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The Good Society 15.3 (2006) 37-44

The Limits of a Pluralist Commonwealth
Waheed Hussain

No word comes to mind more naturally in describing the economic system that we have now in the United States than "capitalism." Unfortunately, as soon as the word "capitalism" comes to mind, so too does its opposite, "communism." And once these two words are in the air, the tables are tilted in favor of the status quo: anyone arguing for change has to resist a tide of criticism, roughly of the form, "if you're not for what we have now, then you must be for the other thing, and how could you be for that?"

A great virtue of Gar Alperovitz's book is that it gives the popular imagination a different way of thinking about the issues. What we have now, as Alperovitz sees it, is not "capitalism" but a free market system that concentrates the benefits of wealth ownership in the hands of a tiny elite. And the alternative is not "communism" but a "pluralist commonwealth," a free market system that disperses the benefits of wealth ownership throughout the population. "America Beyond Capitalism" is an appropriate title, as the book tries to take us beyond talk of "capitalism" and "communism" altogether, reframing the discussion in a new and more constructive way.

I agree with much of what Alperovitz has to say. He is certainly right that we have to disperse the benefits of wealth ownership in society, and many of the measures he describes are quite reasonable. However, I think that we must be careful to recognize the limits of the asset-based strategies he proposes. These strategies are not as different from traditional approaches to redistribution as one might think, and they would not address some of the central concerns that make decentralization an important objective. The limits of these asset-based strategies suggest to me that any progressive agenda for economic reform must focus on social democratic arrangements, such as the German "codetermination" system, that aim to give unions and other workers' associations greater authority in determining the structure of social cooperation.

1. The democratization of wealth

One of the defining features of the pluralist commonwealth is the "democratization of wealth." For the sake of understanding what this means, we can divide the goods in society into consumption goods and productive assets. Consumption goods are goods such as food and clothing, which do not generate revenues for their owners, but can be consumed to satisfy a want or need. Productive assets are goods such as land, oil, natural gas, machinery, buildings, labor power, and artificial assets such as stocks, bonds and other financial instruments. These goods, unlike consumption goods, do generate economic returns for their owners. They can do so in many ways: a productive asset can be rented out to someone who will use it to satisfy a want or need (e.g. a house); a productive asset can be used to produce other goods for sale (e.g. oil); a productive asset can be rented out to those who will use it to produce other goods for sale (e.g. machinery); and a productive asset can appreciate in value as the forces of supply and demand push its price up (e.g. a stock).

A pluralist commonwealth is a free-market society in which the economic returns on productive assets improve the lives of large communities of individuals, rather than a narrow elite. So, for example, stock ownership in a pluralist commonwealth would be structured so that the returns on these assets would improve the lives of people in an entire community, township or region; these returns would not be allowed simply to flow into the hands of an elite group of large investors.

We might imagine many different ways that productive assets in society could be made to benefit large communities of people, but the pluralist commonwealth focuses on one approach in particular. The pluralist commonwealth is a society in which productive assets are owned by the right people: that is, productive assets...


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