Can socialism / communism be economically successful?

[punisa]

I was just thinking about this. Can socialist economy be so well organized and theoretically compete against a market based economy?

The "profit" a capitalist country makes is massively supported by the lack of support for its people. Socialism needs health care, education and other institutions to be free.

But if we look at this strictly from economical standpoint, how well can a planned economy do when comparing to a capitalist nation?

Indeed this image made me think:
http://upload.wikimedia.org/wikipedia/commons/b/b3/Prc1952-2005gdp.gif

[spaßmaschine]

Well given that under communism production will be for the purposes of meeting human needs rather than the production of commodities for exchange, notions of Gross Domestic Product and what not would become quite meaningless. GDP is a measure of the market value of all goods produced within a nation, but communism involves the abolition of markets, value, nations and so on, so a comparison cannot be made. No, communism won't be able to beat capitalism at its own game, if that's what you're asking, but neither will it be playing that game, so there's no point making the comparison. A society in which commodity production occurs is a capitalist society. This includes the example of China you used above.

[manic expression]

You bring up a very important issue, comrade. GDP is oftentimes completely irrelevant when it comes to the lives of workers; Mexico's experienced "economic growth" since the implementation of NAFTA, but as we can see here, the poverty rate in Mexico actually rose from 1994 (when NAFTA was introduced) to 1996:

http://globalgeopolitics.net/wordpress/2009/05/23/economy-mexico-crisis-drives-up-poverty-rate/

Further, as we can see here, even in times of "improvement" for Mexico's poor, very little actually changed in terms of on-the-ground realities:

http://www.globalpolicy.org/component/content/article/211/45123.html

So, essentially, the GDP of capitalist countries indicates primarily the prosperity of the bourgeoisie and petty-bourgeoisie, and to a far lesser extent limited layers of the working class (usually won through union victories, or else imperialist concessions). Remember that during the 90's economic boom in the US, real wages for the majority of workers saw virtually no improvement:

The picture is worse for workers who had no college degree. That’s more than 100 million workers, or 72.1 percent of the workforce. For them there was no boom of 1995-2000 whatsoever. Their average real hourly wages were less at the end of 2000 than they were in 1979. And since 2000 their wages have continued to slide further.

http://ilwu.nisgroup.com/dispatcher/2004/04/rich-get-richer.cfm?renderforprint=1

Back to the example of Mexico, to compare, here's a chart that cites both the GDP rates of Cuba and Mexico from 1958 to 2000:

http://www.lanuevacuba.com/archivo/bert-corzo-1eng.htm

So Mexico's GDP growth outpaced Cuba's about 9 fold. However, even the laziest research on homelessness, public health, housing accessibility, education, women's rights, working conditions and more will undoubtedly show that Cuba is far better for workers than Mexico is. It's not even close. In 2006, Cuba's infant mortality rate was 5.3 (per 1,000 live births); Mexico's was 20.26 (source below). We could go further, but this illustrates the point sufficiently.

Cuba's rate:
http://www.dominicantoday.com/dr/this-and-that/2007/1/4/21172/Cubasinfant-mortality-rate-is-lowest-in-Latin-America

For Mexico's rate (as well as a slightly underestimated Cuban rate, which isn't surprising considering this comes from the CIA):
http://latinostories.com/Latin_America_Resources/Latin_American_Infant_Mortality_Rates.htm
(oh, look at that, not even the CIA can deny the superiority of socialism, isn't that funny)

Also, look at this chart on energy production in the USSR and former USSR. Notice the deep and sustained drop that happens just as capitalism gets introduced:

http://www.wou.edu/las/physci/GS361/electricity%20generation/charts/consumption_line_graph3.gif

[eyedrop]

I'll just copy this excellent post by Demogorgon.


The Soviet Union did not have worker self management.

Anyway US Department of Health Education and Welfare (1973 p112):
"in no instance of which we have evidence has a major effort to increase employee participation resulted in a long-term decline in productivity”

Jones and Svejnar (1982 p11):
“there is apparently consistent support for the view that worker participation in management causes higher productivity. This result is supported by a variety of methodological approaches, using diverse data and for disparate time periods.

Levine and Tyson (1990, pp205-14)
“participation usually leads to small, short-run improvements in performance, and sometimes leads to significant long lasting improvements… There is almost never a negative effect.”

