MARKET SOCIALISM

Can market socialism realize the socialist vision of the good society by ending exploitation and alienation, substantially reducing inequali ties of wealth and income, ensuring full employment, and correcting ot her market irrationalities? A comparative analysis of the organization al forms of capitalism (notably the small owner-operated firm and the large corporation) and market socialism (the self-managed cooperative that rents its capital from the state) reveals the relative efficienci es of capitalism in reducing transaction costs, in turn reducing the o pportunities for exploitation. By contrast, the transaction cost ineff iciencies of the organizations of market socialism permit and encourag e forms of exploitation that are precluded or discouraged under capita lism.