A possible alternative to centralized planning

[Arrin Snyders]

Aaand hello again. While the other thread I started is still quite active I have yet another idea I want to bounce off of the people here.

This time my target is central planning.

Coming form an East European country I have been quite skeptical of the idea of central planning all my life. Everything I have learned about it so far seems to show that it was a very inefficient way of handling an economy in the long run. For this reason when my leftward drift intensified a few months back I rejected the idea of central planning from the start. So at the beginning I was a market socialist.

As I learned more about what Marxism really was I finally understood why it was so important that planning replace the market. While my opinion of central planning had not undergone any change, I was nonetheless forced to find some potentially functional alternative. My first stop was decentralized planning. The basic idea was that local communities know the objective circumstances under which they operate much better than a central government ever could, so they should do the planning themselves. However this model also suffered from some severe drawbacks. For starters it could lead to a fracturing of the economy as a whole, and as someone pointed out this fracture could even solidify along ethnic lines, which is even worse. So this was another possible model sent to the trash can.

I got to the third and current model through contact with members of the Pirate Party. In a different context than our current discussion they reminded me of the way the Internet is governed: the multi-stakeholder model. I realized that this could solve the problem of planning in an elegant manner.

This is how it goes:

At the most basic level you have the workers of a particular economic unit organized in some form of worker's council. For simplicity's sake let's work with factories as an example. So the factory's workers represent the first stakeholder. The local community is the second since their prosperity is closely linked the whatever economic units exist within that community. The third would be the regional government as they would represent the interests of several communities within a particular geographic region. Fourth would be other economic units, regional or national, that directly depend on the outputs of our first stakeholder. Last is the central government. Unlike the factory or the local community it is somewhat disconnected from the realities on the ground, however it can see a much larger picture compared to the relatively limited horizons of the first two stakeholders. Each one of these would get one vote, and would, together set up am economic plan that would attempt to reconcile the interests that exist on the various levels of the economy.

This is not supposed to be a comprehensive list of stakeholders. Likely they would differ somewhat depending on which branch of the economy we're dealing with, but the basic structure would be the same. From a Marxist point of view this seems like a good strategy. The law of value would still be replaced by the law of planning, just that the type of planning would be different from whatever the early Marxists envisioned. It's essentially a system of semi-centralized planning.

It seems more flexible by including a varying number of stakeholders, depending on situation, and by including the players that are directly involved (i.e. the various economic units) in production it can help prevent the subjugation of economic issues to ideology, such as what happened at least in Romania and the USSR (two subjects I'm decently familiar with). In these countries ideological objectives drove the conception of the plan while widespread lying and falsification of records subverted the statistical mechanism that was supposed to guide the creation of the plan. Also, the fact remains that the most local units know best what the situation on the ground is, while the central government can see a wider picture at the cost of losing important data along the way due to errors and inevitably limited ability to process all the information. By giving both central and local levels an equal say in matters (with a slight emphasis on the local) a balance between the two can be struck.

On the down side this system is very complex and possibly quite cumbersome.

This is by no means the definitive version of this system and it is open to change and even getting scrapped completely of the arguments against it are strong enough.

So, what does everyone think of this idea of mine?

[Fourth Internationalist]

Coming form an East European country I have been quite skeptical of the idea of central planning all my life. Everything I have learned about it so far seems to show that it was a very inefficient way of handling an economy in the long run. For this reason when my leftward drift intensified a few months back I rejected the idea of central planning from the start.

How does being from an Eastern European country give you a skepticism of central planning? Yes, the former state capitalist economies of eastern Europe were very inefficient. However, the problem is that capitalism, which is exactly what most of these countries (including Romania) have always been, is not planned. Basing your skepticism of central planning on an economy that was only nominally planned is equivalent to critiquing socialism based on these sames countries as being socialist.

[xxxxxx666666]

One possible alternative to centralized planning, I think, would be to use our intelligence individually and work together each in our own way.

Thus, swarm intelligence would be an alternative to central planning, and a lot more freedom to each individual too!

Here's a wiki link to give more details on swarm intelligence, basically by having everyone work for the benefit of each other, the swarm will become more adapt, and more intelligent, over time.

https://en.wikipedia.org/wiki/Swarm_intelligence

Perhaps, a true worker's state would be a very intelligent swarm, more or less, after all each according to their abilities and each to their needs, to more or less quote Marx.

