Centrally planned economics and growth

[Robocommie]

Just recently I read an article regarding the Soviet standard of living. It argued that while the Soviet economy had some very good traits, like universal access to basic preventive health care and there was almost no hunger and homelessness, generally speaking the per capita income was very low compared to the US despite it being the second largest economy in the world at it's height. The article stated that centrally planned economies are very good at expansive growth, the development of new mines, new farms, new factories, but very bad at intensive growth, making already established units of production more productive. Essentially, the article argues that despite it's strengths, a centrally planned economy is very inefficient.

Is this bullshit? If so, why? Are there resources to explore this question and the question of Soviet standards of living better?

[Nolan]

Just recently I read an article regarding the Soviet standard of living. It argued that while the Soviet economy had some very good traits, like universal access to basic preventive health care and there was almost no hunger and homelessness, generally speaking the per capita income was very low compared to the US despite it being the second largest economy in the world at it's height. The article stated that centrally planned economies are very good at expansive growth, the development of new mines, new farms, new factories, but very bad at intensive growth, making already established units of production more productive. Essentially, the article argues that despite it's strengths, a centrally planned economy is very inefficient.

Is this bullshit? If so, why? Are there resources to explore this question and the question of Soviet standards of living better?

Rampant military spending, over-bureaucratization, and corruption, which are interconnected, are much bigger threats to us than any inherent "inefficiencies" in central planning.

Could you find the article, please?

[MarxSchmarx]

^^ Yeah, link to the original article. This sounds a lot like a variant of the calculation problem - robocommie, is that your assessment of the criticism? I for one would be very surprised if this study was a simple statistical analysis of the economic data.

[Robocommie]

I have to confess, the article I found is not particularly in depth or rigorous, and was basically a breakdown on ehow.com - it was the first thing Google returned about "Soviet standards of living". I can post the article's url though if you want to read it.

http://www.ehow.com/about_4566756_living-conditions-soviet-union.html

The main thing that is of concern to me is not the article itself, but the issues regarding the efficiency of the economy, the low per capita income despite the large economy, issues pertaining to the Brezhnev stagnation. I'll admit that I don't understand the intricate facts about the Soviet economy and problems it faced, but I have heard a lot about how grain production, for example, was substantially lower, per acre, on the sovkhozes and kolkhozes than on the small, privately held plots given over to kolkhozy workers.

[Die Neue Zeit]

I don't buy the sovkhoz part. This is because most of the statistics merely contrast the private plots with kolkhoz output. There was no doubt that sovkhoz production was far more efficient, which is why I support this particular model for things like vertical farming.

[Die Neue Zeit]

To all those who "Thanked" me: it has been suggested that sovkhoz production was still somewhat less "efficient" than the private plots, but one should consider where exactly these private plots existed (in places where the farmers absorbed all the business risk - kolkhozy) and the consequences of over-farming with economies of scale (the Virgin Islands fiasco comes to mind) which the sovkhozy didn't want on their hands.

More analysis should be done on government attempts to harmonize kolkhoz and sovkhoz production:

http://www.photius.com/countries/soviet_union_former/government/soviet_union_former_government_stalins_legacy.html


Among these decisions were the 1958 elimination of state-operated machine tractor stations, which had given the party leverage over the kolkhoz by controlling its access to heavy farm machinery; the establishment in 1965 of a minimum wage, pension, and other benefits for kolkhoz workers; and the 1967 decision to make the sovkhoz a self-financed entity, which in theory the kolkhoz had been from the start.

I hope comrade MarxSchmarx is interested in reiterating his thing about not treating vertical farms as a global panacea due to different natural climates for different produce, or can the vertical farms' internal temperature and humidity control mimic those climates?

[Stephen Colbert]

I always get cautious of centrally planned economics that aren't organic and of the workers, not to beat a dead horse but when Stalin collectivized food that's where the famine and starvation in the USSR came from. I forget the source but I was also reading about sustainable growth, fast-- what Chomsky calls, "modernization in a generation".

[Nolan]

I always get cautious of centrally planned economics that aren't organic and of the workers, not to beat a dead horse but when Stalin collectivized food that's where the famine and starvation in the USSR came from. I forget the source but I was also reading about sustainable growth, fast-- what Chomsky calls, "modernization in a generation".

