4 hours of work a day

[Lanky Wanker]

I've heard a few left wingers say in their ideal left wing society, everyone would work about 4 hours a day then spend the rest of their day doing things for themselves they enjoy. Would this actually work or not? Sounds a bit too easy to me.

[Hebrew Hammer]

I've heard a few left wingers say in their ideal left wing society, everyone would work about 4 hours a day then spend the rest of their day doing things for themselves they enjoy. Would this actually work or not? Sounds a bit too easy to me.

Considering the advances in technology, I don't see how it would seem 'too easy' not to mention, workers would no longer fear of being displaced due to technological innovations and thus either find a new job/trade or starve.

[Rooster]

If you consider all of the people who are unmployed and under employed then the number of hours could be reduced if these people were able to enter employment.

[jake williams]

I've heard a few left wingers say in their ideal left wing society, everyone would work about 4 hours a day then spend the rest of their day doing things for themselves they enjoy. Would this actually work or not? Sounds a bit too easy to me.
Well, a socialist society would be able to make collective decisions about balancing labour and leisure. This isn't true in a capitalist society, where the working day is mediated almost entirely by the needs of capitalists, and not workers.

That said, I think 4 hours a day is probably an underestimate, in the short term, of how much work would be required to maintain the standard of living we'd like to. I've heard Michael Albert say similar things, but his estimates are based on the idea that because of increases in labour productivity, we can maintain 1960s living standards with half the labour time. This might be true, but I sure as fuck don't want to return to living standards of the 60s.

There's a lot of other problems with the estimates, but I do think that the general points, that we can reduce total social labour and maintain the same level of production or, if we wish, reduce total social labour AND production if we prefer leisure, are both true.

[Lanky Wanker]

If you consider all of the people who are unmployed and under employed then the number of hours could be reduced if these people were able to enter employment.

Yeah, I was thinking this but wasn't sure if the number of people looking for employment could make up for it.

[Comrade_Oscar]

Well it would depend on the need of the worker's and the need of society. Four hours might be possible in the future because of (as previously stated) technological advancements.

[ellipsis]

See the IWW essay Arguments for a Four-Hour Day (http://www.iww.org/en/node/758). I think the key in their view is an elimination of jobs which have no social utility. What this means and how it is determined is not explained. But it is a very interesting read, I highly recommend it.

[robbo203]

I've heard a few left wingers say in their ideal left wing society, everyone would work about 4 hours a day then spend the rest of their day doing things for themselves they enjoy. Would this actually work or not? Sounds a bit too easy to me.


Consider how much work is done today which contributes absolutely nothing to human welfare and wellbeing. It is simply carried out to keep the system of capitalism ticking over. To meet the needs of capital itself

Take, for example, the banking industry. According to the Bureau of Labor Statistics the banking industry in America alone employed about 1.8 million wage and salary workers in 2008. But that is not all. The buildings that accommodate all these bank workers, the facilities inside these buildings, the provision of electricity and so on all has to be taken into account in assessing the impact of the banking industry on the economy in real terms. This impact is massive in terms of the workers and resources directly and indirectly implicated in the banking indsutry

Banking, however is just one of numerous occupations carried on in capitalism which contribute nothing to human welfare but only exist in response to the system's own functional requirements. These have to be totted up to get some idea of the true scale of structural waste in capitalism. It is positively enormous! There is a good pamphlet on this which goes into the matter in some detail here http://www.worldsocialism.org/spgb/pamphlets/SAAPA.html

In a communist or socialist society - they mean the same thing, really - we won't have people working in banks or pay departments or insurance companies and a thousand and one other types of useless occupations becuase all these things will be rendered completely unnecessary by a fundamental change in the economic basis of society. The means of production will become the common property of every one. As a result things will no longer be produced for sale on a market with a view to profit and therefore the entire commercial and financial apparatus to support this kind of activity will no longer be needed.

That means all the materials and labour currently used for socially uselsss occupations like banking will be liberated and freed up for socially useful production in a communist society. In effect we will be able to maintain our existing standard of living (on average) with less than half the hours we work now - or alternatively we can massively increase our standard of living so to speak by working the same number of hours. Many would argue that even this figure is on the conservative side...

