THE UNITED STATES' MIXED ECONOMY

At this writing (March 2002), the U. S. business press is cautiously proclaiming signs of recovery from the recession that began at least two years ago. The Federal Reserve Open Market Committee has abandoned its aggressive rate-cutting campaign of the past nine months. To be sure, it is a strange recovery, in which conditions for working people are still worsening, and one must doubt its strength and potential; even President Bush wondered aloud recently about a "recovery" in which unemployment rates are still rising. The effects of low unemployment in bolstering the economic strength of the working class, and of high unemployment in bolstering its political strength, have become elastic and conditional in perhaps unprecedented ways since the Great Reversal of 1989-91, and the role of hegemonic ideology in determining the actual course of capitalist accumulation has correspondingly grown, at least for the moment.

Now, the dominant ideology appeears to have two branches, and these are in partial contradiction to one another. First, the famous TINA ("There Is No Alternative"), addressed in several recent "Editorial Perspectives" (Winter 1999-2000; Spring 2000; Spring 2002). But there is also the notion of the "mixed economy": present-day reality is already a blend, or mixture, of socialism and capitalism; there are no "systems"; the social choice is rather a matter of degree, of changing the relative weights of the elements in the mix. The "mixed economy" conception is related to the idea of "people's capitalism" through spreading stock ownership, the "pension-fund socialism" of Peter Drucker, and many similar proposals. It is, of course, TINA in another form. It also aggressively reduces macro-policy to a matter of finding the balance between "public" and "private" principles in determining economic outcomes -- the "government" vs. "individual" polarity that sets the (constricting) limits of mainstream political discourse.

On November 12 and 13, 1998, at the New School for Social Research in New York City, a conference was held in honor of Robert L. Heilbroner, Professor Emeritus at the New School's Graduate Faculty and well-known heterodox writer in economic policy and the history of economic thought (and occasional S&S contributor). The plenary session of the conference heard from several top figures in economics: Paul Samuelson, Charles P. Kindleberger, John Kenneth Galbraith, and, of course, Heilbroner himself. Inspiration for the present essay comes from the remarks on that occasion of Galbraith, another leading heterodox thinker, who presented his own version of the "mixed economy." In his version, however, the United States sports a mix of not two but three sectors: a public sector, as usually conceived; a private market-competitive sector; and a private, non-market corporate-bureaucratic sector.

Galbraith spent some time elaborating on the interrelations among these sectors. What is important for present purposes is the enormously liberating quality of this intervention: it frees thinking about economic reality from the one-dimensional straitjacket of "public vs. private," and opens up whole ranges of possibilities. In what follows, I will sketch an expanded version. (Hey, you want a mixed economy? We'll give you a mixed economy!)

The core idea is to look at the capitalist economy as being "mixed," but along not one but two dimensions. These are what I will call "sectors" and "principles."

The sectors are: dominant capitalist; autonomous; precap-italist remnant; and postcapitalist harbinger. The names of these are essentially self-explanatory, but examples and illustrations will be provided shortly. The first, dominant capitalist, corresponds to what classical Marxist theory calls the "mode of production"; in combination with the others, we have the "socioeconomic formation," in which the mode of production is embedded in a more concrete set of particular and historical determinations. The pre- and postcapitalist sectors clearly belong to that wider sphere. Elements of the autonomous sector, however, are central to the capitalist process and should be considered as part of the capitalist mode of production.

Cross-cutting the distinction among sectors is that among principles, of which there are (in this version of the proposal; the elements in the scheme may of course change) three: private/organized; private/spontaneous; and state, or government. ("Public" is an irretrievably ambiguous term, which I will avoid.) Again, one may consider the private/organized principle to be the essential locus of capitalist relations of production, but this would be an error: the spontaneous principle is also crucial, as the basis of the valorization of social relations, a structural and ideological necessity for capitalist class reproduction. The state, in turn, has always been an inherent component of capitalist accumulation, with legitimating, facilitating and coercive functions.

To see how the cross-cut between sectors and principles works, we examine the 16 spaces, or sites, created by their intersection. I present this construction in the form of a table (Table 1), which, while schematic, enables us to "nail down" the results.

Looking first at the dominant capitalist sector, we examine the three principles. The private/organized principle gives us the corporate workplace -- clearly of central importance in the advanced capitalist economy, and what Galbraith has in mind when he refers to his "non-market bureaucratic sector." It is important to emphasize that a large part of economic activity takes place here, on the basis of extensive planning, information and control networks -- a system that is "political" in a non-governmental sense, involving intentional, rule-governed interactions rather than "parametric" responses to market signals. Note that, as Galbraith has often pointed out, planning is the main allocative mechanism in these increasingly huge sites, despite the article of faith that planning is impossible at the level of the economy as a whole (see our special issue, "Building Socialism Theoretically," Spring 2002).

The private/organized principle in the dominant capitalist sector is supplemented by the private/spontaneous one -- markets are, after all, important. Here we find the categories of markets familiar from macroeconomic theory: goods markets, labor markets, and asset (or financial) markets. ("Labor" markets are actually labor-power markets, of course, but we know that.)

The government principle completes our portrait of the dominant capitalist sector: here we have the major organs of state power, including the vast and largely unaccountable bureaucracy beholden (instrumentally, structurally, and objectively) to the capitalist ruling class and the capitalist process. The "invisible government" is found here: National Security Council, the subterranean intelligence network, blue-ribbon think tanks, unofficial funding networks, etc.

The autonomous sector, like the dominant capitalist one, is broken down by the three principles: organized, spontaneous, government. Autonomous/organized is the locus of small business, the "petty bourgeoisie" of classical Marxist discourse. Little needs to be said about this, except perhaps that like other elements in the mix it plays a role in political and ideological reproduction; we hope not merely to describe what is "there," but also to show how the various elements form a system, involving both functionality and contradiction.

The autonomous/spontaneous site contains important elements: the informal (or "second") economy, independent professionals (who, along with small business, feed into the imprecise category "middle class"). But most importantly, it also holds the working-class household sector. Here is where the specific analysis of household reality and activity enters the story. The household embodies both the illusion and (partial) reality of the worker as independent purveyor of the commodity labor-power. It is the site of the specific impact of capitalism on the household, and especially on women, and therefore the starting point for Marxist-feminist analysis of the position of women in capitalist society. Capitalism has an ambivalent attitude toward the household: both defending an ideologically constricting version that is extremely privatistic and oppressive toward women, and simultaneously succumbing to a tendency to cannibalize it, by developing commercial products and services that replace some of its traditional activities.

Finally, tracing the autonomous sector down to its government-principle component, we have local government, mainstream political activism, hearings of boards of estimate and boards of education, major political party organization -- in short, the autonomous but non-insurgent political activity that reinforces the myth-cum-reality of pluralism and capitalist domination through pluralism.

The precapitalist remnant and postcapitalist harbinger sectors can be described more quickly. For the former, the private/organized principle covers various forms of precapitalist coercion: chattel slavery, feudal peonage, company towns (with their quasi-governmental authoritarian controls); these are important mainly in the early history of capitalist accumulation in the Western Hemisphere. Of greater and possibly increasing importance today, this cell contains servitude of undocumented workers, illegal immigrant contract work, sweatshops, and so forth. The private/spontaneous component of the precapitalist sector appears to be the null, or empty, set, unless one thinks of Amish farming communities or hippie communes as belonging here.

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