ComradePonov
4th August 2011, 19:17
Market Socialism:
A Solution to the So Called Problems of a Centrally Planned Economy
There is a sense in which socialism is thought by some to be unworkable. “Even if you were to build it under affluent conditions, how could you possibly run a complex modern economy without markets?” Since Liberals, Conservatives, and so called “protectors of freedom” are too deluded with their own definition of reality to accept a legitimate solution to this non-existent problem, I (this system was not invented by me) will propose a plan in which socialism can operate alongside the market.
The answer, for a growing number of Marxists, including myself, is that you don’t need to. In this system, markets would remain an integral part of a socialist economy. So-called market socialism envisages a future in which the means of production would be socially owned, but where self-governing cooperatives would compete with one another in the marketplace. In this way, some of the virtues of the market could be retained, while some of its vices could be shed.
At the level of individual enterprises, cooperation would ensure increased efficiency, since the evidence suggests that it is almost always as efficient as capitalist enterprise and often much more so. At the level of the economy as a whole, competition ensures that the informational, allocation and incentive problems associated with the traditional Stalinist model of central planning do not arise.
It is my opinion that Marx himself was a market socialist, at least in the sense that he believed that the market would linger on during the transitional period following a socialist revolution. He also considered that markets had emancipator as well as exploitative individuals, helping to free men and women from their previous dependence on lords and masters.
To fellow socialists who say; “How will this model prevent the rise of man-made shortages as an incentive to create profit?”
It is important to keep in mind that under market socialism, markets are by no means specific to Capitalism. Even Trotsky supported the market, though only in the period of transition to socialism and in combination with economic planning. It was needed, he thought, “as a check on the adequacy and rationality of planning, since economic accounting is unthinkable without market relations.”
Market Socialism does away with private property, social classes and exploitation. It also places economic power into the hands of the actual producers. In all of these ways, it is an advance on a capitalist economy. Still, however, I continue to sense a strong opposition amongst the left who claim “it retains too many features of that system which is to be destroyed in the revolution.” If you are still not convinced, read on.
Under market socialism there would still be commodity production, inequality, unemployment and the sway of market forces beyond human control, yes, this I do admit. However, workers would never simply be transformed into collective capitalists, maximising their profits, cutting quality, ignoring social needs and pandering to consumerism in the drive for profit. This is because education and state monitoring will diminish these dangers. Resource would be allocated by negotiations between producers, consumers, environmentalists and other relevant parties, in the networks of workplace, neighbourhood and consumer councils. The broad parameters of the economy, including decisions on the overall allocation of resources, rates of growth and investment, energy, transport, and ecological policies and the like, would be set by representative assemblies at local, regional and national levels. These general decisions about, say, allocation would then be devolved downwards to a regional and local level, where more detailed planning would be progressively worked out. At every stage, public debate over alternative economic plans and policies would be essential. In this way, what and how we produce could be determined by social need rather than private profit. Under Capitalism, we are deprived of the power to decide whether we want to produce more hospitals or more breakfast cereals. Under Socialism, this freedom would be regularly exercised.
Power in such assemblies would pass by democratic election from the bottom up rather than from the top town. Democratically elected bodies representing each branch of commerce or production would negotiate with a national economic commission to achieve an agreed set of investment decisions. Prices would be determined not centrally, but by production units on the basis of input from consumers, users, interest groups and so on. Goods which are of vital concern to the community, such as food, health, education, transport, energy, and the media, need to be brought under democratic public control, since those who run them tend to behave antisocially if they have the chance to make enlarged profits. Less socially indispensable goods, however, such as luxury products could be left to the operations of the market.
To Capitalists who cry on and on about how “everyone would be awarded equally for the same amount of work, despite differences of talent, training and occupation.”
How this limits the system proposed is beyond me. As Michael Albert puts it, “The doctor working in a plush setting with comfortable and fulfilling circumstances earns more than the assembly worker working in a horrible din, risking life and limb, and enduring boredom and denigration, regardless of how long or how hard each works.” There is, in fact, a strong case for paying those who engage in boring, heavy, dirty or dangerous work more than, say, medics or academics whose labours are more rewarding and not necessary for the survival of the economy. Much of this dirty and dangerous work could perhaps be carried out by former members of the royal family. We need to reverse our priorities indeed!