[Spawn of Stalin]

There is no reason why the working day couldn't be chopped in half or close to. As others have pointed out, think of all the unnecessary jobs, not just in pointless sectors like banking, but in everyday trades too. There is so much choice when it comes to capitalism, take broadband internet, or telecommunication, if all these companies were incorporated under the state or whatever you believe in, so many jobs would be no longer needed. This applies not just to services but to the manufacturing of goods also, because under socialism overproduction would not be an issue to the extent that it is today, thus, less people producing things, less jobs, shorter working day.

[Kamos]

Well, consider how much unemployment we have today. We could have everyone work half as much, and thus be able to employ up to 2x as many people. That's one reason it'd be good, the second being what's already mentioned - many unnecessary jobs make it possible. The only reason this isn't being done already is because it's inefficient to have (effectively) two workers do the job instead of one in a capitalist system - in fact, the way the Soviet Union and the communist bloc tried to organise jobs so that there would be no unemployment, it was even portrayed as something bad.

[jake williams]

Take, for example, the banking industry. According to the Bureau of Labor Statistics the banking industry in America alone employed about 1.8 million wage and salary workers in 2008. But that is not all. The buildings that accommodate all these bank workers, the facilities inside these buildings, the provision of electricity and so on all has to be taken into account in assessing the impact of the banking industry on the economy in real terms. This impact is massive in terms of the workers and resources directly and indirectly implicated in the banking indsutry
The banking and insurance industries would be substantially reduced, but the work they represent wouldn't be eliminated.

Decisions would still have to be made about the allocation of productive resources. This takes work, and it takes expertise. This work will be considerably redistributed to workers, but that would mean those workers have to do more work - not necessarily a bad thing, but something we can't dismiss. I think though that we would still retain analytical specialists, though their social role would be considerably different. (In a sense this is the main difference between capitalist and socialist societies).

Likewise, most of the insurance industry would disappear, but not all of it. There's still work to be done in filtering out fraudulent insurance claims.

Moreover, considerably more labour would be required in other fields as socialist societies begin to address needs unaddressed in capitalist ones. This is especially true in education and healthcare, but they're not the only places.

[Os Cangaceiros]

This might be true, but I sure as fuck don't want to return to living standards of the 60s.

I actually wouldn't mind returning to 60's living standards in exchange for only working three or four hours a day.

IIRC Paul Goodman tried figuring out exactly how much labor was required to sustain living standards...I can't remember what his answer was though.

[robbo203]

The banking and insurance industries would be substantially reduced, but the work they represent wouldn't be eliminated.
.

How do you figure this out? Exactly what work do banks and insurance companies do that would still need to be done in a moneyless society of free access to goods ansd service. Ive heard this same argument from anarcho capitalists - that you need something analogous to banks in a communist society - but when challegened to substantiate this claim they have singularly failed to do so.



Decisions would still have to be made about the allocation of productive resources. This takes work, and it takes expertise.
.

Of course. But this does not require banking or insurance. Such occupations only pertain to a system of sectional/private ownership of the means of production and where you have money



This work will be considerably redistributed to workers, but that would mean those workers have to do more work - not necessarily a bad thing, but something we can't dismiss..


No, they would need to do considerably less precisely becuase they will be unencumbered by a system of monetary accounting. You seem to forget that even in capitalism monetary accounting exists alongside calculation in kind. No society can operate without calculation in kind. Try to imagine what would happen if, say, a supermarket today dispensed with actually physically counting its stock on the shelves. It would have absolutely no clue about how much more stock to order or when to order it. Calculation in kind goes on all the time in capitalism today as it must. This is not some new function that needs to be introduced into a post revolutionary society. Rather, such a society simply diespenses with monetary accounting while retaining calculation in kind



I think though that we would still retain analytical specialists, though their social role would be considerably different. (In a sense this is the main difference between capitalist and socialist societies)..

whaaaaat? The main difference between capitalist and socialist societies is the "social role" of "analytical specialists". Please tell me you are only jesting here...



