Bhaskar Sunkara Thinks the Market Has a Place Under Socialism

Bhaskar Sunkara argues that market socialism persuaded him that socialism could be technically workable, though feasibility is separate from whether it is desirable. A socialist project needs a practical model alongside critiques of capitalism and immediate policy demands, he says, and should appeal to egalitarians who do not already identify as socialists. His preferred system would retain markets and consumer choice while expanding public provision, public banking, and worker control of production. He sees wage labor as exploitative and argues that a good society should not preserve the inequalities generated by its economic system.

In Sunkara’s model, consumer-goods and service firms would be cooperatively run, with public banks financing new businesses. Banks would set loan rates based on their assessment of a venture: a restaurant might pay more than an established, profitable business seeking to expand. Founders and prospective employees would agree on how the firm operates; a founder could initially manage it and receive a larger share of income, perhaps four or six times a worker’s share. Employees would be member-owners rather than wage laborers, earning a base rate and sharing residual profits.

Sunkara says markets can direct production toward luxury goods when income is unequal and can supply goods made under exploitative conditions. Worker ownership, elected management, and a share of residual profits could make firms less exploitative, while workers’ workplace voice could reduce incentives to hide useful knowledge or resist automation. Benchmark wages, such as $15 an hour for a line cook, could encourage businesses to improve management, invest in labor-saving technology, or offer a better product. He considers firm failure economically healthy because it could prevent the soft-budget constraints that kept inefficient firms operating in 20th-century state-socialist economies. Spain’s Mondragon cooperative, which he says was once the country’s fifth- or sixth-largest entity, is evidence that labor-managed firms can work; joining or starting one can also put workers’ labor and personal savings at risk.

Sunkara’s vision makes land and housing public but preserves a market for rents, with public construction responding to high demand and potentially carried out by worker-owned firms. He says the state would need to smooth local housing-value increases of 20%, 30%, or 40%. Administrative price-setting could distort prices, he acknowledges, but rapid construction could help offset those distortions. Public ownership of housing is, in his view, among the most radical and hardest-to-sell elements of the proposal.

He values markets as tools for coordinating choices and trade-offs, including decisions about how to allocate resources to build a railroad. His claim that market socialism could match capitalist development is deliberately “soft,” rather than a guarantee. AI might improve economic planning, but it would not itself execute a plan, and shifting needs and incentives would require plans to be revised. The speakers consider whether more capable AI could predict the outcomes of experiments and reduce the need for firms to test ideas entrepreneurially, potentially pointing toward communism. They also caution that even a seemingly perfect static plan could fail in execution, and suggest revisiting the question in ten years.

Sunkara describes Sweden’s 1960s full-employment policies as keeping employment high without runaway inflation, but says secure workers then pressed for higher wages and more industrial democracy. He regards the resulting social-democratic system as economically possible but politically unstable because capitalists retained the power to stop investing. Worker-ownership proposals such as the “Midler plan” offered a more socialist response, while the “Third Way” maintained redistribution and existing welfare states but limited further expansion and workers’ bargaining power. Social-democratic societies are better than the current U.S. model, he says, but are fundamentally different from his preferred system. The book does not explain how to move from ultra-capitalism to market socialism: existing ownership of homes and publicly traded stocks, opposition to change, and the difficulty of maintaining a new system through elections every two years all pose unresolved challenges. Sunkara also stresses liberal protections for individual autonomy, including protection from state direction of labor; society could choose more holidays and leisure in exchange for producing less and having less surplus.