The famine did not come from the collectivization itself but from drought and minor factors like rebellion and sabotage on the part of rebellious kulaks and such.

Stalin pushed for industrialization to put the USSR on a level playing field with potential aggressors, like Japan and Poland which were expected in the immediate future, or any of the other imperialist powers that invaded before. Had it not happened Germany would likely have won the war in Europe or Britain would have had to fight back a full scale invasion.

[Stephen Colbert]

I'm like 100% sure that's a revisionist viewpoint. I can prove collectivized agriculture caused famine deaths...

[Nolan]

I'm like 100% sure that's a revisionist viewpoint. I can prove collectivized agriculture caused famine deaths...

Then do it. Weather was more responsible than any Soviet policy. To say "collectivization caused famine!!11" is to oversimplify the situation.

Also, "revisionist" in this sense only applies to Nazi denial of the Holocaust.

[ComradeOm]

The article stated that centrally planned economies are very good at expansive growth, the development of new mines, new farms, new factories, but very bad at intensive growth, making already established units of production more productive. Essentially, the article argues that despite it's strengths, a centrally planned economy is very inefficient.

Is this bullshit? If so, why? Are there resources to explore this question and the question of Soviet standards of living better?That summary is pretty much correct. The reason being simple - the volume of data. When the USSR was industrialising there were relatively few products/materials to model/plan - the likes of coal, steel, cotton, etc, and other goods involved in the development of industry itself. The system of planning was still crude and not very efficient but it was possible to prioritise these items and pretty much ignore the rest of the economy. And it worked - the allocation of resources for this task was far more purposeful than it would have been under a market economy

The problem came when the economy matured and the USSR's political leadership belatedly shifted to producing more consumer goods (ie, goods that actually benefited the populace) in the 50s. This introduced hundreds/thousands of new items into the plan and essentially overwhelmed the planners with data. It was no longer possible to hide the inefficiencies of the system by focusing on a few key materials. This, long with political interference and bureaucratic stagnation, meant that by the mid-70s the planners had pretty much given up and the plans meant little

That said, the Soviets did devise some very interesting techniques for economic planning, any of which are used today in the West, and I wouldn't write off the system entirely. However flawed it was, the Soviet model remains the only real alternative to the market that has been extensively tested in real life. With the appropriate IT advances since then (which should make the tasks of data collection and number crunching vastly easier) I see no reason why a command economy, or some variant thereof, couldn't work

This thread (http://www.revleft.com/vb/command-economy-t62485/index.html?t=62485) might be of interest

As for further reading, I can't recommend Nove's Economic History of the USSR highly enough. Davies Soviet Economic Development from Lenin to Khrushchev is a more introductory work while Ellman's Socialist Planning is more detailed


The famine did not come from the collectivization itself but from drought and minor factors like rebellion and sabotage on the part of rebellious kulaks and such. Weather was a factor but not the determining one. I don't have the exact figures on hand but I'm pretty sure that the harvest was worse in 1936 than '32 or '33. What turned a drought into a major catastrophe that killed millions was the absolute chaos caused by the collectivisation process. It was a disaster in almost every regard. Ignore talk of "rebellious kulaks" and ask yourself just how well prepared was the state when the organisations and committees that were supposed to govern the establishment and composition of collective farms (such as Kolkhoztsentr) were not set up until over a month after Stalin's 'great turn' and the collectivisation drive had been launched? On a practical level alone, the whole enterprise was staggeringly ill-prepared yet aimed to completely restructure the country's agricultural sector. Madness

[∞]

I think an unavoidable aspect of a prosperous economy is economic freedom, consumer access or an ability to meet demands. The problem with central planning is well...it takes forever to be able to "plan" at the moment of any particular consumer demand. The state also, is the only sector providing wages, thus we have less motivation for the workers. (Thus resulting in Lenin's 'disciplined' work force, calling for 'non-workers to be sent to gulags.) The state then has to use force to manage production and it still can't seem to match the status-quo. Central Planning should be regarded as a failure and so we must establish system where workers are very much able to consume the fruits of their own labor.

[ckaihatsu]

I think an unavoidable aspect of a prosperous economy is economic freedom, consumer access or an ability to meet demands.


In a word, 'surplus' -- as long as a roughly equitable access to it is maintained.





The problem with central planning is well...it takes forever to be able to "plan" at the moment of any particular consumer demand.


