A Design for Market Socialism

John Roemer

No 2090, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: Socialism is conceptualized as a society in which individuals cooperate, distinguished from capitalism, characterized as involving ubiquitous economic competition. Here, I embed a formal model of cooperation in an Arrow-Debreu model, using the Kantian optimization protocol, and define a Walras-Kant equilibrium, in which firms maximize profits, consumers choose demands for commodities in the usual utilitymaximizing fashion, and the state rents capital to firms. The labor-supply decision of workers, however, is arrived at using the cooperative protocol. Incomes are redistributed through a flat income tax. Walras-Kant equilibria, with any desired degree of income equality exist, are decentralizable, and are Pareto efficient.

Keywords: Market socialism; General equilibrium; First welfare theorem; Cooperation; Kantian optimization (search for similar items in EconPapers)
JEL-codes: D50 D59 D6 P2 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2017-06
New Economics Papers: this item is included in nep-hme and nep-pke
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