Investment planning in market socialism (original) (raw)
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Radical Philosophy, 1985
Beyond the Market? comments on Boris Frankel The editors have asked me to comment on Frankel's Beyond the State?, since Frankel devotes several pages to a criticism of the sort of arguments which I advanced in my Economics of Feasible Socialism and in some other works. The key issue is evidently the relationship between socialism and the market mechanism. Frankel also criticises the ideas of many other thinkers, and-challenges some aspects of Marxist orthodoxy. Let me say at once that I found his work refreshing, vigorous and honest. Agreements He devotes much space to a CrItIcIsm of received ideas about the state, and he is right to do so. Its role in modern societies, in East and West alike, is very different indeed from the 'orthodox' models, both of Marx and of the 'ideal-type images of capitalism' of 'Chicago' laissez-faire. The traditional distinctions between the state and 'civil society', between base and superstructure, are in urgent need of drastic amendment. Frankel rightly focuses on many confusions: should (for instance) a movement such as Poland's 'Solidarity' be demanding freedom of social institutions from the state, or control by society over the state? What role should the state, and state planning, play in models of socialism which stress the autonomy of selfmanaged productive units? Perhaps, as he claims, 'stateless socialism will probably only guarantee unfreedom and inequality.' What, within any sort of class analysis, should be the status of state employees, which in more developed countries constitute a sizeable percentage of the total workforce? Evidently, such categories as 'exploitation' and 'surplus' value do not relate to them. A large part of our economy no longer fits into the Marxist division of it into 'Departments I and II'. These and some other 'sacred cows of Marxian orthodoxy' must be abandoned, argues the author. It is not my intention to enter more deeply into discussion of these matters, only to stress that Frankel is fully justified in raising these issues, and does so in ways which stimulate and inform. Who is 'productive'? This reader was, however, worried about his retention of one element of the dogmatic tradition: the treatment of 'unproductive' (or non-surplus-generating) labour. The problem here is not one of the typical employee in the public sector: obviously, a hospital nurse, probation officer, city architect, street sweeper, tax inspector, do not generate surplus value in any sense of the word, and their incomes evidently arise out of taxation. Marx, as is known, treated
Market socialism: a historical view and a retrospective assessment
1992
The present study was started when it seemed that some kind of market socialist option was still on the agenda as a way out of the crisis of what used to be called the Soviet-type economies. Now that the previously socialist countries of Central-Eastern Europe have decidedly embarked on the transformation of their economic institutions into some variety of a mixed economy of the Western type it might seem rather uninteresting to be concerned with the market socialist model.
Market Socialism: A Case for Rejuvenation
Journal of Economic Perspectives, 1992
is unfortunate that the momentous events in socialist countries since 1989 have persuaded many that socialism as a political, economic, and intellectual movement is now to be dismissed as bankrupt and practically moribund. The economic experiment that has clearly failed was characterized by three features: (1) public or state ownership of the means of production; (2) non-competitive, non-democratic politics; and (3) command/administrative allocation of resources and commodities. In this paper, we will outline a feasible economic mechanism of "competitive socialism" in which (2) and (3) are negated-there would be competitive politics and competitive allocation of most commodities and resources-but in a major part of the economy we do not replace state or public ownership of the principal means of production with traditional private ownership. Public ownership in the narrow sense of state control of firms is not necessary to achieve one of socialism's goals, a relatively egalitarian distribution of the economy's surplus. We take public ownership, in a wider sense, to mean that the distribution of the profits of firms is decided by the political democratic process-yet the control of firms might well be in the hands of agents who do not represent the state. What the Eastern European experience has shown is that a system of pervasive state control of firms, plus the absence of markets, does not work. Our claim is that competitive markets are necessary to achieve an efficient and vigorous economy, but that full-scale private ownership is not necessary for the successful operation of competition and markets. Contrary to popular impression, this claim has not yet been disproved by either history or
2022
What role should money play in a socialist society? Whether socialism is defined as an end in itself or as a transitional phase toward communism, it is essential to determine the role and dangers of utilizing money within this society. Lapavitsas (1998) argues that the question of money entails the role of markets as well, considering how money, according to Marx, is an emergent phenomenon of commodity exchange (Lapavitsas, 2017B). Lapavitsas (1998; 2003) posits that there are two broad possibilities for socialism. The first is a completely planned economy, in which money and markets have no part in the fundamental reproduction of society and may no longer exist at all. This, however, runs into the problem of calculation: it would be extremely difficult, if not impossible, to gather all the information necessary on the technical details for the production of millions of products and to then solve the resulting simultaneous equations. Lapavitsas (1998) points this out when discussing labor money in particular, or seeing the value of every commodity in terms of labor hours, but any standard would present the same problem. Even if these issues were solved somehow, that leaves two additional issues: first, that the surveillance technology necessary to gather this information has inherent risks in its use; and second, this leaves aside the problem of how to control and compel labor, as labor money or other tokens cannot do it alone (Bernes, 2020). The alternative is a market socialist economy, which would use some of the mechanisms within capitalism in a limited fashion in order to get around some of these difficulties inherent in a fully planned economy. This economy would entail a market sector consisting of worker-managed and owned firms, with production and distribution coordinated by market forces, and a planned sector that sells certain basic goods, like food, and provides other goods and services based on need, like healthcare and education. The calculations necessary to operate this planned sector would be more feasible considering its orientation toward essential goods. A market sector would allow for efficiency gains in production while the planned sector makes sure people’s basic needs are easily accessible. People would have to get a job to earn an income, but a strong welfare system would prevent poverty and homelessness. Money and markets would play a restricted role in this system, which would be made possible through the abolition of exploitation. For Lapavitsas (2003), this means eliminating the exclusive property rights held by capitalists over the means of production and final output; in other words, the capitalist class must be abolished. This abolition of capitalist class relations would also allow for the democratic control of markets and money, allowing them to act as coordinating mechanisms without dominating society. There are two major problems with this approach to market socialism. First, it is a mistake to locate capitalist class relations as the fundamental driver of exploitation and the subordination of society to markets; class relations contribute to the reproduction of capitalism, but it is widespread market dependence that leads to both class differentiation and the subjugation of human social relations to the market and money. Second, this proposal does not fully engage with its logical implications: if this system has a labor market and competition between firms on the market – i.e. market dependence – then it is still subject to the imperatives of value production. This implies that it will be subject to dynamics that either pull it back into capitalist social relations with the expansion of market dependence, class differentiation, and private accumulation, or result in crisis if the system is made unable to make this backward transition.
A MORE CRITICAL LOOK AT MARKET SOCIALISM
The capacity of any society to produce is finite. So too, is the demand for any one particular good. Some goods, eg water in a rainy country, can be produced to satisfy our needs with a minimal expenditure of labor. But by definition these goods account for only a small part of the value of a nation's output. The more valuable part is hard won by labor, our ultimate scarce resource. Technology may reduce the labor required for some things, or even abolish whole branches of the division of labor.