Socialism and the Globalization of Capitalism

Socialism and the Globalization of Capital

July 31, 2025 • Eric Chester

Socialism has been an influential current within working-class since the French Revolution in the eighteenth century. The works of Marx and Engels had an enormous impact on the socialist movement, but they wrote in the latter half of the nineteenth century.

Nevertheless, there have been only brief periods during the past century when a democratic, decentralized vision of socialism has been put into practice. In Catalonia in the 1930s, where the anarchists were the dominant force on the left, and in Chile in the 1970s, where the election of a socialist, Salvador Allende, as president led to an upsurge in working-class militancy, experiments in the creation of an egalitarian society were put into place. In delineating the course of a future society, the examples of Catalonia and Chile must take precedence. Still, there are useful lessons to be learned in the experiences of social democratic countries and authoritarian statist regimes.

It has become strikingly obvious that capitalism is in decline. Articulating a positive alternative to the existing system is critical, especially given the rise of a militant, authoritarian populism.

Globalization and the Working Class

Capitalism has always been a global system of exploitation, with a horrific impact around the world. Yet the essential character of the global economy has evolved over time. During the initial period of capitalist development, the imperial center reserved to itself the entirety of industrial production. The countries on its periphery were restricted to providing the raw material required to produce industrial goods. Technological innovations were concentrated on increasing the productivity of the industrial sector.

All of this has changed. Industrial production has largely been transferred to the less developed countries. In part, this has occurred because computer-based industries have become the focus of technological innovation. These industries remain primarily located in the imperial center. Industrial production has also been moved to countries where labor costs less and environmental regulations are minimal. Capitalists also realized that large factories provide a frequent base for revolutionary movements, so they dispersed them around the world.

Although globalization has undermined the power of the industrial working class, it has further integrated the worldwide production of goods. This, in turn, means that workers in the transport and logistics industry become key. Dock workers, package delivery drivers, truck drivers and railroad workers play an increasingly important role in the global economy. These workers have the potential to become a vital part of a militant working-class movement.

At the same time as corporations move industrial production overseas, the capitalist system acts to proletarianize occupations that were previously situated within the middle class. Workers in these occupations come under tighter control by supervisors, as their workload is increased. Their wages decline in relation to those being earned by blue-collar workers. Teachers in public schools and nurses are two important job categories that must now be seen as important parts of the new, post-industrial working class.

Women make up a far larger proportion of unionized industries now than in the past. Most of those employed in factories and mills were men. Textile mills were the sole exception to this rule. Today, the situation is very different. The growing influence of socialist feminism within the left reflects this change in objective circumstances.

A Socialist Feminist Perspective

Our vision of a future society needs to recognize this evolution in the character of the working class. Education, especially the education of younger children, must be given priority in a socialist society. Small class sizes with a workforce of teachers that reflect the diversity of the community are essential. In a future society, women and men will agree to take joint responsibility for raising children. Those with a non-binary gender orientation will be fully integrated into society.

Democracy and transparency are of vital importance in a future society. These goals can only be achieved when power is decentralized, and the media remain independent and free to expose any abuse of power.

A socialist society must be more democratic than the existing capitalist system. There needs to be a wider range of opinions being voiced within the public discourse.

A democratic socialist society can only arise when the revolution is led by an organization, whether it be a union or a party, that encourages a vibrant internal debate and in which power is decentralized. History has demonstrated all too frequently that a revolution led by a party that is top-down and rigidly hierarchical will result in an authoritarian society with a ruling elite that is bound to become corrupt and dictatorial.

The Fundamental Economic Principles of Socialism

Democracy must be at the core of a socialist society, but this can only constitute a first step. In a socialist society, crucial decisions concerning the direction of the economy must be made through a collective process of decision making. This can only occur by the development of an overall economic plan. The proportion of total output going to investment rather than current consumption needs to be determined collectively. Furthermore, the proportion of output going to key sectors of the economy such as education, health care, housing and mass transit are key questions that should be set as part of the planning process. In a capitalist society, the wealthy few and their minions make these decisions based on what will benefit them. The socialist alternative requires the creation of a planned economy.

To maximize participation at the grassroots level, the planning process should be decentralized to the maximum extent possible. A general indicative plan could be developed at the national level, with specifics set within the broad parameters at the state and local level.

A planned economy can only be effective if the overwhelming majority of production units are under public control. Private ownership of the means of production based on the pursuit of profit is antithetical to the formation of a socialist society. Even the smallest shops should be brought into the public sector as rapidly as possible.

Within a socialist society, goods and services will be produced at workplaces that are publicly owned and under workers’ control. Smaller shops will operate as a collective, with the addition of a community representative. Larger workplaces will be directed by a council with representatives from those working at the workplace, as well as a minority of representatives from the community. It is essential that these councils reflect the diversity of the workforce at that workplace. This entails the appropriate representation of women and non-binary workers, as well as those from ethnic minorities. It also requires that each occupational category is proportionally represented on the council. In the past, socialists foresaw worker-community control of factories and mines. This still holds true, but now it is important to include schools, hospitals and offices. Worker control at the point of production is central to democratic socialism.

