A Socialist Economy

[dogwoodlover]

What style economy should a socialist country operate under?

I suspect many people here would advocate for a planned economy (as would I). But how would it run? Would economic decisions be made by workers' councils? parliaments? economic councils?

I suppose that for myself this areas seems to be a little fuzzy, so I'm curious as to what kind of alternatives to the free market system do people advocate here.

For me, I would think something along the lines of planning based on the decisions of workers' councils, with the plans perhaps being drawn up by regional economic councils.

I'm more or less thinking out loud here, and I'd just like to hear people's ideas.

[BobKKKindle$]

A Socialist economy would be planned. However, it would not be planned in the way that was undertaken in the Soviet Union, where a non-democratic class of economic managers chose the commodities that would be produced. Rather, a Socialist Economy would be based on democracy.

An Important aspect of economic socialist democracy would be the change in the organisation and structure of workplaces. Under Captalism, workers are forced to subject themselves to the domination and orders of their managers and the Capitalist. Under Socialism, workplaces would be organised in a democratic manner, with decisions being undertaken by a general assembly or elected Soviet of workers. This would ensure that labour is a fulfilling and empowering experience and not simply a commodity that is exchanged for the ability to purchase and consume goods and services.

These democratic workplaces would then operate in conjunction with Consumers councils at every level of the economy. Through consumer councils, people would be able to signify the commodities that they desire to be produced, and as such scarce economic resources would not be expended on the production of goods that are not considered useful, such as advertising, and production would not enter periods of crisis as under Capitalism.

[Dimentio]

Originally posted by [email protected] 16, 2007 09:07 am
What style economy should a socialist country operate under?

I suspect many people here would advocate for a planned economy (as would I). But how would it run? Would economic decisions be made by workers' councils? parliaments? economic councils?

I suppose that for myself this areas seems to be a little fuzzy, so I'm curious as to what kind of alternatives to the free market system do people advocate here.

For me, I would think something along the lines of planning based on the decisions of workers' councils, with the plans perhaps being drawn up by regional economic councils.

I'm more or less thinking out loud here, and I'd just like to hear people's ideas.
Planned economics are inherently inefficient. Either the decisions are made by planners who deprive people from their autonomy due to being in control of the production plans, or by committees which probably would fail to utilise big size benefits.

I prefer energy accounting before command economics.

[Honggweilo]

I think a democratic controled planned economy run by trade unions and workers/popular councils is still the best alternative to free market capitalism. Although i'm also interested in a modern day version of the New Economic Mechanism theory formed under Andropov, like an iniative based controlled economy. having consumer councils/union to give feedback on the demand of the people so that state enterprises can keep up with the needs for commodities. Small and middlesize enterprises should be run by local community or by popular run tradeguilds, so that inovative ideas have the right to bloom, if productive. Also by installing tradeguilds, new ideas and technological improvement can be shared and thus benefiting society, instead of petty competition and company secrecy. By strict state regulation ecological preservation, workers rigths, sufficientcy and equallity can be assured.

Although, comming back on the NEM , the most succefull and productive companies in a certain economic branch should be rewarded by merrit, not by profit. Ofcourse this merrit needs to be given after popular dessicion by consumer councils. This merrit could increase iniative and productivity, but on a equal basis. If productive and overall progressive organisational and economic strategies within productive companies proves to be a succes, it can be made standard, on local/regional basis for other companies in that branch, ofcourse looking at their situation. But this standardization must always be approved by popular vote from the involved organizations and always from a non-commercial eyeview.

Quotas should still be made and subsidizing/merrit for a company within a branch should be based on the realisation of that quota.

[bloody_capitalist_sham]

I think, for this debate to be constructive, we need to define what a planned economy is and what a free market economy is.

Because, theSoviet Union used markets, and EVERY free market economy has a very high degree of planning.

You simple cannot have a modern economy without some degree of planning or markets at the moment.

also, we need to define what an economy must achieve for it to be classed as efficient.

[RGacky3]

Originally posted by [email protected] 19, 2007 04:07 pm
I prefer energy accounting before command economics.
What the hell does that mean?

[Honggweilo]

Originally posted by RGacky3+January 19, 2007 04:52 pm--> (RGacky3 @ January 19, 2007 04:52 pm)
[email protected] 19, 2007 04:07 pm
I prefer energy accounting before command economics.
What the hell does that mean? [/b]
it means that here preferes an energy sufficient economy over a command economy, although i dont see a direct contradiction between the two.