It is important to note that worker self management has difficulty existing under capitalism as capitalists don't like it and take steps to prevent it. However in those areas where due to one anomaly or another it has been allowed to thrive (the Emillia-Romagna region in Italy for instance) it has been so successful that traditional capitalist firms have been pretty much unable to compete and it makes up the main part of the economy (it is one of the richest areas in Italy-and indeed Europe).

Link (http://www.revleft.com/vb/showpost.php?p=1556791&postcount=40)

[punisa]

Well given that under communism production will be for the purposes of meeting human needs rather than the production of commodities for exchange, notions of Gross Domestic Product and what not would become quite meaningless. GDP is a measure of the market value of all goods produced within a nation, but communism involves the abolition of markets, value, nations and so on, so a comparison cannot be made. No, communism won't be able to beat capitalism at its own game, if that's what you're asking, but neither will it be playing that game, so there's no point making the comparison. A society in which commodity production occurs is a capitalist society. This includes the example of China you used above.

I agree. Perhaps communism is not very relevant for this discussion. But how about socialism? At least in its starting form? For example Venezuela.
If such country could actually be successfully in playing the game that is globally played (in this case, it does), would that made the transition "easier"?

I also point out to the NEP program of USSR (FROM http://en.wikipedia.org/wiki/History_of_Soviet_Russia_and_the_Soviet_Union_(191 7%E2%80%931927) (http://en.wikipedia.org/wiki/History_of_Soviet_Russia_and_the_Soviet_Union_%281 917%E2%80%931927%29)
"The Soviet NEP (1921-29) was essentially a period of "market socialism" similar to the Dengist reforms in Communist China after 1978 (http://en.wikipedia.org/wiki/1978) in that both foresaw a role for private entrepreneurs and limited markets based on trade and pricing rather than fully centralized planning. As an interesting aside, during the first meeting in the early 1980s (http://en.wikipedia.org/wiki/1980s) between Deng Xiaoping (http://en.wikipedia.org/wiki/Deng_Xiaoping) and Armand Hammer (http://en.wikipedia.org/wiki/Armand_Hammer), a U.S. (http://en.wikipedia.org/wiki/United_States) industrialist and prominent investor in Lenin's Soviet Union, Deng pressed Hammer for as much information on the NEP as possible.

During the NEP period, agricultural yields not only recovered to the levels attained before the Bolshevik Revolution, but greatly improved. The break-up of the quasi-feudal landed estates of the Tsarist-era countryside gave peasants their greatest incentives ever to maximize production. Now able to sell their surpluses on the open market, peasant spending gave a boost to the manufacturing sectors in the urban areas. As a result of the NEP, and the breakup of the landed estates while the Communist Party was consolidating power between 1917 (http://en.wikipedia.org/wiki/1917)-1921 (http://en.wikipedia.org/wiki/1921), the Soviet Union became the world's greatest producer of grain.

Agriculture, however, would recover from civil war more rapidly than heavy industry. Factories, badly damaged by civil war and capital depreciation, were far less productive. In addition, the organization of enterprises into trusts or syndicates representing one particular sector of the economy would contribute to imbalances between supply and demand associated with monopolies.

Due to the lack of incentives brought by market competition, and with little or no state controls on their internal policies, trusts were likely to sell their products at higher prices.
"

These plans were quickly closed down when Stalin took charge. Why was Lenin led into believing that certain degrees of market economy would be good for USSR?
I also have a feeling, nothing more, that Cuba could possibly be the next state will somewhat introduce certain elements of market economy.

[Die Neue Zeit]

Agricultural yields may have improved under NEP, but as you quoted, industrial output was a joke until the Stalin era (read up on the Scissors Crisis).

The graph regarding China actually shows the superiority of central planning in industry, since China's growth rates are 8-10% only.

Compare this to consistent double-digit Soviet growth from the First Five-Year Plan until the late 1950s. The slowdown in growth later on can be attributed (to some extent) to the shift in consumer production and not "production of the means of production" (including infrastructure). Just look at the deficit in capital spending in today's oil-and-gas Russian economy, much of whose "means of production" date back to the Brezhnev era.

