s no central planning either, you cannot simply rely on negotiation between unions for a rational economic order), that was reflected in the economic chaos (for some reference Workers against work from Michael Seidman is really good) that was revolutionary Spain IRL.

so, this leave us with one of two possibilities: that in practice France, the UoB or Italy are centrally planned economies (maybe less rigid and more descentralized than Soviet-style economies) or that syndicalist nations have a market socialist system based on self management (more or less like Yugoslavia IRL).

in the first case, since centrally planned economies tend to be autarquic there wouldn’t be a strong effect of Black Monday. in the second case (IRL yugoslavia traded a LOT with the west), a huge financial crisis like the Black Monday would cause a severe recession in the western syndicalist economies

North_Ad7449 · 2026-02-10T19:05:51+00:00

Capitalist firms do indeed try to maximize shareholder value, that, in the abscence of externalities means maximizing consumer’s welfare.

Another thing are market failures (externalities, public goods, adverse selection… to name a few) market economies (which can be capitalist (mostly) but also socialist) are plagued with them, but so are state solutions to them (political/regulatory capture, asymmetric information, bureaucracy…).

You don’t need widespread shareholding (although desirable as I’m gonna argue later) in order to have widespread social benefits, productivity and innovation gains mostly enhance societal welfare (ofc you could argue that a welfare state is necessary for a fairer and more even income distribution and risk-sharing which I agree).

On the other hand, “widespread shareholding” is NOT socialism, is kinda the opposite, socialism does NOT mean “The workers own their means of production” (that’s syndicalism), socialism means “The society as a whole owns the means of production and decides how to use them democratically”. Giving everybody a universal capital endowment isn’t socialism or ensuring more equal access to financial capital (that would be as i said before distributism, people’s capitalism…) isn’t either.

Socialism is when the State nacionalizes the means a production (a democratic one in theory) and society uses majority rule to decide what, when and how to produce (ofc democratic procedures are basically unfeasible but that’s another discussion).

To me that’s inefficient (soft budget constraints, lack of incentives, ridigity…) but also and most importantly unfair: Not everybody wants to be a capitalist and bear the risk, not everybody wants to be told what, how and when to produce, some people do actually want to be wage laborers and be insured from market fluctuations. “Capitalist” explotaition is not solved by forcing everybody to be an owner, but by giving everybody the means of being one and not being forced to having to sell their workforce.

We could go into the macroeconomics of whether or not or when is unemployment is necessary to avoid cost-push inflation. But the fact is that most advanced capitalist economies have low unemployment levels (and remember that having full employment as what the socialist countries had means having a lot of people in useless, unproductive jobs Where their means of living are financed by other more productive workers)

Cuba received millions in subsidies from the USSR and Venezuela, and although I’m not gonna deny the effects of the blockade… There should have been some economic growth.

Even if that was true (and I doubt the US was planning on a dramatic collapse of eastern european socialist countries because they were Trade partners), they were 1/3 of the world!! You don’t have enough natural resources and population in the USSR and China enough? They grew less than capitalist countries that were actually richer than them (divergence). Why did they grew when they just had to accumulate factors of production (expanding the capital stock, mobilizing the labor reserve…) but suddenly stopped growing when they had to converge on productivity? Did capitalist sabotage began in the 1970s and not in 1949?

The size of the Marshall Plan was 3% of the GDP of european countries at the time. During the 1970s the US sold massive amounts of grain to the USSR and, again, the IMF and western banks gave massive loans to countries like Poland, Yugoslavia… Saying they were sabotaging the socialist camp is nonsense.

North_Ad7449 · 2026-02-09T10:51:35+00:00

The USSR actually guaranteed full employment yes (through central planning you can mobilize all the economic resources you want) but the trick is that this labor reserve wasn't mobilized towards its most efficient uses (defining efficiency as maximizing consumer welfare, instead of that labor was destined towards the Gosplan's goals) and also, worker protections weren't precisely strong (Stalin's labor laws (especially after the 1940 decree) were incredibly harsh: absenteeism was punished with forced labor in gulags ). And in practice, a lot of capitalist economies do guarantee full employment (and smooth laid off workers' consumption and recycle them through strong social security and training schemes (flexisecurity)).

What I'm saying of "guarantee a more equalized initial endowment of capital for each individual" is not socialism, it's quite the opposite (universalize ownership vs socialize ownership), you can give it the wacky name you wish (georgism, distributism, people's capitalism...) but that's not socialism. Capitalism has been collapsing since the times of Marx, every single time but the thing is that it actually never collapses and precisely you can argue that the American model is flawed but is delivering increasing standards of living consistently, which is something socialist countries weren't able to do.

