Economics: Savings in a Socialist Society

[maya]

I gotta take a chill pill and try and understand some socialist theory, so here it goes!

Three questions:

1) Is savings necessary in a purely socialist economy, or would the worker's councils keep reserves of goods, and coordinate with the central planning apparatus?

2) What to do with money today? I got a couple-hundred in savings. Obviously stocks are out. Municipal bonds? Knew a guy last year trying to get everyone hyped about gold (and loved Ron Paul, WTF do Paulites love gold anyways?) Told him we're gonna make toilets out of the stuff, baby!! [:)]

3) Any recommendations for good books about socialist economics, specifically the putting together of socialist planning in real life?

[Potemkin]

Greetings,

1) From an anarchist-communist position, which is generally also the final stage of marxist communism, as well, a society that operated "from each according to ability, to each according to need" would have no need for personal savings, at least not in the traditional sense. Such a society would not have currency, and members would not be directly reimbursed for the work they contributed. Rather, each person would be entitled to have their essential material needs met, and would have plenty of free time to have a supplemental garden, or participate in arts or crafts, or pursue whatever their interests to supplement their most basic needs. Basically, such a society would affirm the right of everyone to life.

2) I would say that it is important to realize that whatever we do today, we do under capitalism, and not to kick ourselves too much over that fact. I would try to avoid the worst of the capitalist system when it comes to how my money is spent or invested. For me, this means my savings is in a small credit union, and I get a small amount of interest on it. Gold might be another good "investment," although its price per ounce was sky-high when I last checked. The point of buying gold is that it is an actual item of worth, whereas our money is not backed by anything real. This is why certain free-market capitalists like the Raul Paulites favor precious metals over "fiat" currency.

3) As for books on socialist economics, I will recommend a few that I know of. Perhaps others can help out with this?

There are two pamphlets that I know of, that are available free online:

Anarchist Economics by Jon Bekken
The Wage System by Peter Kropotkin

As for books, I would recommend:

The Conquest of Bread by Peter Kropotkin -- details the anarchist-communist society.
Your Money or Your Life by Joe Dominguez and Vicki Robin -- a fairly radical (though not explicitly socialist, but seemingly compatible) strategy to manage your money under capitalism.

Hope this helps!

[syndicat]

There is a distinction between personal savings and social savings. Let's taket the second. In a given period of time our productive activities generate the things we consume...use up...in that period of time, such as this year. We consume food, various household articles wear out, we consume electricity, etc.

But in order to be able to produce these things tomorrow, we must maintain the equipment and other things we need that support our ability to produce. We need to repair roads, build new houses, innovate and construct new equipment and so on. So a certain part of our total labor goes into doing this. This is investment. Investment in this sense is inevitable in any economy.

I do not recommend central planning...it will simply empower a bureaucracy. But there does need to be some system of social planning. This is the means through which we decide what to invest in and how much. The more we invest in building future capacity, the less we can consume now.

For the working class personal savings is just delayed consumption, for the most part. There is no particular reason that a socialist economy should not allow you to save. Let's say that you want to take a long vacation in the mountains or you want to buy a boat for fishing. so you save out of your current consumption entitlement some portion. Or you borrow and then pay it back...it doesn't matter.

What is important is that there is no interest. Interest is a form of capitalist income and assumes the existence of money-capital being used to make a living off of others.

[maya]

Thanks Potemkin for your detailed reply!

The view of savings in the present system to me seems like delayed consumption i.e. I don't eat my share of soup today, meaning I get two servings tomorrow, and if you don't eat soup at all then your children get passed on the thousands of soups you didn't eat, which is absurd.

I've had many an argument with Ron Paul supporters over gold as real value. The markets for gold are just as speculatitive in my view as stocks. I cannot eat gold.

My 'investment strategy' has been for a long time to spend any of my personal surplus on extra food, pay rent in advance etc. etc or cut back the work I do for capitalist employers.

Thanks also for your book recommendations, especially Your Money or Your Life which sounds like an interesting read. The two books I have read on socialist economics have been Socialist Economics and Economic History of the USSR, both by Alec Nove, both historical and limited to periods of the USSR.

If anyone else has suggestions of (text)books of socialist economics I'd be appreciative!

[maya]

Thanks for replying syndicat!

My question was more about personal than social savings. In a socialist economy I am thinking that personal surplus could exist (producing more than consuming) and that surplus could be directed toward additional social investment.

On central planning, I think there is a plan for passive centralized coordination, instead of the top-down command economies that have exisisted in the past. But I take your point about empowering a bureaucracy.

I am opposed to interest as well, and have imagined that in a socialist economy capital and labor could be raised by interest-free bonds: communities wanting to build means of production could issue bonds for its construction that would be paid back with what has been produced. If some folks want a boat for fishing, they could issue fish bonds for some fish caught for a time.