Here you're making history sound deterministic forever into the future. Just as we're not "stuck" with stone-age tools we shouldn't be trapped into patterns of thinking that cause us to imagine overly restrictive possibilities.

I think you're also hung up on a *linear* approach to planning and fulfillment -- maybe the growth and harvest of *one single plant* is bound to a linear process, but when you're talking about several arable plots over several seasons there's more *nonlinearity* and flexibility in how to plan their planting and harvesting cycles. (Ditto for industrial and/or computational processes.)





The state also, is the only sector providing wages, thus we have less motivation for the workers.


This, too, is overly and unreasonably dismissive, based on a misconception of history-bound determinism. Given better collectivist (worker-based) administration we might be able to realize a fluidity of participation that *encourages*, *motivates*, and *empowers* workers to make the whole far greater than the sum of its parts.

This particular argument also borders on being reactionary -- it's the kind of argument we're used to hearing from pure-market types.... The thing of it is that we have to *surpass* Stalinism, or elitist bureaucratic administration, to realize actual worker-collectivist administration.





(Thus resulting in Lenin's 'disciplined' work force, calling for 'non-workers to be sent to gulags.)


(I can't speak to this myself -- anyone...?)





The state then has to use force to manage production and it still can't seem to match the status-quo. Central Planning should be regarded as a failure and so we must establish system where workers are very much able to consume the fruits of their own labor.


This doesn't have to be an either-or formulation, as you're contending it is. Just because a liberated labor may decide to use a centralized administration doesn't mean that workers *wouldn't* be able to consume the fruits of their own labor.

The *point* of an administration *at all* is to mitigate the problems of duplication of effort that are inevitable when localities are cut-off from each other. Why should *everyone* have to spend *their own* time on family farms when large-scale production *leverages* fuel power so as to feed thousands from the labor power of just a few? Certainly we're all meant for better things / lives than to spend a large portion of it tending to mere food production.

Just as market collectivization is better than locality-bound feudal production, a *workers*-based collectivization would be superior to *capital*-bound market planning....

[∞]

In a word, 'surplus' -- as long as a roughly equitable access to it is maintained.





[QUOTE]Here you're making history sound deterministic forever into the future. Just as we're not "stuck" with stone-age tools we shouldn't be trapped into patterns of thinking that cause us to imagine overly restrictive possibilities.

I think you're also hung up on a *linear* approach to planning and fulfillment -- maybe the growth and harvest of *one single plant* is bound to a linear process, but when you're talking about several arable plots over several seasons there's more *nonlinearity* and flexibility in how to plan their planting and harvesting cycles. (Ditto for industrial and/or computational processes.)


In a Centrally-planned economic system the needs of the farmers, and the crop's consumers are less likely to be meant. Another problem with this expression could be that a state may only have interest in trade, for not enough interest may lie within the needs of the consumer. However if the state may be more like an autakry the needs of a consumer must be met locally, within the community which may need a certain commodity. Ex. People in the snow want boots, but people in the sand want sandals. A state and it's planners are going to have a very difficult time determining what is to be produced.




This, too, is overly and unreasonably dismissive, based on a misconception of history-bound determinism. Given better collectivist (worker-based) administration we might be able to realize a fluidity of participation that *encourages*, *motivates*, and *empowers* workers to make the whole far greater than the sum of its parts.

Alright I'll apologize for any arrogant denouncement. IMO workers holding their own firm can accommodate a proper form of motivation. I find you being over-optimistic with this statist utopia, non-cognitive labor will be done to a bare minimum. Workers will only be doing enough to 'get by' since the state already provides. So the state will have to use force i.e. the Gulags for "non-workers".



This particular argument also borders on being reactionary -- it's the kind of argument we're used to hearing from pure-market types.... The thing of it is that we have to *surpass* Stalinism, or elitist bureaucratic administration, to realize actual worker-collectivist administration.






(I can't speak to this myself -- anyone...?)
Please correct me if I'm wrong.




This doesn't have to be an either-or formulation, as you're contending it is. Just because a liberated labor may decide to use a centralized administration doesn't mean that workers *wouldn't* be able to consume the fruits of their own labor.

Well why do you think the peasants of the SU began working in camps? They were producing, but at the will of the state, not the will their own or anyone else's predicament. Same with Maoist farming, it's been stated that the farmers lacked motivation, and food shortages were rampant.