[dogwoodlover]

Originally posted by Serpent+January 19, 2007 04:07 pm--> (Serpent @ January 19, 2007 04:07 pm)
[email protected] 16, 2007 09:07 am
What style economy should a socialist country operate under?

I suspect many people here would advocate for a planned economy (as would I). But how would it run? Would economic decisions be made by workers' councils? parliaments? economic councils?

I suppose that for myself this areas seems to be a little fuzzy, so I'm curious as to what kind of alternatives to the free market system do people advocate here.

For me, I would think something along the lines of planning based on the decisions of workers' councils, with the plans perhaps being drawn up by regional economic councils.

I'm more or less thinking out loud here, and I'd just like to hear people's ideas.
Planned economics are inherently inefficient. Either the decisions are made by planners who deprive people from their autonomy due to being in control of the production plans, or by committees which probably would fail to utilise big size benefits. [/b]
I see no reason why, if people are democratically planning and controlling the economy, that there would be a lack of efficiency.

Most people seem make that argument about the (direct) democratic process in general.



I prefer energy accounting before command economics.


Could you please expound on what that is?

[OneBrickOneVoice]

Cybersyn.

[nizzil]

Have either sides thought to look at a planned economy in practice? When the Soviet Union was a workers state, from 1917-1939, it had the greatest economic success in history. Despite Stalin's botching of the nation's agriculture, his brutal treatment of the new proletarians, his one-sided development, and his allowing inflation to undermine precision, the Soviet economy during the "third period" (1928-1936) boomed while the Imperialist world was in a depression. Today people marvel at the "miracle of the Chinese economy," of China's 9% yearly growth rates. However, during every year of the third period the Soviet economy grew by over 30% (and at times exceeding 40%!), a feat not remotely approached for a single year in any other country. The Soviet Union was transformed from the most backward of the world powers into the world's second economic powerhouse in the course of a decade. Even when other countries have experienced such growth, albeit over a much greater period of time, it has been chiefly threw economic expansion - the Soviet Union, on the other hand, was isolated from the entire world economy. For those who point to Stalin's brutal treatment of the peasants and workers, and of his slave labor camps, it is important to ask why such measures have never led to anything remotely close to the economic success experienced in the Soviet Union during its period of centralized planning and heavy industrialization.

The goal of any planned economy is to overcome the law of value, to overcome scarcity and its influence in society. However, to do so in any country requires a great increase in the productivity of labor -- something which can only be achieved through the socialization and mechanization of people's productive power. However, the Stalinist bureaucracy compromised this in the Soviet Union. With the failure of forced collectivization, which had really been a collectivization of backwardness, peasants were given private plots of land which soon came to consume much of the productive energy. With the crushing of the unions and of working class participation in planning, and with Stalin's undermining of planning through inflation, the law of value soon had the still backwards Soviet economy by the throat.

In any of the world's imperialist powers today, especially the United States, a planned economy would be infinitely more successful. The Bolsheviks inherited an economy that was still fundamentally pre-capitalist, and yet had amazing success in catching up to its imperialist rivals. However, a socialist economy can only be achieved by increasing productive levels above that which currently exist even in the most developed capitalist countries - that is the point of the dictatorship of the proletariat. The capitalists go into crises when there is too little scarcity, their property losing too much value and the economy going into a depression. Therefore, only planning can finish the industrial revolution and develop the productive forces to the point where scarcity and the law of value can be overcome.

To understand how much more productive an imperialist economy (we will use the United States as an example) could become under the immediate initiation of a planned economy, we must first understand how underutilized it is today. The United States has the resources to produce even more than it already consumes. And yet, most of what the United States consumes is not produced by its own industry, the most technology advanced and efficient in the world, or by its workforce, which has access to the best infrastructure and training in the world, but in sweat shops in the third world. This is true of all imperialist countries. So why are the least developed parts of the world producing the most under today's economy? It is because the only surplus value that the bourgeoisie gets to see is that produced by labor - not that created by machines. The reason for this is because when a firm is in competition with its rivals, it only considers short term costs to set its prices. Therefore, the price of technology and of the factory is not factored in, but only the wages of the workers (and the cost of raw materials.) Therefore, the more mechanized a factory is, the less short term costs the firm has, and the more it can slash its prices to undercut its rivals. Wage workers, on the other hand, need so much money even to survive. Therefore, there is only so low that prices can drop, and more capitalists stay in business and maintain higher profits. Back in the imperialist world, once one firm finally wins out, forming a monopoly, technology is still a threat. When a capitalist invests in technology, he may pay $1000 and expect that the new technology will produce $100/ month. However, soon both increased productive power in society and general has lowered the price of what the machinery costs, to say $700. Also, with this new, more advanced machinery being used in the market, prices soon fall and therefore the old technology's output no longer equals $100/ month. Due to this problem, it soon becomes very expensive for capitalists to constantly upgrade their machinery. Monopolies do not have this problem. It is not uncommon in modern monopolies to buy up all patents related to the firm's product and to never implement the designs, simply keeping them out of competitors hands.

