Noam Chomsky is America’s leading advocate of libertarian socialism, though his political and economic thought draws on diverse traditions and the thinking of intellectuals such as Wilhelm von Humboldt, Mikhail Bakunin, John Dewey, Bertrand Russell, and Rudolf Rocker. Chomsky’s conception of “socialism” is anarcho-syndicalism, a system where production and production institutions would be worker-owned, democratically self-managed enterprises. Other notable syndicalists were Rudolf Rocker and the young Bertrand Russell. Syndicalism has been a major non-Marxist socialist tradition. Chomsky gives his views on the meaning of socialism in the video below.
I would argue, however, that either (1) radical progressive liberalism or (2) social democracy of the Scandinavian type has just as legitimate a claim to the name “democratic socialism.” Of course, one of the severe failings of progressive liberalism and social democracy is the inability to free themselves from neoclassical economics and the power of the private capitalist institutions. When Chomsky quotes John Dewey and complains that “politics is the shadow cast on society by big business,” he is no doubt right. The excesses of modern multinational corporations and big business are an outrage on many levels.
But, while worker-run enterprises might very well provide a superior form of business organisation, it seems to me that in some respects they would still face much the same problems as private capitalists: if the decision-making done in a worker-managed enterprise/cooperative is done by its workers, and there are thousands or hundreds of thousands of such cooperatives making de-centralized decision-making on production (even if this involves a democratic process involving many people in each individual enterprise), then you would have decisions on investment and production made in a decentralised manner that is essentially private. If the economy uses money and has some types of financial assets as a store of value, you have exactly the same problems that exist now. The people involved would still be making decisions under subjective expectations and fundamental uncertainty, and investment would, most probably, be subject to fluctuation. Say’s law would not hold in a syndicalist economy. In such an economy, there would still be failures of aggregate demand, and some democratically-accountable institution would be required to intervene at the macro-level to overcome such macro-problems. That institution would, I contend, end up being a de facto government, and would probably also accrue other responsibilities such as implementing democratic decisions on foreign policy, defence, monetary policy, science policy, education standards, and so on. I suspect that a syndicalist society would evolve into a state-based system not that much different from the most radical forms of progressive liberalism or social democracy.