I. INTRODUCTION

1. Socialism as a concept has its roots in the eighteenth century Enlightenment’s ideals of equality and co—operation, whereas the term itself was coined during the 1820’s. Throughout most of its history and certainly throughout the nineteenth and early twentieth century, from Karl Marx and Frederic Engels to the Fabians, the concept has been held to be synonymous with corporate planning in the context of common ownership of the means of production. As such, the essence of the concept has traditionally been based on a critique of capitalism as an exploitative class system and has correspondingly been hostile to both markets and private ownership (Hodgson, 1999b, ch.2).

2. Market socialism as a concept has a shorter history: its origins can be traced back to the calculation debate of the 1920’s and 1930’s. However, the basic idea associated with itto marry socialism with markets—is contemporaneous with the invention of the term ‘socialism’. Thus from Pierre Proudhon’s free association of small independent producers what Marx called ‘petty bourgeois socialism’ to John Stuart Mill’s sympathy with decentralised co—operative socialism, the idea has been to combine the efficiency of markets with the egalitarian goals of socialism. Having said this, it is also true that the idea of combining socialism with the market would be considered a contradiction in terms by most nineteenth century socialists (ibid).

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