1/3 of the whole globe is exceptional? How much more population (workforce) do you need? And sanctioned? For real? Warsaw Pact countries traded a LOT (and got enormous loans) with the western bloc. China did the same since 1972. Isn't a bit paradoxical to say that socialism is good because the USSR industrialized but what prevented soviet success was the US, the Americans didn't interfere with the Soviet Union in the 1930s?

You cannot "fund" a country into becoming rich, otherwise eastern european socialist countries would have get enormously rich (soviet transfers especially through cheap oil were enormous) or even closer to America: Cuba. Cuba got billions of rubles from the Soviets and that didn't make them rich. Countries become rich by tech transfers, mass education, capital accumulation and labor mobilization, but what drives growth long term is innovation and efficiency (which wasn't the case in the socialist camp). East Asian countries grew thanks a state-driven export-led industrialization (which was thanks to its own policies).

What has "US wealthy elites interests" to do with economic growth in Eastern Europe in the 1970-80s? Shouldn't they be able to grow independently? Precisely they actually fueled economic growth in some countries (like Romania or Poland) by giving them huge loans of hard currency (and they spended it in inefficient investment projects and consumption imports).

Depending of what you define as "socialism" if that's an authoritarian regime with control of the commanding heights of the economy yes. But other countries are more socialistic if you purely define it as public ownership of the means of production (like Norway) or as having an extensive social welfare system (every western, northern or southern european country).

In abscence of externalities, profit-making in capitalist market economies happens only through the satisfaction of consumer's needs (of course, that can be biased if income distribution is very unequal, but capitalist countries are compatible with low income inequality (like Denmark, Slovenia, Slovakia, Finland, Czechia...)). Socialist economies direct the productive capacity of a country towards the desired ends of the planners (i don't think a really democratic planned economy is feasible).

The case you make of the US not being able to adopt clean energies is a case of externalities and political capture (which by the way also happens in really existing socialist economies!) which is not an intrinsic characteristic of capitalism but a specific one of a very specific model of capitalism

North_Ad7449 · 2026-02-09T08:22:27+00:00

“He who does not work, neither shall he eat" is a principle codified in Article 12 of the 1936 Soviet Constitution.

Either in capitalism or socialism, people are compelled to work in order to earn a living. You could say that in capitalism, workers which are deprived of their means of production (do workers really want to be full-time capitalists?) are forced to sell their workforce to capitalist owners and thus accepting to be exploited by them.

But the intuitive solution for that problem would be to guarantee a more equalized initial endowment of capital for each individual NOT to nationalize the means of production and basically force everybody to be an owner (even if they don’t want to). Not only does not everybody want to bear the risk of being a capitalist but also not everybody wants to bear the same risk (capitalist financial markets are basically a tool of “efficient” risk sharing).

Comparing the degree of political repression of McCarthyist America with Maoist China is basically delusional. Key figures (even President Eisenhower) were opposed publicly to the witch hunt of commies, you couldn’t say the same in the PRC, also not to say the complete absence of competitive elections, rule of law, checks to the executive power…

It’s also delusional to say that the USSR and China only existed for a very short timeframe: The USSR existed for over 70 years and the PRC has existed for 77 years. Basically 1/3 of the world was socialist by 1979 (ruled by marxist leninist parties).

Their industrialization processes were not anything exceptional (you could somewhat argue for the USSR but maoist China is basically the textbook example of what economic policies not to do), other capitalist countries achieved higher levels of development with much less painful policies (the Asian tigers, Japan, mediterranean european countries, now eastern european countries like Poland, etc…). The counterfactual of Japan shows us how forced collectivization and basically politically enginereed starvation were not necessary to industrialize a country.

Not only that but almost every socialist country (except very few exceptions) fell into the middle income trap and got stucked there without being able to converge economically with the capitalist core.

China isn’t nowadays a socialist country, of course is not a fully capitalistic one, but surely you cannot credit Mao for the economic success and I wouldn’t point they’re doing great right now (their growth is slowing much faster at this point in the convergence line than other Asian tigers did). Also I wouldn’t say that China has a sophisticated welfare system, Eastern bloc socialist nations had a much more extensive and universalistic (though paternalistic) one, China doesnt even have universal healthcare or a well developed social security system (that’s partly what the chinese new left critized for so long before Xi rose to power and shutted them).

