The socialization of capitalism or the neoliberalization of socialism?

What does a socialist at heart do when he has become disillusioned with the experience of socialism in the East and flabbergasted with the extraordinary resilience and spreading out of capitalism everywhere? When he knows, deep down, that capitalism has become ‘part of the natural order of things’ and that a wholesome transformation of the social bases of production is unlikely, if not impossible? Well, he becomes a ‘realist’. That is, he will start looking for ‘socialism’ in the nooks and cracks of the capitalist economic machine as it currently works, in the small and large compromises wrought by classes eager to appease their inbuilt conflicts, in every workable or working step that might improve institutions in the direction of social justice and human emancipation. Mind you, this socialism is very different from the dramatic reorganization of social relations envisioned by Marx and Engels—indeed what Erik Wright calls the ‘ruptural’ path to socialist transformation is only one, and certainly the most unlikely, of three distinct possibilities (the word ‘communism’ barely appears in the book, and Marx’s theory of capitalism’s future is deemed ‘inadequate’). To the purist, this diluting of socialism into a range of options going all the way from Wikipedia