In a socialist society, everyone in the workforce will receive the same compensation, no matter what their occupation. Equality is a core value for socialists. Each worker’s contribution to the economy is valuable and should be given equal consideration in the distribution of output. This rule should also hold for those who no longer work having reached retirement age.

Exceptions from the equality rule should be few and the deviation from the norm should be limited. Those responsible for raising children will need to have preference in the allocation of larger apartments.

Most consumer goods will not be distributed through the marketplace. Indeed, there are several methods of distribution that bypass the market. Housing can be assigned based on waiting lists with preferences given to certain categories of applicants. Health care is already delivered through a triage system with priority given to those who require urgent care.

Market pricing is only one method of distributing goods and services. Markets encourage an excessive emphasis on the short-term. Furthermore, each individual makes choices about what to purchase without taking into consideration their impact on the entire community. Moving rapidly beyond the use of markets and money should be a primary goal of a post-revolutionary society.

The Transitional Stage of Socialism

These are the fundamental principles that underlie a socialist economy. The two historical models, Catalonia in the 1930s and Chile in the 1970s, acted in accord with many of these principals but were unable to entirely implement them.

Marx and Engels envisioned the evolution of a future society taking place through two distinct stages. In the first stage, socialism, the working class will control the state. In the second stage, communism, the state will wither away, and distinct social classes will be transcended.

Marx’s vision of the evolution of a future society remains a useful guideline, although one that leaves many questions unanswered. Until now, the efforts to create a new society have taken place in countries that were either surrounded by hostile powers or bitterly divided by civil war. Of course, socialism has always been seen as an international movement. Until Stalin, no one even considered the slogan of “Socialism in One Country.” Socialism can only succeed if it spreads throughout the industrialized world. Nevertheless, this will not take place instantaneously. Thus, there will need to be a preliminary step prior to Marx’s two stages, a post-revolutionary transitional stage toward a fully achieved socialist society.

It may well be that in the transitional stage certain fundamental principles underpinning a socialist economy will only be partially achieved. Those employed in certain critical occupations may have to be given strictly limited material incentives to inhibit their being poached by countries that remain under capitalist rule. It may also take some time to convert the smallest shops and farms into worker-controlled collectives. In the immediate aftermath of the revolution, markets may have to be used to distribute a small range of consumer goods and services. It is essential that any exceptions to the fundamental principles be strictly restricted in their scope and limited

in time. As the revolution consolidates its victory over capitalism, the new society must move forward toward a fully socialist society, rather than backward to greater inequality and a capitalist counter-revolution.

From Socialism to Communism

The shift from the transitional stage to socialism cannot occur until the revolution has spread throughout the industrialized world. This will allow socialist states to drastically reduce military spending. Furthermore, the fundamental principles will then be completely implemented within the economic system. Equality will become the universal rule, and people will act in cooperation, rather than trying to outdo each other in a ruthless competition.

Still, problems will remain. Socialist countries will need to address the huge gap in income between nations that has been intensified by global capitalism. Socialist societies will need to transfer significant resources to less developed countries, while also providing funding for domestic investment to ensure that the standard of living continues to rise and the workweek continues to be reduced.

Marx’s formula that a socialist society is characterized by the rule of the working class implies the continued existence of different social classes. Of course, the capitalist class will have been expropriated, so this leaves the working class and the middle class.

For a socialist society to keep moving forward to greater equality and a genuine democracy, it is essential that the middle class of professional experts and technocrats are not permitted to entrench themselves in positions of power. A rapid turnover of those in key positions can help to ensure that the working class remains, in fact, in control. Blocking any effort to diverge from the equal distribution of consumer goods is also an important safeguard. Most importantly, raising the general level of education needs to be a central focus of a socialist society, so that everyone can fully participate in the decision-making process.

Unlike the shift from the transitional stage to a fully implemented socialist society, moving from socialism to communism will be smooth and seamless. The hierarchy of social classes will disappear. Work that is viewed as burdensome and monotonous will be largely mechanized. The remaining undesirable work will require such a small amount of labor that everyone in the workforce will be able to engage in productive, creative jobs while working a few hours a week at less fulfilling work.

In a communist society, everyone will have equal access to the output of consumer goods and services, even those who are unable to hold jobs.

Yet even within a communist society, environmental constraints will continue in force. Marx’s slogan of “From Each According to Their Ability, To Each According to Their Need” points in the wrong direction. Resources are finite and waste is to be avoided. Everyone will be able to live comfortably, but no one can have everything they might possibly desire.

For a Socialist Future

Although the task before us is formidable, the goal of a just society can be reached. A revolutionary transformation of the existing system is the essential first step in this process. Capitalism cannot be reformed. Markets are bound to generate huge inequalities in income and wealth. Corporations relentlessly destroy the environment in the pursuit of maximizing profit. Militarism and wars are a constant feature of a globalized capitalist economy.

A socialist revolution does not depend on violence and retribution. It relies on a mass social movement that can confront the capitalist state at the workplace and on the streets. General strikes, mass rallies and targeted acts of civil disobedience are the tactics of a socialist movement.

Even after the revolution succeeds in coming to power, major problems will remain. Nevertheless, a future society can immediately and

dramatically alter the direction of the economy, moving from the production of cars and missiles to the building of schools, hospitals, housing and mass transit.

Socialism continues to be the only positive alternative to the barbarism of capitalism.