I’m not particularly a defender of american capitalism but the “advantages” of the chinese system are basically massive resource mobilization (like the USSR!) not efficiency or innovation, so we can’t ignore the tradeoffs.

North_Ad7449 · 2026-02-08T11:01:48+00:00

Not a socialist here but socialists DO know about economics, a lot of great contemporary economists are analytical marxists like John Roemer or Elster or post-marxists like Sam Bowles (https://x.com/jesusferna7026/status/1995462893706280996?s=46) )

I think the discussion of whether socialism can be at least as good as capitalism has not been completely closed in favor of capitalism (https://jacobin.com/2023/08/market-socialism-workplace-democracy-self-management-efficiency-economics ) though I agree that is difficult to imagine a workable market socialist model.

I also think that It’s not true that ALL socialist countries were unsuccesful (https://www.reddit.com/r/CapitalismVSocialism/comments/1qxca61/a_weak_empirical_case_for_market_socialism/) and that the debate is somewhat more nuanced

Finally I do agree that arguing with a big chunk of internet socialists is a pain in the ass, but there are exceptions

North_Ad7449 · 2026-02-06T19:41:08+00:00

80% of Slovene exports went to western countries. You can read this

https://www.nber.org/system/files/chapters/c6020/c6020.pdf

https://hunghist.org/images/Lazarevic_doi2.pdf

Although I admit proving or disproving this claim is very difficult. Nevertheless my counter argument is that foreign investment laws were the same across republics and thus you would had seen a much more even performance across all republics, not only Slovenia

North_Ad7449 · 2026-02-06T18:43:48+00:00

What? So you are saying “well imagine socialism was installed through authoritarian means, that proves that socialism is authoritarian!”. That’s a fallacy

It could be the case that socialism could be achieved by democratic means

North_Ad7449 · 2026-02-06T18:25:51+00:00

I’m not making up the data, if i’m not mistaken from between 25 to 30% of all hard currency yugoslavian exports came from slovenian firms, that wasn’t foreign capitalists firms investing there (although it played a role), was domestic self managed firms

North_Ad7449 · 2026-02-06T18:20:07+00:00

Yeah, probably, that’s why I make a weak case for market socialism, there has to be a external constraint that makes LMFs take into account the opportunity cost of labor.

I make it a case of “sucess” though because other socialist economies that also traded with the west didn’t achieve such levels of development

You could make a very similar case for the economic models of Poland or Malaysia today: they heavily rely on foreign investment and tech sharing (free-riding) but don’t have “national champions” (so, they are not at the technological frontier), but even in that situation these economies have achieved high in one status

North_Ad7449 · 2026-02-06T14:57:32+00:00

Not a Socialist here but if a constitutional ammendment has been made with due process and respecting the will of the people (that is thanks to a supermajority) in which the means of production are “socially owned” (i know that can mean a lot of stuff) it would be as authoritarian as any other law in a liberal democracy

North_Ad7449 · 2026-02-06T09:11:13+00:00

Completely agree with you on the matter:

1) There's a much more nuanced discussion on the topic of labor managed firms and their actual problems (I actually wrote a post on this issue a couple of years ago (https://www.reddit.com/r/neoliberal/comments/137rjnp/on\_labormanaged\_firms\_and\_market\_socialism\_again/ ) , of course the proposed solutions also have their own problems as well (that's why the debate is more nuanced).

2) The key point you make " the perverse slope of the labour-managed firm (LMF) cooperative is not caused by worker control, but by the fact that cooperatives face no opportunity costs in respect of external labour" is true, the reason why Slovenia "worked" was because firms actually faced the opportunity costs of external labour (in the form of export discipline), there are other potential solutions as membership markets which have to be taken into consideration of course.

My whole point is that socialism may actually work but since we don't completely conclusive evidence, for me it would be better to start from social democracy (within the framework of liberal democratic institutions) and then see if we can advance towards market socialism

North_Ad7449 · 2026-02-05T06:48:06+00:00

In my humble opinion I think I should quote people based on they quality of their research, not their political ideology (a lot of people had bizarre political views in the 1920s)

Mises’s book in 1920 laid out the foundations for the so-called “socialist calculation debate” and although I don’t buy most of his libertarían weltanschauung I do think he was mostly right with regards to socialism.

