The idea of eroding capitalism is not simply a matter of undermining the dominance of capitalist investments and firms in the market; it also involves eroding the capitalist character of capitalist firms themselves. What does this mean? Eroding the capitalist character of firms means restricting the array of rights that accompany “owning the means of production.” Property rights in the means of production are actually complex bundles of rights, and over time within capitalist societies, the state has imposed significant constraints on these rights. Minimum-wage laws, for example, restrict the right of employers to pay whatever someone is willing to accept. Health and safety rules regulating the workplace restrict the right to organize the production process in a dangerous manner. Pollution and product safety laws restrict the right to impose costs on others, even if this would be the optimal profit-maximizing strategy of a firm. Employment security laws restrict the ability of employers to fire workers whenever they like. In a democratic socialist economy, these constraints on the private property rights of capitalist firms would be extended and deepened in order to advance the values of equality, democracy and solidarity. Such firms would remain capitalist insofar as individuals can invest their capital in firms and receive a return on their investment, but the rights accorded to firms that accompany such private investment would be much more democratically restricted than in a capitalist economy.

In a democratic socialist economy, the democratic power of workers within capitalist firms would be extended and deepened. Isabelle Ferreras, in her book Firms as Political Entities (Cambridge University Press, 2017), has proposed one way of accomplishing this: All capitalist firms above a certain size would be governed by a bicameral board of directors, one elected by shareholders in a conventional manner and the other elected by workers on a one-person-one-vote basis. She argues that firms are political entities quite analogous to states. The largest global corporations, after all, have annual incomes much larger than most countries. During the development of representative democracy in states, there was frequently a period in which one chamber of a bicameral system represented property owners (such as the House of Lords in Great Britain) and the other chamber represented the people (the House of Commons). In a parallel manner, a bicameral board of directors could choose the top management teams of modern corporations, and all important corporate policy decisions would have to be voted on and passed by both chambers. This would significantly constrain the exercise of economic power within corporations and expand the role for social power.

It is not a simple matter, of course, to figure out precisely which services are best produced through markets, or which directly by the state, and which would best be organized through state funding to various kinds of non-state organizations. This is one of things that would be decided through a process of democratic deliberation and experimentation in a democratic socialist economy. But state provision directly and indirectly would certainly include most of the following: caregiving services—health care, childcare, eldercare, disability care; public amenities for community events and processes—community centers, parks and recreation facilities, theaters, art galleries and museums; education at all levels, including continuing education, lifelong learning centers and skill retraining programs; conventional physical infrastructure for transportation; and a range of public utilities. Collectively, these functions could easily encompass well over 50 percent of total economic activity in a technologically advanced capitalist economy.

Some things, of course, could be effectively provided by both the state and markets, and so the issue becomes the mix between the two. Consider access to books. Bookstores and libraries readily provide both. Commercial bookstores distribute books to people on the basis of their ability to pay; libraries distribute books to people on the principle “to each according to need.” In a library, if a book is already checked out, the person wanting the book is placed on a waiting list. Books are rationed on the deeply egalitarian principle that a day in every person’s life is of equal value. A well-resourced library will then use the length of the waiting list as an indicator of the need to order more copies of a book. Libraries often also distribute other important resources: music, videos, access to computers, tools, toys, meeting rooms and, in some libraries, performance spaces. Libraries thus constitute a mechanism of distribution that embodies the egalitarian ideal of giving everyone equal access to the resources needed for a flourishing life. In a democratic socialist economy, there would be an expansion of nonmarket, library-like ways of giving people access to many resources.

In recent decades, activists interested in making knowledge universally available for human purposes have created a number of alternatives to private intellectual property rights. Broadly, these are called “open-access” licenses, and include such things as Copyleft, Patentleft, Creative Commons licenses, and BiOS (Biological Open Source) licenses. These and other licenses have been used to protect the accessible status of open-source software, scientific discoveries with applications to agriculture and medicine, cultural products and other forms of knowledge. In a democratic socialist economy, while there may be a residual role for private intellectual property rights and limited patents, in general scientific and technical knowledge and information would be treated as part of a knowledge commons.

[...] it is far from obvious what sorts of policies are optimal for reproducing capitalism; effective solutions to a given problem may involve going against the interests of particular sectors or groups of capitalists, and their resistance may be sufficient to block functional solutions; the multiplicity of the different conditions for reproducing capitalism means that a solution to some of these destructive tendencies may undermine solutions to others. This last issue may be the most vexing. For example, state policies to reduce social conflicts of various sorts through the development of the welfare state may, over time, require levels of taxation and redistribution that encroach on capital accumulation. This is sometimes referred as the contradiction between the legitimation function of the state (fostering consent and thus reducing conflict) and the accumulation function of the state (creating optimal conditions for profits and capital accumulation). [...]

It is easy—but, I think, a mistake—to see this upsurge of right-wing populism as tapping into widespread, virulent racist and exclusionary nationalist identities. To be sure, there are undoubtedly people drawn to these political movements whose core identities are deeply hostile to racial minorities, immigrants and others. But for many, perhaps most, people who end up supporting right-wing populist politics, these aspects of identity become foregrounded as a result of the political context and lack of available alternatives. Beginning in the 1990s, the political parties traditionally linked to the working class generally embraced, to varying degrees, the core idea of neoliberalism: wherever possible, markets and private initiatives should replace direct state programs as ways of fostering economic dynamism and solving social problems. The disillusionment with the capacity of those parties to improve the lives of most working-class people creates a political vacuum that allows right-wing populism to gain traction. So, while exclusionary nationalism and racism are part of the cultural landscape of identities in most places, the extent to which they are foregrounded or subdued depends on politics.