Likewise, most of the insurance industry would disappear, but not all of it. There's still work to be done in filtering out fraudulent insurance claims.)

How is it even meaningful to talk of insurance claims when you have free access to the goods and services you and your fellow human beings have produced in the first place. You are not talking about real socialism here. You are talking about some form of capitalism , arent you?



Moreover, considerably more labour would be required in other fields as socialist societies begin to address needs unaddressed in capitalist ones. This is especially true in education and healthcare, but they're not the only places.


You have gotta be kidding. I can speak with some authority here becuase prior to moving to Spain I worked in the NHS in the UK caring for individuals with severe learning disabilities. In the course of becoming qualified I became the team leader of a house caring for 4 clients, And guess what - almost all of my time was taken up with purely money related business. Negotiating with the authorities about various disability allowances, constantly checking the petty cash tin, auditing the books, having to juggle things with supporter workers in organising rotas so as to ensure everyone got a fair slice of the lucrative unsocial work hours where you were paid time and a half. I can tell you it was a bloody nightmare trying to operate a "business model" of healthcare . The stress was unimaginmable. Somewhere in the middle of all that mess , we lost of sight of what really mattered

[jake williams]

How do you figure this out? Exactly what work do banks and insurance companies do that would still need to be done in a moneyless society of free access to goods ansd service. Ive heard this same argument from anarcho capitalists - that you need something analogous to banks in a communist society - but when challegened to substantiate this claim they have singularly failed to do so. ... Of course. But this does not require banking or insurance. Such occupations only pertain to a system of sectional/private ownership of the means of production and where you have money
The financial sector carries out substantial planning functions. These wouldn't go away in a socialist society, as long as we're talking about a socialist society which is an advanced industrial society. This planning takes work.


No, they would need to do considerably less precisely becuase they will be unencumbered by a system of monetary accounting. You seem to forget that even in capitalism monetary accounting exists alongside calculation in kind. No society can operate without calculation in kind. Try to imagine what would happen if, say, a supermarket today dispensed with actually physically counting its stock on the shelves. It would have absolutely no clue about how much more stock to order or when to order it. Calculation in kind goes on all the time in capitalism today as it must. This is not some new function that needs to be introduced into a post revolutionary society. Rather, such a society simply diespenses with monetary accounting while retaining calculation in kind
I'm really not sure what your point is. Decisions about the allocation of productive resources are extremely complex decisions. They don't cease to be so in a society without money.


whaaaaat? The main difference between capitalist and socialist societies is the "social role" of "analytical specialists". Please tell me you are only jesting here...
Thank you for totally missing a subtle point. The structural difference between capitalist economics and socialist economics is that in a socialist society, producers control decisions about the allocation and use of productive resources. Thus analytical specialists are relegated to a subordinate role, rather than dominating production for their own private profit.


How is it even meaningful to talk of insurance claims when you have free access to the goods and services you and your fellow human beings have produced in the first place. You are not talking about real socialism here. You are talking about some form of capitalism , arent you?
You wouldn't have a banking or insurance industry per se, but you would have analogous functions. The private health insurance industry makes planning decisions about health care that still have to be made. There are finite resources available for healthcare, and they have to be distributed. Frankly, your obsession with anti-planning reeks of the privatization, rather than the socialization, of decisions about production, a privatization itself which tends much more towards "market socialism" or capitalism than anything I could suggest.


You have gotta be kidding. I can speak with some authority here becuase prior to moving to Spain I worked in the NHS in the UK caring for individuals with severe learning disabilities. In the course of becoming qualified I became the team leader of a house caring for 4 clients, And guess what - almost all of my time was taken up with purely money related business. Negotiating with the authorities about various disability allowances, constantly checking the petty cash tin, auditing the books, having to juggle things with supporter workers in organising rotas so as to ensure everyone got a fair slice of the lucrative unsocial work hours where you were paid time and a half. I can tell you it was a bloody nightmare trying to operate a "business model" of healthcare . The stress was unimaginmable. Somewhere in the middle of all that mess , we lost of sight of what really mattered
The point is that we'll actually provide more services in many sectors, especially compared to the status quo globally. In education it's more than plausible that a socialist society would want smaller class sizes and thus more teachers. Likewise, there are all sorts of healthcare services which generally are not provided, and which we would want to provide. Superfluous labour would be reduced, but my point is that it's not clear how the two would balance out.