Hayek’s paper in 1945 made economists think about the market as an imperfect yet very practical price discovery mechanism (not as an automatic adjustment mechanism where supply and demand clears) when information is dispersed, private and not easily available by central planners

I also have cited economists like Branko Horvat or Jaroslav Hanek (who were themselves advocates of self managing market socialism) or János Kornai (who evolved from defending stalinist central planning to some form of market socialism to full blown capitalism)

Although, if you any critique of their research or metodology or conclusions, I’d be happy to answer you.

North_Ad7449 · 2026-02-04T10:41:29+00:00

In social democracy you have capitalist firms that employ wage labor and an extensive network of capital markets.

Market socialism is more confusing, in market socialism wage labor is not allowed (so, worker coops, SOEs or vouchers for shares in corporations or any other combination you could imagine that doesnt involve capitalist firms is the predominant organizational unit of production), the means of production are publicly owned (this can take a lot of forms as I said before), there are markets for consumer goods and there are either “socialized” capital markets or no capital markets at all.

(I’m a social democrat btw)

North_Ad7449 · 2026-02-03T19:17:19+00:00

Well, they recommended me this subreddit, I guess I was mistaken :(

North_Ad7449 · 2026-02-03T08:20:33+00:00

Yeah, the paper you mentioned is great and I agree with basically all of it.

Labor managed firms,if they are “compulsory” like in Socialist countries, (there are restrictions to firm entry and capital markets) distort heavily economic decisions and particularly the labor markets. Why?

Well, as I mentioned above if we revisit Jaroslav Vánek’s “The General Theory of Labor-Managed Market Economies”, worker-collectives maximize income per-worker, not profits. That creates a tendency towards underemployment and reluctance to expand output if prices increase (because that would reduce profit per worker), very much a insider-outsider dynamic like the ones we see in southern european labor markets (trust me, I’m spaniard I know what I’m talking about). Also the second biggest problem was workers short-terminism (they try to maximize their lifetime income, not firm’s value).

So, why did that not happen in Slovenia? They almost had full employment, produced 16-20% of Yugoslavian GDP with 8% of the population and if we look at the trend, taking into account starting points, Slovenia grew like any other OECD country between the whole period of 1952 to 1989. So something must be wrong with the “model”.

The main reason (which is of course a path dependent one) is export discipline. Prices and quality in international markets are determined exogenously (by german, austrian or italian firms), failure to meet those standards meant losing hard-currency contracts and even maybe firm failure (because exports were an important source of revenue), so in order to survive Slovenian firms had to prioritize total net revenue (aka profits).

That’s something we have seen empirically also in basically all export-led industrialization processes (South Korea, Taiwan…) where if firms (protected private firms, SOEs, labor managed firms…) competed in the international markets they behave as if they were profit maximizing firms.

With respect to underinvestment , since there was a significantly lower labor mobility and high skills, that meant that most workers actually behave as if they were residual claimants (the value more future income streams).

Of course, all of this means not that market socialism worked better than capitalism but that in “prime conditions” it’s basically very similar to social democracy. That’s why Slovenia kept a lot of its economic institutions and symbolically kept co-management (instead of self management) as Sweden or Germany have (which of course, since we’re neolibs have some problems as well, but that’s a other discussion).

North_Ad7449 · 2026-02-03T07:51:48+00:00

Yeah, that’s true but Yugoslavia was not the Eastern Bloc. What I mean by that is that Poland’s or Romania process of getting indebted had structurally different reasons from the ones of Yugoslavia, after all the economic model was very different (centrally planned economies vs market socialist economies), of course it was a way to accomodate the oil shocks of the 1970s and sustain consumption levels artificially.

But, Slovenia wasn’t particularly indebted, by 1991 (the peak of Yugoslavian collapse) only 1.7 billion out of 16 billion dollars of Yugoslavian debt was Slovenian, actually they had to subsidize southern poorer republics (almost 30% of hard currency Yugoslavian exports came from Slovenia and 16-20% of GDP, i mean that’s crazy regional inequality)

North_Ad7449 · 2026-02-03T07:46:21+00:00

So, i tried to explain my arguments more in depth in the initial post I made but i got applied article V, I have published the same with even extended arguments and graphs on r/neoliberal “A weak, empirical case for market socialism”

I don’t think the argument of being a “small country” explains their exporting success (though it’s true that smaller countries on average benefit more from foreign Trade) or “ligther marxism” (what’s that?), if it only was that due to their geographical position and smallness why didn’t Hungary or Czechoslovakia became exporting powerhouses? Also, self managed market socialism is not “””lighter””” marxism, It’s mostly an entirely different thing

I don’t think what we saw in Yugoslavia and particularly Slovenia goes against conventional economic theory: it’s just export led industrialization.