These combined factors, and many more, keep the United State's economy, and that of other industrialized nations, running well under capacity. If state planning were introduced, especially if done through proletarian democracy, the United States would see an economic boom of its own which would far outshine that of the USSR. While the economy would need resources from all over the world to truly reach socialist level development, a revolutionary United States would run circles around the world economy.

[robbo203]

I think there is a fair bit of waffle here about a "planned economy". Even a so called "free market" involves considerable planning by the numerous individual enterprises interacting in the market place. The issue is not between planning and no planning. This is a false dichotomy. What we are concerned with is whether to have many plans or whether the interactions between these different plans should themselves be planned so that in effect you would have one gigantic plan. This last option is what is classically known as central planning and is usually what is implied when people speak of a planned economy

In its most literal sense central planning - or a planned economy - is a complete logistical impossiblility. There is absolutely no way you can possibly organise in advance the entirety of inputs and outputs along the line of some mega Leontief matrix. You have to allow for some spontaneous interaction between the different production units . Even the slightest peturbation in the economy would have serious knock on consequneces for the central plan assuming it could even be put together in the first place

In this respect a non market communist economy would be a self regulating self ordering economy in the same way that a capitalist market economy is. The difference is that in a communist or socialist economy (they mean the same thing) you would have only calculation in kind and not calculation in terms of market prices

The so called planned economy of the Soviet Union was a state capitalist economy. It had all the classic hallmarks of a capitalist economy enumerated by Marx - commodity production, wage labour, profit and so on - not to mention class division and enormous economic inequalities. The productive achievments of this so called planned economy have tended to be overstated not least becuase the state managers had an incentive to understate the starting point from which they set out to fulfil their quotas.

More importantly even if the "planned economy" hypothesis might have had some validity in the early days of the Soviet Union when the state decided to concentrate on heavy industry and basic infrastrcture and the like; the rigidities in the system gradually begun to make it less and less competitive as the economy strove to diversify more and more particularly after the 1960s. It is little wonder that economic growth began to falter and (with perestroika etc) that the the state should have began to look towards more conventional capitalist forms of organisation as well as open its door more widely to international capital investment But then the Soviet Union was always a capitalist economy from start to finish

Robin
www.worldincommon.org

[phoenixoftime]

A few questions:

1. In a planned, socialist economy, how much use would 'Open Source' -style development, as seen in the computer software industry, be to the entire economy? Would this provide a means to accelerated technological development (everyone building on the best ideas available, rather than trying to 'reinvent the wheel')?

2. Would a socialist planned economy meet the needs of a country better by targeting its resources on more commonly required items? For example, using the resources previously used to produce commodities useful to only a few (i.e. exotic sports cars) to produce more common goods (i.e. many basic saloon cars), and hence reduce dependancy on foreign imports for basic items.

3. Apart from the social effect, what are the economic consequences of either abolishing the wage system completely, or implementing an equal wage system.

Please excuse me if I'm failing to make any sense at all, but I'm still bashing my way through Das Kapital :blush:

[Karl Marx's Camel]

However, during every year of the third period the Soviet economy grew by over 30% (and at times exceeding 40%!),

How do we know for sure that these are in fact correct numbers, and not made up by Stalin-lackeys?

[robbo203]

Originally posted by [email protected] 28, 2007 09:07 am
A few questions:

1. In a planned, socialist economy, how much use would 'Open Source' -style development, as seen in the computer software industry, be to the entire economy? Would this provide a means to accelerated technological development (everyone building on the best ideas available, rather than trying to 'reinvent the wheel')?

2. Would a socialist planned economy meet the needs of a country better by targeting its resources on more commonly required items? For example, using the resources previously used to produce commodities useful to only a few (i.e. exotic sports cars) to produce more common goods (i.e. many basic saloon cars), and hence reduce dependancy on foreign imports for basic items.

3. Apart from the social effect, what are the economic consequences of either abolishing the wage system completely, or implementing an equal wage system.