The *point* of an administration *at all* is to mitigate the problems of duplication of effort that are inevitable when localities are cut-off from each other. Why should *everyone* have to spend *their own* time on family farms when large-scale production *leverages* fuel power so as to feed thousands from the labor power of just a few? Certainly we're all meant for better things / lives than to spend a large portion of it tending to mere food production.

Just as market collectivization is better than locality-bound feudal production, a *workers*-based collectivization would be superior to *capital*-bound market planning....

I see a major flaw in that reasoning. 1st, in an Anarchist farming system, communes or federations would be strongly tied to the industrial unions and they can contact them for the making of tractors,etc,etc.
2nd, I think farmers are inevitably divided by very diverse agricultural settings which posses the capability of running themselves if any outsider doesn't want their goods.

[ComradeOm]

Thus resulting in Lenin's 'disciplined' work force, calling for 'non-workers to be sent to gulagsNever heard of it. On the one hand it can't be taken literally, ie all 'non-workers', because that would require sending 80% plus of the Russian population to the GULAG. It also doesn't apply to speculators, certainly not during the NEP period. There's also the small fact the the GULAG, being a network of forced labour camps, did not come into existence until around 1929

Lenin did call for one-man management at an earlier date but this was roundly ignored until the creation of the Stalinist economy. Even then draconian laws against ill-discipline on the factory floor (such as being slightly late or the failure to meet production norms) did not formally come into effect until 1938

[∞]

"Obedience, and unquestioning obedience at that, during work to the one-man decisions of Soviet directors, of the dictators elected or appointed by Soviet institutions, vested with dictatorial powers."
Lenin, Six Theses on the Immediate Tasks of the Soviet Government, April/May 1918


Article 9 of a decree, signed by Lenin, from 14 November 1919 stated that:

"Particular obstructive workers who refuse to submit to disciplinary measures will be subject, as non-workers, to discharge and confinement in concentration camps."

(James Bunyan: "The Origin of Forced Labor in the Soviet State, 1917-1921. Documents and Materials" (John Hopkins Press,1967), page 88; and George Legget: "The Cheka: Lenin's politcal police" (Clarendon Press, rev.utg. 1986), page 179)

[ComradeOm]

"Obedience, and unquestioning obedience at that, during work to the one-man decisions of Soviet directors, of the dictators elected or appointed by Soviet institutions, vested with dictatorial powers."
Lenin, Six Theses on the Immediate Tasks of the Soviet Government, April/May 1918Which was one of the many decrees that was simply ignored on the ground. Until the creation of the Stalinist economy the workings of Soviet factories were, generally, governed by a triumvirate (treugol'nik) of management, local party cell, and workers (though the union)


Article 9 of a decree, signed by Lenin, from 14 November 1919 stated that:

"Particular obstructive workers who refuse to submit to disciplinary measures will be subject, as non-workers, to discharge and confinement in concentration camps."Discipline from whom?

As it is, the camp system that would become the GULAG was of minuscule proportions until the late-twenties. Even then most of population was of criminal origin. Masses of 'non-workers' were simply not being sent to Siberia

[ckaihatsu]

In a Centrally-planned economic system the needs of the farmers, and the crop's consumers are less likely to be meant.


Just because you say something doesn't mean that it's true. You need to provide some evidence or reasoning to back up your claims.

I continue to maintain that the practice of administration over combined areas of production can lead to greater efficiencies and reduce the duplication of effort, especially if the administration is not corrupt and inefficient itself.





Another problem with this expression could be that a state may only have interest in trade, for not enough interest may lie within the needs of the consumer.


This *is* a good point, and I agree -- a nation-state might still *compete* in the international arena, diverting production to destructive endeavors like warfare (the result of trade disparities and disputes), even if it has relatively effective administration within its *own* borders.





However if the state may be more like an autakry the needs of a consumer must be met locally, within the community which may need a certain commodity. Ex. People in the snow want boots, but people in the sand want sandals. A state and it's planners are going to have a very difficult time determining what is to be produced.


This argument has *already* been disproven with the rise of global trade, albeit market-based. We could easily see an advancement to a worldwide system of purchase orders, production, and fulfillment that does *not* require the overhead of financialization.