[robbo203]

The financial sector carries out substantial planning functions. These wouldn't go away in a socialist society, as long as we're talking about a socialist society which is an advanced industrial society. This planning takes work..

Again I have to press you on this point - what specifically do banks and insurance companies actually do that would be required to be done in a moneyless free access socialist/communist society? It is not good enough to say simply that they carry out "substantial planning functions" . That is far too vague. What are these specific functions that are not done by production businesses themselves that require banks and insurances companies to do?



I'm really not sure what your point is. Decisions about the allocation of productive resources are extremely complex decisions. They don't cease to be so in a society without money...

I didnt say they are not complex but their complexity is massively excarbated by their entanglement at every point with a system of monetary accounting that exists alongside calculation in kind today



Thank you for totally missing a subtle point. The structural difference between capitalist economics and socialist economics is that in a socialist society, producers control decisions about the allocation and use of productive resources. Thus analytical specialists are relegated to a subordinate role, rather than dominating production for their own private profit....

Who are these "analytical specialists" you speak of and what exactly is their purpose





You wouldn't have a banking or insurance industry per se, but you would have analogous functions. The private health insurance industry makes planning decisions about health care that still have to be made. There are finite resources available for healthcare, and they have to be distributed. Frankly, your obsession with anti-planning reeks of the privatization, rather than the socialization, of decisions about production, a privatization itself which tends much more towards "market socialism" or capitalism than anything I could suggest.

....

Once again, spit it out - what are these "analogous functions" that banks and insurance companies do that would have to be done in a moneyless socialist-communist society. You keep saying this but you provide not an iota of evidence to support your claim.

Frankly, you do not understand how capitalist industry operates and this is demonstrated by your daft remark that I am "anti-planning". I am not anti planning. I am simply saying that a communist-socialist society will not have to plan to produce goods for sale on a market with to profit and therefore will not require an apparaus that makes this possible - including the banking and insurance sectors - which arose in response to the needs of capitalism and the circulation of money capital and NOT in response to meeting human needs. You are talking loosely about "planning" per se without considering what is the purpose of such planning. Some planning is useful from the point of view of meeting human needs; other planning is emphatically not and will not be needed is a society that is solely concerned with meeting human needs





The point is that we'll actually provide more services in many sectors, especially compared to the status quo globally. In education it's more than plausible that a socialist society would want smaller class sizes and thus more teachers. Likewise, there are all sorts of healthcare services which generally are not provided, and which we would want to provide. Superfluous labour would be reduced, but my point is that it's not clear how the two would balance out.

Of course. All this is not in doubt. But the point is that all the extra labour that would be required to properly meet human needs will come essentially from the literally massive amounts of socially useless labour performed today - represented by occupations like banking and insurance and numerous others - which will completely cease to continue in a communist-socialist society - which labour (and resources) will be then freed up for socially useful production. In such a society in other words, we will be able to produce much more with much less from an overall resource/labour perspective

[jake williams]

Again I have to press you on this point - what specifically do banks and insurance companies actually do that would be required to be done in a moneyless free access socialist/communist society? It is not good enough to say simply that they carry out "substantial planning functions" . That is far too vague. What are these specific functions that are not done by production businesses themselves that require banks and insurances companies to do? ... Once again, spit it out - what are these "analogous functions" that banks and insurance companies do that would have to be done in a moneyless socialist-communist society. You keep saying this but you provide not an iota of evidence to support your claim.

Banks do a few things. They hold safety deposit boxes to protect people's personal belongings and paper currency. They maintain systems of digital payments, debit cards, etc.

They also provide consumer credit, which is a much bigger part of their business than safety deposit boxes or debit cards. Most importantly though, they make decisions about the allocation of productive resources, via the mechanism of distribution of credit to business. Decisions about the allocation of productive resources are made by private individuals and by financial firms, but it's a central part of what investment banks in particular do. Banks aren't going to continue to exist as banks, but the socialist planning that will replace the procedures of capitalist planning will require labour. Yes, socialist planning is more labour efficient than capitalist planning (aside, of course, from the fact that it's simply preferable to plan for human need). But it still takes work.

