Market Socialism and Value-Form: “The Impossible Socialism” Revisited

The conceptual coherence of market socialism is examined through engagement with Maxi Nieto’s claim that it represents an “impossible” form of socialism. While proponents argue that market socialism—through its retention of the allocative function of markets—preserves the efficiency of markets while eliminating capitalist exploitation, critics like Nieto assert that markets and capital are inseparable, with the latter perpetuating domination, inefficiency, and inequality. Building on Nieto’s thesis, this article advances a functionalist critique, arguing that even under “worker self-managed” models like David Schweickart’s Economic Democracy, competitive markets inevitably lead to the subsumption of labor under capital. On a functionalist interpretation of capitalist relations of production, labor can be subsumed to capital even through mere exchange. Analyzing the form of capitalist value shows that that surplus-labor extraction—and hence exploitation—can persist independently of formal ownership arrangements. The persistence of the law of value indicates that market socialism remains governed by capitalist social relations, which calls into question its compatibility with socialist commitments to equality, sustainability, and human development.