However, I should add that Project Cybersyn under Allende in Chile: a centrally planned system, seemed to worked quite well in the short time that it ran before Allende's overthrown.

And some of the so called "East Tigers" (the fast growing asian countries) used a somewhat centrally planned capitalist economy and they seem to doing well for it.

[tuwix]

I think there should be found an equilibrium between central planing and market. There are people who are against market socialism but they don't understand that economy without market isn't possible at all. Even after abolishing of property there will be market still. If you want to exchange chocolate to sausage, then it is market. As well, in primitive communism when there is no property too, one exchanges duck for a chicken. Marketless economy is imposible as free market.

If you acknowledge that life without market is imposible, then there must be found an equilibrium between central planing and market to make economy the most efficient.

[ckaihatsu]

Multi-Tiered System of Productive and Consumptive Zones for a Post-Capitalist Political Economy

[Aware]

Well these days, we can gather enough information to simply determine necessary production. I'll give you an example.

A town of 1000 needs about 2 million pounds of food a year. You know your population isn't like to change significantly in the next 5 years. Given that, you'd need, very roughly, 6800 acres of arable land and x number of agricultural workers. Depending on how sophisticated your methods are, you may need only a handful of people, or the whole town, to work the land. After taking into account the number of workers needed for agriculture, you can then start deciding how to expend the excess labor.

Say there are 600 people not needed for the land. Platoons of these people can do various things.

In regards to resources, let's say you have only 10 tons of steel. You can make weapons for 300 people, using 8 tons, or you can use 5 tons to make useful tools and implements. Or perhaps you have 10,000 nails and you must decide on a small house that will use 7000 nails, or a barricade that uses 6000? If you are working with concrete numbers (accurate numbers on resources, consumption, and production and efficiency), you can plan accordingly, but it gets exponentially more difficult with very large populations.

[Sperm-Doll Setsuna]

There are people who are against market socialism but they don't understand that economy without market isn't possible at all. Even after abolishing of property there will be market still.

And when you abolish currencies and money?

There are these people who are against communism and think that there just can't not be a market.

[Tenka]

I think there should be found an equilibrium between central planing and market. There are people who are against market socialism but they don't understand that economy without market isn't possible at all. Even after abolishing of property there will be market still. If you want to exchange chocolate to sausage, then it is market. As well, in primitive communism when there is no property too, one exchanges duck for a chicken. Marketless economy is imposible as free market.

If you acknowledge that life without market is imposible, then there must be found an equilibrium between central planing and market to make economy the most efficient.

I don't think individuals trading things constitutes a "market" unless it is in a context of scarcity and you can then call it bartering. Bountiful and moneyless global society does not need a market, nor does a mix of centralised and "decentralised planning"* necessarily involve a market.

*This is an edit. Not sure where I got this term from, but I suppose what I had in mind was a sort of decentralised computing of demand to inform more centralised production decisions. (and of course there would have to be stockpiles made of things in case of disaster, etc.)

[tuwix]

I don't think individuals trading things constitutes a "market" unless it is in a context of scarcity and you can then call it bartering.

Bartering is form of market. And bartering will exist even in post-scarcity society. As I said, marketless economy is just imposible.

[Slavic]

Bartering is form of market. And bartering will exist even in post-scarcity society. As I said, marketless economy is just imposible.

Why would barter be needed in a post-scarcity society if every commodity needed is free and publicly available? All commodities would be distributed to each own's distribution centers where they will be freely assessable to the public; no bringing your chicken to exchange for a toaster.

For example, mind you this is hypothesizing we are living in a post-scarcity communist society, lets say I produce a food paste at my job every workday. This food paste after being constructed is transported to a grocery store. In this grocery store anyone can walk up, grab a unit of food paste, and go home. There is no exchange of commodities or barter, only freely available public commodities for consumption of their use-value.

Now how we reach a society in which this scenario can play out peacefully is another matter. I think that a syndicalist form of ecconomics is the best starting point after a DotP eliminates private property. Syndicates would be intimatley connected to the needs and productive capabilities of local populations, and would be able to formulate general quotas needed for feeding, clothing, housing etc the local population.

[tuwix]

Why would barter be needed in a post-scarcity society if every commodity needed is free and publicly available?