I'm not exactly sure if you're not playing dumb, or if you really don't understand that people in society make decisions about the allocation of productive resources. It's kind of hard to come up with examples of decisions about the allocation of productive resources, for the same reason it would be hard to give examples of "a thing", "a person", or "an idea" - when someone doesn't understand, it's difficult to be sure how abstractly the concept must be explained.

If you will though. Virtually all small businesses require credit from a bank to begin and then to continue their operations (or another financial institution, or a private individual, or a non-finance company, more rarely, all of which are performing the same function). Banks make decisions about who they're going to lend to based on who they expect to make a profit. If you show up asking for money and you have something that bankers expect to make money, they'll lend you money. If you show up and they think you'll lose money, unless they think you have some other way to pay back their money, they probably won't give you a loan. This mechanism, and similar mechanisms, are one of the main ways that decisions are made about where productive resources go.

A bank could be given the option of lending money to a store selling coffee or a store selling tea. If there's no market for tea, they're more likely to lend to coffee. A private investor could be given the option of investing in movie X or movie Y. Their decision is generally based on their expectation of profit, and so they're going to invest in the movie they think will do well. I don't like any of these examples because the real world of finance is more complex, but again, this is the basic mechanism by which a whole class of decisions about the allocation of productive resources is made in a capitalist society. I don't think it's the right one, mainly because I don't think we should be planning based on the production of profit for capitalists, but if we want to get rid of it, we need some mechanism to replace it.

A socialist society is still going to make movies. Movies require resources to make. Someone has to make the decision about which movie gets to use scarce productive resources (studios, cameras, etc.), and that decision takes effort. It can be done centrally by a state planner, it can be done by a bank, it can be done by an individual billionaire, it can be done by whomever, but it has to be done, and that decision takes non-trivial time and effort.

Likewise, a socialist society is going to produce airplanes. Someone has to decide how many are made. Someone has to balance the costs of producing and consuming airplanes against the desires of people to have airplanes. Price mechanisms, and the decisions of those who manage them, provide some information - capitalist firms don't build a random number of airplanes, they build planes based on how many they think they can profit from selling (generally speaking).

A socialist society will have to decide how to produce electricity. This can be done based on what's profitable, which I think is a horrible way to make the decision, but it's not a trivially simple decision. Capitalist planners deciding how to produce electricity for profit make highly technical decisions about complex distribution networks, different input costs in different markets, different tax and subsidy policies, and so on. Many of these complexities disappear in a socialist society, but new ones arise. Capitalist planners by and large can act with relative disregard to environmental concerns, concerns of the poor, market externalities, and so on. Accounting for these requires more work on the part of socialist planners, not less.


Who are these "analytical specialists" you speak of and what exactly is their purpose
In capitalist societies, society is controlled by those who make decisions about the allocation of productive resources in order to accumulate private profit. In finance capitalism in particular, these tasks shift substantially to those in the finance industry, people who have advanced technical knowledge. My point is that socialist planning requires advanced technical knowledge (again, assuming that by "socialism" you don't mean neo-feudalism), but that those with advanced technical knowledge about the economy don't dominate the society and don't/can't use their knowledge to organize the economy such that they, personally, accumulate private profit at the expense of others. The fundamental difference between a capitalist and a socialist society is that in the former, decisions about productions are dominated by a minority, but that in the latter, any useful technical skills of said minority will not dominate the society, whose productive decisions are made and controlled by the working class.


Frankly, you do not understand how capitalist industry operates and this is demonstrated by your daft remark that I am "anti-planning". I am not anti planning. I am simply saying that a communist-socialist society will not have to plan to produce goods for sale on a market with to profit and therefore will not require an apparaus that makes this possible - including the banking and insurance sectors - which arose in response to the needs of capitalism and the circulation of money capital and NOT in response to meeting human needs. You are talking loosely about "planning" per se without considering what is the purpose of such planning. Some planning is useful from the point of view of meeting human needs; other planning is emphatically not and will not be needed is a society that is solely concerned with meeting human needs
Is there some abstract reason that planning for human needs is simpler, as a computational problem, than planning for the production of private profit?