Please excuse me if I'm failing to make any sense at all, but I'm still bashing my way through Das Kapital :blush:
Hi Nwog

Communism means a society without money, wages, profit, employers and employees. It means a society where the means and instruiments of producing and distributing things are owned in common and as a direct consequence of this, everyone has free unmediated access to goods and services produced by the completely voluntary labour of the population

Marx pointed out in his excellent little panmphlet Wage Labour and Capital that wage labour presupposes capital and vice versa. Equal wages dioes not do away with the capitalist system; it is a procrustean attempt to force capitalism to operate in ways that contradict its inhernet law of value and is therefore doomed to failure. In the state capitalist system of the Soviet Union the Bolsheviks started out with good intentions of trying to minimise wage differentials. Under Stalin what emerged was one of the most unequal societies on the the face of the earth!

Marx urged the workers movement to incribe on their banner the revolutionary watchword "abolition of the wages system". He did not advocate a system of equal wages.

You ask about the economic consequences of a communist system of production. I believe they will be enormous. I will leave you with just one example to consider

Today about 50-60% of all economic effort in the formal sector of most industrialised economies is actually socially unproductive - it doesnt produce anything of real value to human welfare. Im talking about occupations like banking, insurance, tax consultancies, most advertising, ticket collecting, armaments production. security guards etc etc. All this unproductive activity does is to oil the wheels of the capitalist economy ; it is to service the systemic needs of the system itself.

In communism all of this unproductive activity will disappear. There will simply be no need for it! In a moneyless society of free access to goods and services what need is there for a banking system, for example? Not only is all this activity unproductive it also absorbs a huge amount of the output of the productive aspects of the present economy. Thus banks require often lavish buildings and hi-tech computer equipment.

With all this unproductive activity gone in communism we will have a greatly enhanced capacity to direct labour and resoruces into producing useful wealth. That is an enormous advantage that communism has over capitalism although it is often overlooked - possibly because many people still have only a hazy idea of what communism will entail. For example they often confuse it with state capitalism

Might I recommend two pamphlets to you produced by the WSM (www.worldsocialism.org)

They are

"Socialism as a practical alternative"
"How we live and how we might live"

Both these pamhlets fo into some detail about what I have said above

Regards

Robin
www.worldincommon.org

[The Grapes of Wrath]

Anyone have any opinions on Hungary and the former Yugoslavia's respective economies?

Its mixture of market and planning was interesting and led to stronger economies than many Soviet sattellite countries, at least I'm pretty sure.

Similar forms of economics were also advocated by the Dubcek government during the "Prague Spring" in the former Czechoslovakia.

Any one think that something similar such ideas might be in store for many countries of the world, especially those closely tied to the market like the United States?

TGOW

[robbo203]

Originally posted by The Grapes of [email protected] 17, 2007 08:18 pm


Its mixture of market and planning was interesting and led to stronger economies than many Soviet sattellite countries, at least I'm pretty sure.


[QUOTE]


Every country has a mixture of market and planning (state intervention). It is only a matter of degree. Hungary and Yugoslavia were variants of capitalism just as much as the USA or the UK, with a greater preponderence of state capitalism than the former. As I suggested elsewhere it is not very helpful to talk of a planned economy as if it were in contradictinction to a market economy. A market economy is full of planning but planning is carried out by individual enterprises. Central planning is the proposal to replace a multitude of plans with a single mega plan

The issue is not so much planning but the economic context in which planning is done. Production for a market - commodity production - is common to both state capitalist countries and so called free market countries.

Communism/socialism replaces production for the market (and wage labour) with production directly for use, free access to goods and services and volunteer labour

Robin
http://groups.yahoo.com/group/worldincommon/

[OneBrickOneVoice]

Originally posted by [email protected] 16, 2007 09:07 am
What style economy should a socialist country operate under?

I suspect many people here would advocate for a planned economy (as would I). But how would it run? Would economic decisions be made by workers' councils? parliaments? economic councils?

I suppose that for myself this areas seems to be a little fuzzy, so I'm curious as to what kind of alternatives to the free market system do people advocate here.

For me, I would think something along the lines of planning based on the decisions of workers' councils, with the plans perhaps being drawn up by regional economic councils.

I'm more or less thinking out loud here, and I'd just like to hear people's ideas.
Planned economies have worked very well in the past. Even bourgieousie sources admit that the Soviet Union was an economic miracle. The PRC for example, in the first 5 years of planned economics, doubled its production rate.

For more advanced economies like say the US today, there could be the "socialist internet" planning, cybersyn, which was a real time internet based system of planning a economy developed in Chile under Allende.

Keep in mind, despite the fact that it is kept under the radar, capitalist-imperialist economies plan as well. Big chain grocery stores for example, use computers similiar to cybersyn to decide where to stock what and in what quantity.