I explained that above. As in primitive communism there emerge a need to exchange goods for example chicken for a duck, as in industrial communism there will emerge the same need too. Someone will have something to spare but won't have anything else and it can be just more convinient to exchange it with someone else instead of ordering it and waiting for shipment. For example, chlidren in school could exchange toys in daily basis.

Ceratinly a communism will limit a market it will never eliminate it. It will always be exchange of goods even on pretty small scale. This is why marketless economy is just imposible, asa well as free market.

[Slavic]

Ceratinly a communism will limit a market it will never eliminate it. It will always be exchange of goods even on pretty small scale. This is why marketless economy is just imposible, asa well as free market.

Ok I can agree to that. Although limited, a small scale barter/market economy would most likley still be present even in a post-scarcity communist society, even just for the sake of convenience. Either way I do not think a barter based market would change the dynamics of a post-scarcity economy at all. Such a phenomenon would most likely only crop up in less industrial/populous regions due to sheer logistics of moving necessary commodities to these places.

[ckaihatsu]

I think many of the posts here are missing the point of what centralized planning is all about....

It's not something to be grudgingly tolerated while attempting to sidestep it with more-*de*centralized approaches. Rather, it's what's *possible* once we get beyond capitalism's antiquated norm of imposing market-type activities onto everyone, as happens with finance, exchanges, and bartering.

With centralization people would be freed up to focus only on their productive activities, and the cooperative social planning around them. There'd be no more scrambling to try to make things come together in an ad hoc way, dealing with last-minute logistics for procuring something by trying to quickly raise funds or finding something suitable to exchange for it.

Planning means that everything of value would be *pre*-planned -- logistical considerations would be done upfront, so that distributions from various sources come together when needed, *without exchanges* of any sort.

Unfortunately comrades *still* fall prey to subtle scaremongering that uses the USSR's ghosts -- as though centralized planning couldn't *ever* work because it didn't pan out for *that* country.

We need to be clear that a socialist political economy would be a *logistical* improvement -- as well as an economic and political one -- and that's due to the potential for centralized planning.

Sure, not *everything* would have to start all the way up at the global level, but, for the largest-scale projects, that would be an option, drawing upon resources from all over the world.

[Crabbensmasher]

I explained that above. As in primitive communism there emerge a need to exchange goods for example chicken for a duck, as in industrial communism there will emerge the same need too. Someone will have something to spare but won't have anything else and it can be just more convenient to exchange it with someone else instead of ordering it and waiting for shipment. For example, chlidren in school could exchange toys in daily basis.

Certainly a communism will limit a market it will never eliminate it. It will always be exchange of goods even on pretty small scale. This is why marketless economy is just imposible, asa well as free market.

Yess... I suppose there will be small 'markets' if you can call them that. Maybe I have green shoelaces, and want to trade them for red shoelaces. Maybe the going price for red shoelaces is 3 green shoelaces (As implausible as it sounds). At the end of the day though, can these really cause our method of distribution to be considered a 'market economy'? No, they're just shoelaces. Nobody is making excess profit from selling their red shoelaces. So yes, perhaps there will be something resembling a market, even within a centrally planned economy, but it's no reason to label it a market economy.

It's easy to ridicule a planned economy, given the world's experience dealing with them in the past. Really, though, I think most of their inefficiencies were caused by corruption, cronyism, and just all-round societal degradation.
USSR for example: There was an over-bearing bureaucracy, constantly trying to justify expansion. Bureaucracies constantly do this. They create red tape for themselves to justify their (quite often useless) positions. I don't know the nature of gozplan in the USSR, but I suspect a degree of this was going on, as was elsewhere in government. There's a wealth of satire out there just criticizing the bureaucracy of the SU. They were a class in themselves, just trying to get ahead, buy some leverage over the other guys. Buy influence with the Moscow bigwigs.
And do you think that, perhaps, certain areas or regions were given shortages/surpluses for political ends? "There's some discontent brewing over here, let's send them a bit more spending money. Consumption will keep em' docile. Guess we'll have to take it out of here though. Oh well". I can't speak on whether this happened in the SU, but it's entirely plausible.
On top of that, a lot of people were just sick of the work ethic being promoted. They saw no future in the country. They'd put in their 8 hours a day, maybe working 3 of it. Although people will blame this on lack of competition, I think it's fundamentally a cultural phenomenon. They were apathetic, unhappy. They were disillusioned by their country, politically. Because of this, they had no motivation.

