Socialism within capitalism?

To look over the landscape of socialism is to be persuaded that again and again that Marx was the socialist thinker who had something enduring to say, non-Marxist socialism is fated to merge into liberalism, and if we were looking to political guidance Leonard Hobhouse probably more offers more than the Webbs. What remains from Marx is historical materialism. Via Norman Geras a paper by Robert Paul Wolff considers the future of socialism. Wolff argues that Marx failed to predict the extent to which capitalist enterprises would develop techniques of planning that would overcome the irrationalities of the market. he concludes

If socialism is the substitution of rational planning for the anarchy of the market it is already upon us. If socialism is the achievement, at long last, of justice and equality, it is a dream that has been aborted in the womb of the old order.

In part I made a similar argument in my paper from 2009 on American liberalism and capitalism (currently being slowly rewritten for publication). I argued that Marxists had been correct to identify the dependence of capitalist enterprise on state power to preserve property rights but had failed to consider that capitalists themselves could take on the responsibilities of the state. An example wold be the rise of oligopolistic competition so that enterprises developed norms of cooperation (that did not require state enforcement) that prevented ruinous competition. Naomi Lamoreaux’s analysis of the 1895-1904 American merger wave supports this argument. Wolff’s argument can be compared to Martin Sklar:

The large business corporation itself…has constituted an embodiment of the capitalism-socialism mix. It is a major mistake–and ahistorically static–to think of corporations, or business in general, as necessarily simply capitalist in essential characteristics. The same may be said of trade unions, agricultural cooperatives, credit unions, pension funds, and countless other associations, institutions, and social movements in modern U.S. society: They each and all may embody the capitalism socialism mix in their operations, goals, principles, and values. Another way of putting this is that with the growing importance of socialist relations in modern society, democratic politics (including the broad range of associational activity) oriented strongly toward egalitarianism, social goals, and public functions, become more and more integral to the workings of the economic system per se, and economic theory that ignores this civic and political dimension in the modern economy will be found considerably wanting.

If for Wolff the presence of socialism within capitalism amounted to the triumph of capitalism for Sklar it was the reverse. His The Corporate Reconstruction of American Capitalism retained elements of an instrumentalist view of the state but mostly focused on the extent to which the consolidation of corporate capitalism in this period represented the triumph of a social movement, which linked entrepreneurs, financers, politicians and intellectuals in a particular historical project. Yet having formulated this proposition Sklar failed to extend this insight into an analysis of the internal operations of large-scale corporations.  If the survival of capitalism was due to its ability incorporate elements of socialism then this balance changed substantially over time. Sklar’s own interpretation of 1990s American capitalism jumbled up state regulation and corporate organisation, in large part repeating 1950s revisionist assertions of the decline of capitalism and the inevitability of the ‘mixed economy’ . This underpinned his own drift towards neo-conservatism via Social Democrats USA.

What guidance might Marx’s own work offer for avoiding these both roads?

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