In such a society in other words, we will be able to produce much more with much less from an overall resource/labour perspective
I don't doubt this, and no one who is a socialist would. My point was and is simply that people naively overestimate how much this can be done, especially in the near term.

[ar734]

well, slaves used to work 24/7 their entire lives; serfs worked 3 days a week for their landlords; 19th century workers' hours were 12/day; later in the 19th century the workday was shortened to 10hr; then 8 in 20th; i don't see why the hours in the workday are somehow set in stone.

[Sasha]

also, the shorter the workday, the higher the productivity...
for any job where the employee sets the pace (i.e. anything but an productionline) it makes in general no diffrence wheter you work an 6, 8 or 12 hours shift, you get about the same amount of work done, and the shorter the work day the less sloppy done.

[robbo203]

Banks do a few things. They hold safety deposit boxes to protect people's personal belongings and paper currency. They maintain systems of digital payments, debit cards, etc.

They also provide consumer credit, which is a much bigger part of their business than safety deposit boxes or debit cards. Most importantly though, they make decisions about the allocation of productive resources, via the mechanism of distribution of credit to business. Decisions about the allocation of productive resources are made by private individuals and by financial firms, but it's a central part of what investment banks in particular do. Banks aren't going to continue to exist as banks, but the socialist planning that will replace the procedures of capitalist planning will require labour. Yes, socialist planning is more labour efficient than capitalist planning (aside, of course, from the fact that it's simply preferable to plan for human need). But it still takes work.

I'm not exactly sure if you're not playing dumb, or if you really don't understand that people in society make decisions about the allocation of productive resources. It's kind of hard to come up with examples of decisions about the allocation of productive resources, for the same reason it would be hard to give examples of "a thing", "a person", or "an idea" - when someone doesn't understand, it's difficult to be sure how abstractly the concept must be explained.

If you will though. Virtually all small businesses require credit from a bank to begin and then to continue their operations (or another financial institution, or a private individual, or a non-finance company, more rarely, all of which are performing the same function). Banks make decisions about who they're going to lend to based on who they expect to make a profit. If you show up asking for money and you have something that bankers expect to make money, they'll lend you money. If you show up and they think you'll lose money, unless they think you have some other way to pay back their money, they probably won't give you a loan. This mechanism, and similar mechanisms, are one of the main ways that decisions are made about where productive resources go.

A bank could be given the option of lending money to a store selling coffee or a store selling tea. If there's no market for tea, they're more likely to lend to coffee. A private investor could be given the option of investing in movie X or movie Y. Their decision is generally based on their expectation of profit, and so they're going to invest in the movie they think will do well. I don't like any of these examples because the real world of finance is more complex, but again, this is the basic mechanism by which a whole class of decisions about the allocation of productive resources is made in a capitalist society. I don't think it's the right one, mainly because I don't think we should be planning based on the production of profit for capitalists, but if we want to get rid of it, we need some mechanism to replace it.



A socialist society is still going to make movies. Movies require resources to make. Someone has to make the decision about which movie gets to use scarce productive resources (studios, cameras, etc.), and that decision takes effort. It can be done centrally by a state planner, it can be done by a bank, it can be done by an individual billionaire, it can be done by whomever, but it has to be done, and that decision takes non-trivial time and effort

Likewise, a socialist society is going to produce airplanes. Someone has to decide how many are made. Someone has to balance the costs of producing and consuming airplanes against the desires of people to have airplanes. Price mechanisms, and the decisions of those who manage them, provide some information - capitalist firms don't build a random number of airplanes, they build planes based on how many they think they can profit from selling (generally speaking).

A socialist society will have to decide how to produce electricity. This can be done based on what's profitable, which I think is a horrible way to make the decision, but it's not a trivially simple decision. Capitalist planners deciding how to produce electricity for profit make highly technical decisions about complex distribution networks, different input costs in different markets, different tax and subsidy policies, and so on. Many of these complexities disappear in a socialist society, but new ones arise. Capitalist planners by and large can act with relative disregard to environmental concerns, concerns of the poor, market externalities, and so on. Accounting for these requires more work on the part of socialist planners, not less.