A Solution to the So Called Problems of a Centrally Planned Economy
There is a sense in which socialism is thought by some to be unworkable. “Even if you were to build it under affluent conditions, how could you possibly run a complex modern economy without markets?” Since Liberals, Conservatives, and so called “protectors of freedom” are too deluded with their own definition of reality to accept a legitimate solution to this non-existent problem, I (this system was not invented by me) will propose a plan in which socialism can operate alongside the market.
The answer, for a growing number of Marxists, including myself, is that you don’t need to. In this system, markets would remain an integral part of a socialist economy. So-called market socialism envisages a future in which the means of production would be socially owned, but where self-governing cooperatives would compete with one another in the marketplace. In this way, some of the virtues of the market could be retained, while some of its vices could be shed.
At the level of individual enterprises, cooperation would ensure increased efficiency, since the evidence suggests that it is almost always as efficient as capitalist enterprise and often much more so. At the level of the economy as a whole, competition ensures that the informational, allocation and incentive problems associated with the traditional Stalinist model of central planning do not arise.
It is my opinion that Marx himself was a market socialist, at least in the sense that he believed that the market would linger on during the transitional period following a socialist revolution. He also considered that markets had emancipator as well as exploitative individuals, helping to free men and women from their previous dependence on lords and masters.
To fellow socialists who say; “How will this model prevent the rise of man-made shortages as an incentive to create profit?”
It is important to keep in mind that under market socialism, markets are by no means specific to Capitalism. Even Trotsky supported the market, though only in the period of transition to socialism and in combination with economic planning. It was needed, he thought, “as a check on the adequacy and rationality of planning, since economic accounting is unthinkable without market relations.”
Market Socialism does away with private property, social classes and exploitation. It also places economic power into the hands of the actual producers. In all of these ways, it is an advance on a capitalist economy. Still, however, I continue to sense a strong opposition amongst the left who claim “it retains too many features of that system which is to be destroyed in the revolution.” If you are still not convinced, read on.
Under market socialism there would still be commodity production, inequality, unemployment and the sway of market forces beyond human control, yes, this I do admit. However, workers would never simply be transformed into collective capitalists, maximising their profits, cutting quality, ignoring social needs and pandering to consumerism in the drive for profit. This is because education and state monitoring will diminish these dangers. Resource would be allocated by negotiations between producers, consumers, environmentalists and other relevant parties, in the networks of workplace, neighbourhood and consumer councils. The broad parameters of the economy, including decisions on the overall allocation of resources, rates of growth and investment, energy, transport, and ecological policies and the like, would be set by representative assemblies at local, regional and national levels. These general decisions about, say, allocation would then be devolved downwards to a regional and local level, where more detailed planning would be progressively worked out. At every stage, public debate over alternative economic plans and policies would be essential. In this way, what and how we produce could be determined by social need rather than private profit. Under Capitalism, we are deprived of the power to decide whether we want to produce more hospitals or more breakfast cereals. Under Socialism, this freedom would be regularly exercised.
Power in such assemblies would pass by democratic election from the bottom up rather than from the top town. Democratically elected bodies representing each branch of commerce or production would negotiate with a national economic commission to achieve an agreed set of investment decisions. Prices would be determined not centrally, but by production units on the basis of input from consumers, users, interest groups and so on. Goods which are of vital concern to the community, such as food, health, education, transport, energy, and the media, need to be brought under democratic public control, since those who run them tend to behave antisocially if they have the chance to make enlarged profits. Less socially indispensable goods, however, such as luxury products could be left to the operations of the market.
To Capitalists who cry on and on about how “everyone would be awarded equally for the same amount of work, despite differences of talent, training and occupation.”
How this limits the system proposed is beyond me. As Michael Albert puts it, “The doctor working in a plush setting with comfortable and fulfilling circumstances earns more than the assembly worker working in a horrible din, risking life and limb, and enduring boredom and denigration, regardless of how long or how hard each works.” There is, in fact, a strong case for paying those who engage in boring, heavy, dirty or dangerous work more than, say, medics or academics whose labours are more rewarding and not necessary for the survival of the economy. Much of this dirty and dangerous work could perhaps be carried out by former members of the royal family. We need to reverse our priorities indeed!