CFDP 2090

A Design for Market Socialism

Author(s): 

Publication Date: June 2017

Pages: 26

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

JEL Classification Codes: D50, D59, D6, P2

JEL Classification Codes: D50D59