Back to the question of agriculture, the only reason why it was a disaster under Stalin was because he chose the wrong type of collectivization policy. He chose the kolkhozy (like Israeli kibbutzim) model over the sovkhozy (state-owned farms) model preferred by his successors. No wonder why the peasants, who bore all the risks with such policy, destroyed their crops and animals!

[KarlMarx1989]

@ the initial question; if achieved, then yes.

[Psy]

No a communist economy by capitalist standards would be seen stagnant due to a lack of profitability as communist industry would be maximizing utility. Capitalist would only see rampant over-production, devaluation of commodities, and no profits when looking at a successful communist economy.

[PossiblyLeft]

In the end isn't the only real comparison the quality of life and how much freedom the citizens of the country have?

[The Ungovernable Farce]

I thought we'd already established that socialism in one country doesn't work out that well? Also, most social-democratic capitalist countries have socialised health care and education, doesn't make them any less capitalist.

[punisa]

Thanks for sharing your views comrades. I really learned a lot :)

Let me expand the topic just a little bit with a hypothetical scenario:
let's say one country's workers manage to form a strong class unity devoted to impose themselves as the rulers of a new socialist state. It could be Italy, France, Macedonia.. whatever.
Also we do not discuss the methods they to it, vanguard, guerrilla ...

This newly founded socialist state would still need to survive in a dominantly capitalist world, correct?
The time until its neighbors turn to socialism could be lengthy.

As far as I understand it is allowed to proceed in two ways: advance or stagnate.
If socialism at any point (let's say 2 years time span) starts to bring quality of life down it will surely loose much of the initial support.

I know that socialism can't play cappie's game. That is clear and obvious. (although USSR as one point produced more then US, as I read somewhere on Wiki).

How would it manage to stay afloat?
If true socialism just kicked in, probably all trade partners will simply abandon it - leaving it alone.
If it can't import any more from other nations (who are still ALL capitalist), or those nations do not allow trade over their territory, how can it provide even the basic needs for its people?

For example, what if this state has absolutely no oil to drill?
What if neighbor countries refuse to provide much needed electricity?
Wouldn't united capitalists in this way easily simply drain that state out of its existence? (more probably it would soon be overthrown by its own people if they realize they have to live in drakness from now on)

For example Cuba was isolated by the US, but there was USSR. After collapse, there were some other countries and so on.

Is it thus ,unfortunately, necessary to remain somewhat connected to the capitalist world until situation doesn't improve?

Ofcourse, this example heavily focuses on socialism in just one state. International (or regional) outbreak of socialism would be something very different, but that's a very different topic all togeather.

[The Ungovernable Farce]

I'd be impressed if it could survive long without being militarily crushed by the capitalist powers. I'd expect the example of a successful revolution to be a huge inspiration to the workers' movements in neighbouring countries, so you'd get a wave of revolts throughout the region, if any of them were successful it'd massively strengthen the position of the first country; if they were all crushed, I imagine the first country would have to return to some form of capitalism to survive, and all the socialist qualities of the new state would fade away.

[KurtFF8]

Well given that under communism production will be for the purposes of meeting human needs rather than the production of commodities for exchange, notions of Gross Domestic Product and what not would become quite meaningless. GDP is a measure of the market value of all goods produced within a nation, but communism involves the abolition of markets, value, nations and so on, so a comparison cannot be made. No, communism won't be able to beat capitalism at its own game, if that's what you're asking, but neither will it be playing that game, so there's no point making the comparison. A society in which commodity production occurs is a capitalist society. This includes the example of China you used above.

I'm actually going to have to disagree with you at this one: at least to some degree.

I don't think that "socialism" or "communism" would be able to beat capitalism at its own game, although when you look at the role of some countries who had socialist revolutions (or at least went under Communist Party rule) the party, at least initially, "took over the roll" of the Capitalist and thus was able to direct the economy towards industrialization much faster and more efficiently than the countries of the West were able to do to get to where they were.

When a Communist Party acts as a "capitalist" party, it's still able to plan the economy more efficiently than a free market capitalist nation can do. The real tricky territory is how does a country then transition to socialism? what would that entail? what would that socialism look like? etc. (and of course, some will see this analysis as something to dismiss altogether, and I'm not 100% stuck to it, but I've certainly had it explained this way, and it makes a lot of sense to me).

