Socialism is back on the political agenda in the United States. For the first time in a century, an avowed socialist, Bernie Sanders, was a viable presidential candidate, and another, Alexandria Ocasio-Cortez, is a popular congressional freshman. These politicians and many others now advocate policies commonly viewed as socialist: single-payer universal health care, the Green New Deal, federally financed preschool and tertiary education, and large infrastructural investment, to name a few.

There is, however, little discussion of what was a central topic in earlier socialist movements: the nature of property rights in firms. The Democratic Socialists of America (DSA) devote a paragraph to property relations on their webpage, but this topic has little popular salience.¹ Because American socialist politicians say little or nothing about property relations, the implicit assumption must be that their conception of socialism is social democracy: an economic system with capitalist property relations, but with significant taxation to finance the investments that comprise their policy proposals. In popular parlance, the closest reference to a change in property relations in firms is the discussion about stakeholder representation on corporate boards. Such representation, referred to in the DSA manifesto, would dilute the power of owners, the holders of firm equity, and could be a significant reform.

Every socioeconomic formation, I propose, has a foundation consisting of three pillars: a set of property relations and institutions that organize the allocation of resources, a distributive ethic that specifies the allocation of income and resources considered fair or just, and a behavioral ethos that specifies how economic actors are expected to make decisions. These pillars are linked: if economic actors behave according to the stipulated ethos, then the property relations should implement the distributive ethic. The behavioral ethos of capitalism is individualism: each actor is conceived as being in competition with all other actors, and the actions of all are constrained by nature. This ethos may be summarized as “going it alone.” The key institutions are private property ownership, contracts, and markets. The distributive ethic is “from each according to his endowments of talents and wealth, to each what he can get.” Law sets the rules — what Karl Marx called the superstructure. Katharina Pistor’s 2019 book, The Code of Capital: How the Law Creates Wealth and Inequality, explains how law under capitalism creates the conditions for capital accumulation.²