Alright I'll apologize for any arrogant denouncement. IMO workers holding their own firm can accommodate a proper form of motivation.


Okay.





I find you being over-optimistic with this statist utopia, non-cognitive labor will be done to a bare minimum.


Please don't project a nation-state-based kind of political ideology onto me. I support the workers of the world, to enact a political economy that is in their (our) best interests, *away* from the "invisible hand" mechanism of the markets, and of public-funds bailouts of the same.

Mechanical labor should be *mechanized* and automated as much as possible, so as to save humanity from such crude labors.





Workers will only be doing enough to 'get by' since the state already provides. So the state will have to use force i.e. the Gulags for "non-workers".


See, here's the *difference* between where you're coming from, and where *I'm* coming from -- your *conception* of collectivization begins and ends with historical Stalinism. Many revolutionaries are *not* bound by this formulation and instead we put our political efforts towards the promotion of a politics that would *empower* the world's proletariat to seize control of production away from the capitalists. There would not *have* to be any reliance on a state authority separate from the workers themselves *if* the workers can self-organize and administrate so as to provide efficiencies of scale over broad areas, thus reducing duplication of effort.





Well why do you think the peasants of the SU began working in camps? They were producing, but at the will of the state, not the will their own or anyone else's predicament. Same with Maoist farming, it's been stated that the farmers lacked motivation, and food shortages were rampant.


This is another historical-based point that may be of limited usefulness to us here in the present. I am neither confirming nor dismissing the accuracy of your statement.





I see a major flaw in that reasoning. 1st, in an Anarchist farming system, communes or federations would be strongly tied to the industrial unions and they can contact them for the making of tractors,etc,etc.
2nd, I think farmers are inevitably divided by very diverse agricultural settings which posses the capability of running themselves if any outsider doesn't want their goods.


There's nothing *inherently* wrong with self-sufficiency and local production, *except* that -- simply put -- we can do *far* better. If "outsiders" don't want certain goods that are being produced a worker-based administration would be able to receive this information and reallocate work activities to better use so that people's work lives aren't in vain.

Likewise, diverse agricultural (or any productive) settings could be *beneficial*, instead of *detrimental*, if that diversity can be *coordinated* over a larger area of (more-diverse) consumption.

[∞]

Which was one of the many decrees that was simply ignored on the ground. Until the creation of the Stalinist economy the workings of Soviet factories were, generally, governed by a triumvirate (treugol'nik) of management, local party cell, and workers (though the union)

Discipline from whom?

As it is, the camp system that would become the GULAG was of minuscule proportions until the late-twenties. Even then most of population was of criminal origin. Masses of 'non-workers' were simply not being sent to Siberia

Alright thank for explaining I appreciate your honesty :)

[Hyacinth]

As is usually in many discussions I think the disagreements between the participants are partly verbal, in that not everyone is using the term 'central planning' (which is unfortunately associated with Soviet-style state capitalism) in the same sense.

What contemporary proponents of a planned economy propose is the implementation of a non-market democratically controlled and cybernetically coordinated economy, not Soviet-style state capitalism. The terms 'central' or 'decentralized' are, in a sense, inapplicable to such an arrangement, insofar as—as in any complex system—there will be many control and regulative mechanisms to ensure the optimal functioning of the economy. This of course includes an overall regulative mechanisms for the purpose of coordinating all economic activity. But, it must be emphasized, such regulative mechanisms are purely administrative; those placed in charge of economic planning wouldn't have any political power, their task would be purely to administrative the democratically controlled economy. The planners task wouldn't be to decide what to make, but rather, given the inputs of consumer preferences and democratic decisions, to maximize the satisfaction of said preferences within the contains imposed by the democratic decisions of society as a whole.

The implementation of such an economy was impossible for lack of sufficient technology throughout much of the 20th century, but advancements in computation and information technology have overcome these technical limitations. We can now, in real time, monitor and collect data on consumer preferences, and also solve the system of linear equations, in near real time (or at least quickly enough to make it viable to plan an economy with) necessary for planning. In addition, the same information technology has rendered possible the implementation of democracy on a mass scale; essentially, electronic voting would permit for direct democracy and participatory democracy. These measures, in addition to demarchic administrative councils (i.e., having administrative bodies selected by lot from a relevant sample), would provide for democratic control of the economy.