So if you're under the opinion that "we haven't seen socialism yet" then of course the answer is: theoretically, it will likely "leave capitalism in the dust" as many say.

If you're of the opinion that Communist Party Rule was at least close to socialism: then there is still evidence of outperforming capitalism at least in the development stage, but as far as competing with still existing capitalist countries: we've seen the results of that.

[punisa]

If you're of the opinion that Communist Party Rule was at least close to socialism: then there is still evidence of outperforming capitalism at least in the development stage, but as far as competing with still existing capitalist countries: we've seen the results of that.

I agree with this theory. It has been seen numerous times in the past. Initial socialist governments (like Yugoslavia) often *compared* themselves to the capitalist neighbors to see "how well were they doing".

For reasons I mentioned above, this new government is forced to maintain trade partnerships with other countries in order to advance its socialist idea.
Presumably it gets stuck in a situation where it must develop its own country to a point of *commercial* success where eventually this success will be used as a material for constructing a second level of socialism.

If our small country completely lacks oil, in the lacks of alternative, we must develop certain products which we shall trade for oil.
We'll have to continue doing this until 1 of possible 2 scenarios are met:
1) socialism starts spreading in other countries
2) we advance ourselves to the technological point where we'll be able to harvest all our energy needs from sun, wind, tide etc.

When this situation occurs, planned economy can more decisively maneuver economy in the needed direction.
But ONLY if the appointed people are very good economic strategists themselves.

If we follow this example, small 4-6 million people country turned socialist, in order to *buy time* we would need people who are experts in the capitalists mode of production?

Gradually it could start implementing socialist values (health, schools etc) which would eventually lead forward to communism.

I don't think that a country of this size could spark a regional or global revolution, but huge masses of international workers would certainly closely observe the initial development that is taking place in this country.
If in 5 years it could present itself as a better choice of living then their own, it would definitely lead to the mass revolution everywhere.

I guess perception is the keyword here. It is the perception that led millions of people in eastern bloc to cry out for capitalism. Majority perceived that this model would greatly improve their lives.
Who can blame an apolitical individual for wanting better for himself?

The reason why we have to tiptoe about socialism (or drop the word all together) when discussing politics with other people is mainly because we can not offer them an adequate example that would be perceived as a better option.
To every argument, a casual debater can counter-argument as at any time.
Argument: "all people in Yugoslavia had jobs, housings and health security"
Counter-argument: "people that disagreed with the party were sent to death camps"

This pro-con debate could be set up for virtually any country that adopted socialism.
Capitalist propaganda will always inflate the horrors of socialism. But to be honest - at most of the times they inflate something tangible that unfortunately exists.
Lies can have a momentary effect, but will fade away after a certain time span. Bloated facts will remain.

If capitalist propaganda machine pushes a story which claims "100.000 people perished in Tito's Yugoslavia death camps" - you instantly loose huge share of potential socialist "target market" in the capitalist world.
Although, in reality, *ONLY* 10,000 people died there. This will not get you off the hook, no matter how large the time span is.

Past socialist countries and its leaders left a very difficult burden for us - 21st century socialists - which we'll have a hard time carrying around.

I have unintentionally broadened up the discussion, excuse me for that.

From my personal observations, having this exact case study in mind (if we were to talk about a country as huge as Russia, it would be a very different story), to a certainly high level of disagreement from many of comrades here -
I think that not only this newly founded socialist country must play the game of its enemy, but it must also beat them in it.

Is this something along "Be Realistic. Demand the impossible" lines?

If you sink me down with "how could this possibly be achieved?", you'll leave me clueless.
Thus I hereby declare that I haven't got a slightest idea how this supremacy of a socialist state over its capitalist contestants could ever be achieved. I just felt the need to humbly share some of the thoughts that have been hunting my brain recently.

For sake of my own piece of mind, it'll probably be best if you can counter my theory with some solid arguments ("you have a bourgeois worldview" is not an argument :lol:)

[Kwisatz Haderach]

From my personal observations, having this exact case study in mind (if we were to talk about a country as huge as Russia, it would be a very different story), to a certainly high level of disagreement from many of comrades here -
I think that not only this newly founded socialist country must play the game of its enemy, but it must also beat them in it.

Is this something along "Be Realistic. Demand the impossible" lines?