The way of looking at things was still through a capitalist framework too. "Hey look, the guys across the Atlantic are driving Cadillacs and owning beach houses? Why can't we do that?". By just glimpsing materialism and unregulated consumption through a peephole, they wanted it even more. It was being glorified. Not to mention, there were shortages caused by the aforementioned problems. I wouldn't be surprised if these people were MORE profiteering, more capitalistic than their western counterparts. So you've got a bunch of entrepreneurial people, constantly envying what they don't have, and you stick them in a factory with no room for advancement. You tell them "We're an equal society now. You don't need anything more". It just doesn't work. I repeat, it will NOT work. That's why planned economies in the USSR failed.

Now if you remove these examples from the equation, does a planned economy still sound implausible>?

[ckaihatsu]

Now if you remove these examples from the equation, does a planned economy still sound implausible>?

Nope -- if anything, the USSR example should serve as an illustration of how important it is for capitalism to be displaced *worldwide*. Otherwise more USSR-type collapses are bound to result because there can't be socialism in just one country.

[argeiphontes]

Nope -- if anything, the USSR example should serve as an illustration of how important it is for capitalism to be displaced *worldwide*. Otherwise more USSR-type collapses are bound to result because there can't be socialism in just one country.

Just to play devil's advocate (I don't have a horse in the SIOC race), but what was the problem? AFAIK the USSR was able to buy things abroad and also engaged in imperialism to get resources. The "Soviet empire" covered quite a large area, so I'm not sure if natural resources were the problem.

Maybe the problem was there was no mechanism for "entrepreneurial" activity (initiating projects and combining labor and capital) outside of the managerial/party class, and even within it, central planning was inefficient in that regard and decisions were too centralized and politicized anyway. There was no reason for a production unit to meet consumer demands unless it was mandated from on high.

(Your system allows for entrepreneurial and consumer activity, and competition, and isn't centralized, so I'm not criticizing that, just the USSR. Not that is should be held over anyone's head, just that the problems need to be addressed by any planned economy.)

[Huey Prashker]

I posted this a while ago. It seems that decentralized planning is another alternative ckaihatsu also posted some models he developed. I'm new, and I really like this decentralized planning stuff.

REVLEFT . COM vb/any-problems-decentralized-t184362/index.html?p=2680257

[ckaihatsu]

Just to play devil's advocate (I don't have a horse in the SIOC race), but what was the problem?

AFAIK the USSR was able to buy things abroad

The term for this is 'state capitalism', since the USSR could only participate in the larger world economy through its markets.

I'm not an expert on the USSR so there are probably several factual points that I can't speak to.

and also engaged in imperialism to get resources.

This characterization of 'imperialism' is controversial since the USSR was the superpower *alternative* to Western hegemony. Many would take issue that the USSR's expansionism was deleterious to those areas it came to encompass.

The "Soviet empire" covered quite a large area, so I'm not sure if natural resources were the problem.

Maybe the problem was there was no mechanism for "entrepreneurial" activity (initiating projects and combining labor and capital) outside of the managerial/party class, and even within it, central planning was inefficient in that regard and decisions were too centralized and politicized anyway. There was no reason for a production unit to meet consumer demands unless it was mandated from on high.

It's a complex and complicated topic -- I'd mention that the Cold War's Iron Curtain really cut off the USSR and Eastern Europe from more-extensive involvement in global affairs.

The final nail in the coffin was when it got caught up in a nuclear arms race with the West which really depleted its funds.

(Your system allows for entrepreneurial

No, that's not correct -- 'entrepreneurial' implies profit-making, and there are no financial valuations whatsoever in my 'communist supply & demand' model:

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

(The schematic at post #5 depicts a possible *structure* for a post-capitalist political economy, but doesn't address *method* -- hence the 'communist supply & demand' model for that.)

and consumer activity, and competition, and isn't centralized,

The 'centralized' aspect would be up to the participants of such a society themselves.

so I'm not criticizing that, just the USSR. Not that is should be held over anyone's head, just that the problems need to be addressed by any planned economy.)