In capitalist societies, society is controlled by those who make decisions about the allocation of productive resources in order to accumulate private profit. In finance capitalism in particular, these tasks shift substantially to those in the finance industry, people who have advanced technical knowledge. My point is that socialist planning requires advanced technical knowledge (again, assuming that by "socialism" you don't mean neo-feudalism), but that those with advanced technical knowledge about the economy don't dominate the society and don't/can't use their knowledge to organize the economy such that they, personally, accumulate private profit at the expense of others. The fundamental difference between a capitalist and a socialist society is that in the former, decisions about productions are dominated by a minority, but that in the latter, any useful technical skills of said minority will not dominate the society, whose productive decisions are made and controlled by the working class..


I think we can agree on one thing at least - the great bulk of what banks do in terms of effort expended is completely socially useless, even presumably from your point of view, and will have no place in a future moneyless socialist society. Im talking here about things like maintaining accounts for millions of customers, providing mortgages, offering chequeing facilities, operating as central banks in the issue of currency and so on and so forth. The remainder of what banks do as financial intermediaries, and where in fact the disagreement between us arises, is in respect of the role of banks in making "decisions about the allocation of productive resources, via the mechanism of distribution of credit to business" as you put it. As I understand it, what you are saying is that in a socialist society something similar or analogous to what banks do today in capitalism will have to be done in a socialist society

Now lets just clear up one thing: of course , decisions have to be made in a moneyless socialist society about the allocation of resources that will involve planning, even elaborate plannning , taking into account all of the factors concerned. I have never denied this. But this is not the point, is it? The point is - do banks do something analogous to what would need to be done in a socialist society in making "decisions about the allocation of productive resources, via the mechanism of distribution of credit to business". I would say, no, they dont. Note that I am not saying that decisions about the allocation of productive respources do not need to be taken in a socialist society which seems to be the wholly incorrect inference you have drawn about my position. I am saying specifically what banks do in relation to such decisionmaking will not need to be done. Thats quite a different proposition

Let me explain this to you in more detail. You say

"Banks make decisions about who they're going to lend to based on who they expect to make a profit. If you show up asking for money and you have something that bankers expect to make money, they'll lend you money. If you show up and they think you'll lose money, unless they think you have some other way to pay back their money, they probably won't give you a loan. This mechanism, and similar mechanisms, are one of the main ways that decisions are made about where productive resources go."


First of all, note what you are saying here. An entrepeneur approaches a bank for a loan. The bank agrees if it can be demonstarted that the entrepeneur can expect to make a profit. After all the bank would not want the entrepeneour to default by going bankrupt. But I have to ask - would the entrepeneur be approaching the bank at all if he or she did not reasonably expect to make a profit in the first place? Of course, in capitalism expectation of profit is based on hunches and quesswork mainly. Past experiences provide a rough guide but can never be completely reliable. But the simple point I am making is that decisions about the allocation of resoruces in the expectation of profit are by no means confined to banks but in the first instance are carried out by entrepenours themselves who then approach banks for a loan. So we are talking here basically of a duplication of effort.


You might want to argue that the process of applying for commercial credit from a bank makes for a more rigorous approach to the allocation of resoruces than would otherwise be the case - even if banks can and sometimes do get things spectacularly wrong. However, what you cannot reaonably maintain is that decisions relating to the allocation of resources in a capitalist society lie with banks alone or that banks alone undertake the necessary assessment in capitalism concerning whether an enterprise can expect to make a profit or not. They dont. Indeed in theory and sometimes in practice an entrepeneur with sufficient private resources at his or her disposal can simply bypass the banking system as set up a business one his or her own. But you wouldnt say in such instances that no decisions has been made concerning how to allocate resources in the expectation of profit, would you? Of course not.

