Here’s the thing: there are many different forms of market socialism. I am actually a proponent of one form, which I call a Level 7 political economy (you might call it “market-friendly libertarian socialism”). However, I am critical of some other forms, so I will focus on one of those and describe how my proposals seek to remedy its problems.
Proudhon’s mutualism is probably the most widely-considered version of market socialism - at least when differentiated from authoritarian, State-centric Marxist-Leninist proposals. I actually agree with several components of Proudhon’s reasoning (for example, his arguments regarding property), but differ in a few important areas. One of these is the Labor Theory of Value. The LTV attempts to rigidly constrain the value of a good or service to the labor required to produce it - and then restrict the exchange to other goods and services with equivalent labor inputs. We can quickly see the problem with such a system with respect to the realities of subjective valuation - how people actually value things in a social context. You can also read about additional criticisms here: Criticisms of the labour theory of value - Wikipedia.
My answer to this problem is to create a different system of valuation that is non-capitalist, but still encourages friendly competition for some (but not necessarily all) goods and services. I call my approach to property exchange value “holistic valuation,” and it includes a host of factors - intersubjective use value, effective nourishment value, accounting for negative externalities, etc. - that redefine scarcity as “scarce quality” or “scarce safety,” and advocate consideration of perverse utility that potentiates harm. These concepts are discussed in more detail at this link: Level 7 Property Position, and in the book from which that excerpt was taken (also linked at the top of the Property Position page). Such property then can be part of an exchange economy that includes both limited for-profit and non-profit businesses that are owned and managed by workers and members - with input from the surrounding community. My goal is to include as many democratic controls as possible over larger free enterprise and the markets themselves.
With respect to various forms of market socialism, there are also other questions regarding resource valuation and management, how currency is backed, and how essential infrastructure and services are provisioned. My approach to these also departs from other proposals as well, as I advocate a Social Credits System tied to a Universal Social Backbone, to avoid the moral hazards of a social dividend or basic income. In addition, I believe it is critical to address the issue of economic growth - both as a functional dependency and as an unsustainable trajectory - which is why I also advocate Sustainable Design principles, proof-of-concept piloting, the precautionary principle, etc. Again you can explore these concepts by perusing the Level-7 website links.
My 2 cents.
From Quora post: https://www.quora.com/What-are-the-criticisms-against-market-socialism/answer/T-Collins-Logan
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