The issue I have with anyone who points to the USSR is that they make the USSR's problems seem endemic to *any* kind of socialism, which is quite a stretch. It's best to be clear that one instance of something Marxist-ish certainly doesn't define the *overall* project of Marxism, or socialism, or communism.

[argeiphontes]

No, that's not correct -- 'entrepreneurial' implies profit-making, and there are no financial valuations whatsoever in my 'communist supply & demand' model

I just meant 'entrepreneurial' in the sense of creating a project that combines labor and capital, not in any profit-making sense. Profit is just the incentive for this activity in market economies.

I guess I do have some questions about your project for clarification.

Let's say I want to make a new product, a new hiking shoe. Do I have to ask people to rank the shoe as a political priority, or are they able to just allocate labor credits to producing the shoe? (Thus prioritizing it indirectly.)

I assume I'd be allowed to build a prototype of the shoe, by getting my own materials by myself or the other people who wanted to build it. Not sure what would happen if something had to be developed, though, like a rubber blend for the sole. I suppose we could first try to make the sole development a political priority, knowing that it could be applied to a wide variety of shoes if it was useful. Or what if producing the prototype required some machinery. Where would I get it? People who allocated labor credits to my prototype would just be speculating that the shoe could be produced. I don't mind socializing the risk, because I want the shoe, but they might.

So, then I either have to ask for labor credits, or I have them already. I can enlist other people as fellow laborers in creating the shoe, maybe people from my hiking club or something. We can start trying to get the raw materials needed.

Do we "use" the labor credits we've gotten to pay ourselves, or do we earn "new" labor credits for our efforts based on the new labor we put in? Do we have to transfer all the credits people have allocated into raw materials and capital? What if we end up producing more or fewer shoes than were demanded then? I suppose extra shoes could become public property, but then who gets them? (edit: Oh, it's the people who've allocated labor credits I suppose.) If the labor credits allocated aren't transferred, what incentive do I have for continuing to produce the shoes when I lose interest? After all, I just started this whole thing to get myself and my buddies some new shoes, we don't make them for everybody to be happy. We don't like working with sewing equipment and glue anyway, maybe let's go back to our old jobs.

Either way, what if we give up and never produce the shoe; e.g. we can't get the grippy rubber we want for the sole. In that case, haven't we earned labor credits for not producing anything? I suppose this could be an incentive (or lack of a disincentive at least) for making new projects, but isn't it a problem that you 'earn' labor credits anyway? Maybe I'll start an unrealistic project just to acquire labor credits? Anybody want a colony on the moon, I swear my team of engineers can build it? The feasibility of the project is just a social judgment I assume, based on what I describe to the consumers. That makes the judgments of experts weigh less than it really should, not "deferring to the bootmaker" in the matter of making the boots.

And speaking of bootmaker, what if the experts I need are busy doing other things. Say they have easier jobs, or are earning a labor credit differential where they currently are. Can I raise the multiplier at my project in order to encourage the labor to jump ship and go to my project?

Is that a fair way to characterize the process though?

In which case, what is the incentive for generalizing the production of the shoe, rather than just getting the raw materials and building them for myself (the prototype is already mine, so why bother producing for anyone else). Maybe my hiking buddies and I would just order the raw materials and take a few days off of work to manufacture a few pairs in our homes. It's just a couple of days, what harm can it possibly do?

What about incentives for starting the project in the first place? A shoe is complex to me right now, but other things are more complex. I might have to engage in a lot of work to even present the project, or build the prototypes, and there is no hope of material gain except for one or two copies of the product we make. In the meantime, I may be spending less time at work doing things that are already productive, so there is a dis-incentive in that I'm earning less as I take the time to make something new. What about getting a designer to help with the project? I can't just pay a designer, I have to find one who is willing to give up their time elsewhere.

So, I think the positive aspects of "entrepreneurship" have to be dealt with also. It can't be a "dirty word" in a vibrant economy.

--------------

And yeah, the SU was a state-capitalist monstrosity, so it's not really a model of any kind of socialism.

[argeiphontes]

^ Also, since it's all politicized, what if people who didn't start the project start clamoring to change the design, such that my friends and I no longer want to work on the shoes in the first place. Then we just quit, and it's all been a waste of time. Maybe I could only get the support to produce some "average" good, based on common denominators that are able to get support. Everybody wants a piece of my shoe; it's just not worth it to try to produce anything new.