If you sink me down with "how could this possibly be achieved?", you'll leave me clueless.
Thus I hereby declare that I haven't got a slightest idea how this supremacy of a socialist state over its capitalist contestants could ever be achieved. I just felt the need to humbly share some of the thoughts that have been hunting my brain recently.
You are right that a small socialist country in a capitalist world would be forced to trade with the capitalists.

But that doesn't mean that, internally, it has to play the "capitalist game" of economic growth. Internally, its primary goal should be to raise the living standards of its people.

[punisa]

You are right that a small socialist country in a capitalist world would be forced to trade with the capitalists.

But that doesn't mean that, internally, it has to play the "capitalist game" of economic growth. Internally, its primary goal should be to raise the living standards of its people.

Precisely.
Of course not internally. In such case it would not be a socialist country at all.
But the external is where it will remain capitalist for a time being. This external factor would probably be limited to import / export.

If this indeed is the case - I see no reason why overall *competitiveness* on the market would fall once socialism is established in this country.
Providing all the necessities for the working class is the top priority (food, health, home). Careful economic planing can then benefit from the improved working conditions - making this country even more successful then it was under capitalist free market economy.

Of course, "success" is here used as a typical capitalist term for one country's ability to create financial wealth.

What I'm actually looking for here are the reasons why this newly established socialist state would decline as an economic force? If we still rate it according to the free market charts.

[Counterreactionary]

But even though socialism and communism doesn't play the same game as capitalism and doesn't progress on the same premises, socialism still needs economical cohesiveness, right? And there is still a budget to balance, aren't there?
Economies like the North Korean and USSR's in it's later years, for example, surely can't be said to have been succesful, whether we analyse it on capitalist basis or not.

[ckaihatsu]

I kind of *like* the *challenge* suggested in the title of this thread.

As with anything that's general or not-well-defined, we can start by defining terms: What would we consider to be 'success' in this context?

If we consider general residential areas around certain industrial production centers I think *that* would be a good way of starting -- it seems to me that offhand there's now *far more* available industrial capacity than *ever before* in human history for meeting people's needs for living.

On this basis we could *reconfigure* the geography around these industrial centers, so as to determine the logistics of providing the basics to people as locally as possible. We would want to *minimize trade* and be as *autarkic* as possible -- if this is done synchronously everywhere on the globe we would avoid the isolation and gangsterism of Stalinism that springs to mind when people think of "socialist countries".


Chris



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[punisa]

I kind of *like* the *challenge* suggested in the title of this thread.


Hehe, you noticed the high level of carefulness when it comes down to mentioning socialism and capitalist economy in a joint discussion.
It's like having a conversation with a very traditionalist religious old man and you try very hard not to insult him by any means :laugh:

Thus the ** and " " serve as the best possible defense against an outrage of proletariat-dictatorship-money-abolishing-secretly-Pol-Pot-admiring type of people :laugh:

On a more related note, could you explain the "reconfigure the geography around these industrial centers". I *think* (there's that cute sign again) I know what you're saying, but I'm not completely sure. Could you please elaborate a bit?

[ckaihatsu]

Hehe, you noticed the high level of carefulness when it comes down to mentioning socialism and capitalist economy in a joint discussion.
It's like having a conversation with a very traditionalist religious old man and you try very hard not to insult him by any means :laugh:

Thus the ** and " " serve as the best possible defense against an outrage of proletariat-dictatorship-money-abolishing-secretly-Pol-Pot-admiring type of people :laugh:


Heh! Well, I'm really not *that* careful in political discussions, either online or in person. (Note that I don't even use a pseudonym here....) I use the asterisks for *emphasis* in the flow of my writing, not to introduce any kind of subtext.





On a more related note, could you explain the "reconfigure the geography around these industrial centers". I *think* (there's that cute sign again) I know what you're saying, but I'm not completely sure. Could you please elaborate a bit?


Since industrial fabrication processes are the greatest extent of humanity's technological ability it follows that this capability should be in the hands of those who actually *labor* at the machines, in order to benefit humanity *as a whole*.

The current *political geography* is quite arbitrary in relation to industrial centers as the *sources* of goods and services. It would be better to reconfigure our residential areas to orient *towards* the *closest* industrial plants that can provide what the people of that area require. This would have to go hand-in-hand with a worldwide workers' control of the industrial machinery, of course....