Secondly and perhaps even more tellingly, what does it actually mean when we say banks make decisions about lending money to businesses based on the expectation of profit. Profit, loosely speaking, is the differences between a firm's revenue and its costs, It is what is called net income. Now, net income implies a common unit of accounting by means of which different factors of production can be made commensurable and by which costs can be measuresd against revenue streams as an indication of profitability. In other words the notion of net oncome implies the existence of money,

Your mistake, I think, is to confuse the form and the substances of what capitalist institutiuons like banks actually do. What banks actually do is assess the probaility of a enterprise making a profit and lend money to said enterprise on that basis. They are not engaging in some kind of technical exercise to objectively determine in some supra-historical sense what is the most rational allocation of resources. What banks deem efficient or profitable does not signify in itself that resources are being rationally allocated as such. All it means is that said resources are being rationally allocated from the point of view of ensuring an enterprises profitability

In a socialist society the concept of net income will lose all meaning. Thisd is becuase there will be no common unit of accounting - money. Money arose to faciliate exchange and not becuase it served as some kind of technical tool to facilitate "planning" and advance human wellbeing . Money is essentially a social relationship. In a moneyless socialist society What you will have instead is simply calculation in kind which today exists alongside monetary accounting but in a socialist society will exist on its own without monetary accounting.

The very rationale for banking is bound up with , and predicated on, the notion of net income. This is why I say you could not be more wrong in thinking that banks perform something that is analogous to what would need to be done in a moneyless socialist society. Not at all. Nothing of what banks do today will be required to be done in a socialist society and that is why I contend that the whole of the banking system in its entirety cpounts as a completely socially useless labour, the need for which which will disappear in a socialist society altogether




Is there some abstract reason that planning for human needs is simpler, as a computational problem, than planning for the production of private profit?.

Absolutely. This stems from the simple fact that all around us today we see the operation of calculation in kind and without which no advanced modern industrial society could survive for even a single day. Calculation in kind however coexists today with monetary accounting which massively complicates the planning process in all sorts of ways, as you know. Logically then, the elimination of monetary accounting from the picture will most certainly ease the computational problem of planning for human needs. Why not?



I don't doubt this, and no one who is a socialist would. My point was and is simply that people naively overestimate how much this can be done, especially in the near term.


I think the far greater problem is people naively underestimating just how vast the sprawling phenonenom of capitalisms structural waste actually is. It is huge and confronts us everywhere we turn. Yes, socialism will require more labour to do some things than are done in a capitalist society. I havent denied this. What I have said that the labour to do these things will come from the socially useless labour - like banking and hundreds of other such occupations - freed up as a result of the elimination of capitalism. I am not saying that people will neccesarily work for a tiny fraction of the time they work under capitalism. What I am saying is that all the work that people will do will be socially useful whereas today only a minority of this work is socially useful. Thats the difference

A small example. A few weeks ago I drove to France from southern Spain (where I live). I had to take the autovia from Valencia to the border because time was short and the alternative route was crammed with lorries and, in any case, I didnt fancy holing up in some dingy motel for the night . Its an expensive option though because the autovia is a "peaje" route - a toll road - and there must have been at least a dozen tolls between Valencia and the border (I joined the autovia at Valencia having come cross country but there are more tolls further west and south) . In all it cost me 50-60 euros. These tolls are massive structures that span tthe entire breadth of the motorway . They are each manned 24/7 by - I dont know - lets say 15-20 people including perhaps the odd Guardia civil on the lookout for contraband and the like. You settle into the usual motorway routine and then suddenly round the bend another bleedin toll appears to inconveniently disrupt your routine as you fumble in the dark for some loose change.

It makes you think - what an utterly insane way of running a transport system. What a waste of resources - human and material - and for what end? Oh yes, the capitalist apologists will trot out their usual apologias for capitalism - that it helps to raise revenue which is then ploughed back into the maintenance of of the motoeway itself. But this is to totally miss the point, It is totally arguing from within a perspective that is predicated on capitalism itself and is unable to step outside that perspective and look at the system objectively so to speak

This is my point - you cannot really get an idea of the true extent of capitalism's structural waste unless and until you begin from the vantage point of a society that is solely motivated by the desire to meet human needs rather than sell commodities on a market with a view to profit