Is Decommodification Socialism?

In a piece that was mostly about something else, Freddie deBoer had this to say about socialism, the welfare state, and decommodification:

Since I am a grumpy old man, I will not relent in saying that anything that calls itself socialism must, as the end of the day, point towards decommodification. That is, what separates actual socialism from various flavors of redistributive liberalism is that under socialism eventually you end up in a situation where human goods like housing or medicine are moved out of the market mechanism altogether, not simply paid for by the government. The government paying for houses for homeless people and medicine for uninsured people is good, but neither is socialism. Medicare for All is a great goal that I happen to think is also good politics, but it is not and has never been socialist. It’s just welfare state capitalism. Which is fine. It’s better than now so I’m for it. The socialist alternative is that money no longer determines the provisioning of medical care, whoever is paying it; that you don’t hear about this from the kids much these days shows the degree to which liberal assumptions have colonized socialist thought.

Here’s a good recent example. Your old school liberal pundit and your old school socialist agitator could never have agreed on Biden’s child tax credit. Mickey Kaus would have called it welfare, and predictably does. A grouchy old Marxist would have called it pity charity capitalism, and predictably they do. (I don’t have a link to that one because my source is people getting mad at me on Facebook.) But while your average 22-year-old DSA member lives to dunk on Ezra Klein, and I’m guessing Ezra Klein doesn’t have much love for that DSA member, they have actually found peace in both liking a government program that gives money to families with children.

I want to raise two points in response to this.

First, one of the biggest mistakes a certain kind of socialist makes is thinking that the welfare state is meant to be an alternative to socialism or somehow in conflict with socialism. I think this completely misunderstands both socialism and the welfare state.

Socialism is concerned with how production is organized in society. Specifically, it’s about who owns and controls the productive enterprises in a society. Capitalist enterprises are owned and controlled by private investors while socialist enterprises are owned and controlled by workers or the society more generally.

The welfare state is concerned with how output is distributed in society, with the primary (though not exclusive) focus being about how to get income (or consumption) to nonworkers such as children, elderly people, disabled people, students, the unemployed, and family caregivers.

Socialism and the welfare state are not in competition with one another. They are orthogonal to one another and they address different questions and problems. You can have capitalism with and without a welfare state just as you can have socialism with and without a welfare state.

Socialism without a welfare state would have enormous levels of inequality and poverty because any society that lacks institutions for getting income (or consumption) to the half of the population that does not work cannot keep inequality low. In practice, of course, socialist countries typically have large welfare states because egalitarian principles push towards both collective ownership of the means of production and old-age pensions, disability benefits, and child allowances (the USSR had all three of these benefits, among others).

Second, decommodification is a welfare state topic, not a socialism topic. I will tread more hesitantly here because Freddie only mentions decommodification briefly and so I am not entirely sure what he means by it. But it appears that Freddie is using the word to mean in-kind welfare benefits, which is also how a lot of leftist people use the word, though many don’t seem to realize that there is another name for it. In-kind welfare benefits are when the government gives you something like health care, education, or child care, which is contrasted with cash welfare benefits, which is when the government gives you money to spend as with a child allowance.

Occasionally, you’ll find some leftists who try to hinge a lot of analysis on the idea of in-kind welfare benefits (decommodification) being real leftism while cash welfare benefits are a kind of neoliberalism. A common justification for this claim mirrors language that Freddie uses: in-kind welfare benefits, unlike cash benefits, move this or that out of the market.

I think this particular argument is really weak for three reasons:

  1. Whether something is “in” or “out” of the market has nothing to do with socialism as socialism is about ownership and control of production, not about whether money and prices are used to help coordinate the distribution of output. All socialist regimes have used money and prices for various things (including the USSR).

  2. In-kind welfare benefits don’t really remove things from “the market.” Consider the case of public school. The way public school works is that the government goes into the labor market and product market and then buys all the labor and materials it needs to run schools. Those schools produce educational services that are then provided to students without a fee being charged. It’s all markets all the way down until the very end when a tax-funded subsidy is used to bring the consumer fee to $0. This is true of almost everything that is presented as decommodification.

  3. Fights over in-kind welfare benefits versus cash benefits are interesting only if you engage in them at a certain level of abstraction. In practice, welfare states across the world provide both cash and in-kind welfare benefits and most benefits can only really be delivered as one or the other. Child allowances, old-age pensions, disability benefits, unemployment benefits, and caregiver allowances (like paid leave) are provided as cash. Meanwhile, education, health care, child care, and social care for the disabled are provided in kind. So rarely do you ever have a question of whether something should be cash or in-kind. It’s just a question of whether to have a benefit or not.

Ultimately, I don’t actually disagree with the point Freddie is making here, which is that child allowances are not about socialism but about the welfare state. But I think the way he gets to that conclusion is a bit off.