This paper replies to Peter Saunders' critique of my ‘New ideas of socialism’ and takes the debate further by clarifying my advocacy of ‘associational socialism’ and making a more general critique of neo-liberalism. The combination of decentralization and co-operative co-ordination envisaged in the idea of associationalism’ is defended and clarified. It is argued that repression is not necessarily inherent in socialist ends. Libertarians are seen to be poor liberals with a limited and unambitious concept of freedom which focuses on the dangers of state power but glosses over economic and social threats to liberty. It is argued that socialism should be about balancing liberal and socialist principles rather than opting for one side over the other.