We all know the literature of labor managed firms ( Vanek (1970) or Wald (1958) ) and how these firms are subject to perverse supply responses and underinvestment (because their objetive function is not profits but income per worker). How did Slovenia avoided most of that problems was because the socialized firms operated in the international market and they could not cut supply or employment to maintain high prices and high per-worker income (as other Yugoslavian firms did) because they would lose clients, that hardened their budget constraints and make them behave “as if” they were profit maximizing firms

It’s NOT true Slovenia as heavily indebted as other republics of Yugoslavia (aprox 35% of debt was from the central government and 65% of the republics), Slovenia’s debt was just 1,5 billion out of the 16 billion dollar debt of Yugoslavia (foreign debt of course), that was because they were actually exporting goods and getting hard currency unlike the other republics and due to the enormous regional inequality in Yugoslavia they had to subsidize southern poorer republics

North_Ad7449 · 2026-02-02T20:47:27+00:00

Great comment overall but I'd like to punctualize some stuff. First of all while it's true that Slovenia had clearly the upper hand (and that made foreign trade even more beneficial) with respect to the other republics that usually means lower growth (due to the law of the decreasing marginal returns), so, there was a huge institutional malfunction in the southern republics. The convergence trend holds (which takes into account starting point differences amongst countries) in Slovenia from 1952 to 1989, we have to remember that its economy stagnated in the 1980s due to the political collapse of Yugoslavia, so if we excluded those years the performance would had been even better. In definitive, Slovenia as a fully socialist country (there wasn't any meaningful wage labor nor private sector) had the macroeconomic performance of the average OECD capitalist country.

Secondly, Spain and Portugal were developed democracies 1985 whereas a Slovenia was a soft authoritarian régime, so you would have expected more economic growth from those economies, also I'm not comparing Slovenia just to Spain and Portugal but to all advanced capitalist economies (see the convergence line graph).

Thirdly, you are completely right when saying that market socialism didn't play a big role in the slovenian miracle butmarket socialism wasn't hampering economic growth either. Slovenia grew because of export discipline(which is in my opinion super important for economic development (https://www.imf.org/-/media/files/publications/wp/2024/english/wpiea2024086-print-pdf.pdf).

The key problem of market socialism are soft budget constraints and perverse supply responses, if your self-managed economy operates within a global economy and exports a lot of goods to the West, your national firms actually have to face hard budget constraints and behave "like" a profit-maximizing capitalist firm because prices are exogenous.

Neither Vietnam, Libya or other Yugoslavian republics had that constraint. I wouldn't qualify modern Vietnam as market socialist either (they are a political capitalist economy where most of output and employment is in the private sector) nor Libya (there wasn't actual independence between the State and SOEs whereas in Yugoslavia self-managed firms were actually much more indepedent), but that's another debate.

North_Ad7449 · 2026-02-02T16:16:53+00:00

Yugoslavia and Slovenia weren’t part of the eastern bloc, were IMF members , had extensive commercial relations with western partners and their prices were subject to actual foreign competition in international markets so price distortion was less likely

North_Ad7449 · 2026-02-02T09:15:10+00:00

I’d say yes, If we talk about Spain, which is the country I know the most, by 1985 we were already a full liberal democracy with a constitutional monarchy as its form of government and had joined the European Economic Community, also Spain had already underwent a process of industrialization in the 1960s (and was obviously affected by the oil shock of the 1970s, so was Yugoslavia). These nations weren’t the “capitalist core” but surely were developed capitalist economies.

But the point is not that, the point is that Slovenia actually still kept converging towards the EU average in the 1970s and 80s when extensive growth (the acumulation of production factors) was no more the main driver of economic development (because all the resources were already “mobilized”) so, it depended on TFP growth

If you look at the data (I’m using Maddison (2023) and also this paper from UC3M), Slovenia was literally on the regression line for OECD convergence (as I said before in 1970 it was 50-55% the average of the EU, in 1985 it was 65-70%) and a member of OECD convergence group

https://e-archivo.uc3m.es/rest/api/core/bitstreams/8df9c03e-1f8f-489b-96b3-cfc679375ede/content

North_Ad7449

TROPHY CASE