We would, to paraphrase Marx, be moving away from 'governance of people' to 'an administration of things'. In other words, it would be the withering away of the state.

[ckaihatsu]

We can now, in real time, monitor and collect data on consumer preferences, and also solve the system of linear equations, in near real time (or at least quickly enough to make it viable to plan an economy with) necessary for planning.


In my estimation I consider the situation to be one of a massive *sorting* of daily-updated political demands and consumer preferences. Care to comment on the possible mechanical process?

[Hyacinth]

In my estimation I consider the situation to be one of a massive *sorting* of daily-updated political demands and consumer preferences. Care to comment on the possible mechanical process?
(Sorry for the delayed reply, been busy IRL)

Most of the mechanisms necessary for the implementation of a democratically and cybernetically controlled economy (i.e., a socialist economy) are already in place under capitalism, albeit in nascent form, on a smaller scale, and utilized for the purposes of maximizing profits rather than utility.

E.g., contemporary inventory control systems (http://en.wikipedia.org/wiki/Inventory_control_system), warehouse management systems (http://en.wikipedia.org/wiki/Warehouse_Management_System), enterprise resource planning (http://en.wikipedia.org/wiki/Enterprise_Resource_Planning), management information systems (http://en.wikipedia.org/wiki/Management_information_system), automated identification and data capture (http://en.wikipedia.org/wiki/Automated_identification_and_data_capture), etc.

The list goes on and on, just browse wikipedia and you'll find even more mechanisms that are already utilized by capitalist firms which can be applied on a mass scale in a socialized economy.

We don't need to reinvent the wheel when it comes to economy management, we just need to reapply many of the existing mechanisms for our ends.

I hope that answers your question, if not I'd be happy to try and clarify further.

[ckaihatsu]

(Sorry for the delayed reply, been busy IRL)


No prob at all -- we all have our escape mechanisms...(!) (heh)





Most of the mechanisms necessary for the implementation of a democratically and cybernetically controlled economy (i.e., a socialist economy) are already in place under capitalism, albeit in nascent form, on a smaller scale, and utilized for the purposes of maximizing profits rather than utility.

[...]


Agreed.





We don't need to reinvent the wheel when it comes to economy management, we just need to reapply many of the existing mechanisms for our ends.


I'd like to not reinvent the wheel here but rather to put the wheels "on rails", if you will....

I'll admit to balking a little on the inside at your previous mention of 'linear equations' in regards to a post-capitalist collectivist administration. I agree with your *logistical* indications, above, but I still feel as though we're still missing the core processes of what it would mean to put such a logistical infrastructure into motion in a *political* way.

For the reader I'd like to introduce a model I developed not too long ago. It posits a mass-prioritized listing of political demands and consumer preferences, aggregated from all individuals, updated daily.

On the labor-supply side, using entirely collectivized assets and resources, the model establishes a political economy of labor-hour-based labor credits that are *not exchanged* for material personal possessions (since the output from collectivized infrastructure by liberated labor *must* be free-access, by definition). Instead the earned labor credits proportionally empower liberated laborers to organize and select *incoming* liberated laborers, going forward, in perpetuity.





communist supply & demand -- Model of Material Factors

This is an 8-1/2" x 40" wide table that describes a communist-type political / economic model using three rows and six descriptive columns. The three rows are surplus-value-to-overhead, no surplus, and surplus-value-to-pleasure. The six columns are ownership / control, associated material values, determination of material values, material function, infrastructure / overhead, and propagation.

http://tinyurl.com/ygybheg




Infrastructure / Overhead

communist administration -- Distinct from the general political culture each project or production run will include a provision for an associated administrative component as an integral part of its total policy package -- a selected policy's proponents will be politically responsible for overseeing its implementation according to the policy's provisions

labor [supply] -- All workers will be entirely liberated from all coercion and threats related to basic human living needs, regardless of work status -- any labor roles will be entirely self-selected and open to collective labor organizing efforts on the basis of accumulated labor credits

consumption [demand] -- A regular, routine system of mass individual political demand pooling -- as with spreadsheet templates and email -- must be in continuous operation so as to aggregate cumulative demands into the political process

A further explanation and sample scenario can be found here:


'A world without money'

tinyurl.com/ylm3gev





I hope that answers your question, if not I'd be happy to try and clarify further.


Thank you, Hyacinth.