Economic Calculation Problem?....

[Pentrazemine]

Hi, guys, proud to be the latest addition on this forum after enough lurking and spying. I don't know if anyone here has brought this conundrum up before but is anyone familiar with the Economic Calculation Problem and how does one fix it if living in a Communistic or Socialist society?

I've been debating Anarchy-Capitalists on Steam and they seem to use that as the main sword of their argument. Any solid refutations of the ECP in relation to Capitalism and a hypothetical left-anarchist system?

[MarxSchmarx]

Great question. Funny you should mention steam. Modern means of communication have done much to address the originators concerns regarding the calculation problem.

Also, I'm moving this to economyics where you can go further in depth on this.

[cyu]

This right here is capitalism's economic calculation problem:



Money determines how economic resources are allocated. If capitalists support inequality, then some people will have much more money than others. The result is that economic resources are misallocated and used to produce ever more useless things for the rich, while the poor get to sleep under bridges.

[tuwix]

Hi, guys, proud to be the latest addition on this forum after enough lurking and spying. I don't know if anyone here has brought this conundrum up before but is anyone familiar with the Economic Calculation Problem and how does one fix it if living in a Communistic or Socialist society?

I've been debating Anarchy-Capitalists on Steam and they seem to use that as the main sword of their argument. Any solid refutations of the ECP in relation to Capitalism and a hypothetical left-anarchist system?

First of all, socialism doesn't assume an obligatory central planning to extent of the Soviet Union. In the first phase money will still exist and there won't be any calculation problem. The higher phase happens in environment where there is no scarcity in the most of products and services. Then money become obsolete. In abundance of products and services the economic calculation problem is just irrelevant.

[Five Year Plan]

Hi, guys, proud to be the latest addition on this forum after enough lurking and spying. I don't know if anyone here has brought this conundrum up before but is anyone familiar with the Economic Calculation Problem and how does one fix it if living in a Communistic or Socialist society?

I've been debating Anarchy-Capitalists on Steam and they seem to use that as the main sword of their argument. Any solid refutations of the ECP in relation to Capitalism and a hypothetical left-anarchist system?

Yes, I am aware of the supposed problem. Pat Devine has written about it pretty extensively, most notably in his articles "The Economic Calculation Debate: Lessons for Socialists," "Participatory Planning as a Deliberative Democratic Process," and in his book Democracy and Economic Planning. I find his rebuttal to be most powerful I have come across.

[Strannik]

Economic calculation problem is indeed an argument against detailed central planning. It can be mathematically proven, that only society as a whole can calculate social economic balance. That being said, capitalist enterprises are just smaller central planning units who additionally relate to rest of the world only through money - therefore have the "social calculation problem". Moreover, since with each monetary transaction there's a loss of economic information and private property allows these losses to accumulate, free market economy ends in similar situation as buying power accumulates in one end of society and needs at the other end. (Btw, central planning can still work and works - it just can't be detailed).

"Decentralized calculation in kind" is brought up as an alternative, but I think what Marx had in mind was rather a society where production and consumption are one process. There is no exchange of resources/products/commodities at all. There is no anonymous consumption; people and organizations provide services to each other in sustainable manner; when a "bottleneck" appears in production chain, people just go and work at that particular place.

[Ledur]

First of all, socialism doesn't assume an obligatory central planning to extent of the Soviet Union. In the first phase money will still exist and there won't be any calculation problem. The higher phase happens in environment where there is no scarcity in the most of products and services. Then money become obsolete. In abundance of products and services the economic calculation problem is just irrelevant.

Ancaps would say that, since human wants are endless, every resource is scarce, even those not in use.

ECP basically means that, in absence of prices, production wouldn't rationally allocate resources.

The greatest refutation of ECP I've seen is "Economic Calculation controversy: unravelling of a myth" by Robin Cox. Unfortunately, it's not online anymore.

[Tim Cornelis]

Indeed, socialism has an economic calculation problem, and labour time calculations mitigate this problem, but do not solve it. It will always be a problem. I tend to see many socialists misinterpret what it means and come up with solutions that do not address the problem at all, so be wary of this. Using these arguments against the 'anarcho-capitalists' will probably result in you losing the argument. I would consider the text adviced in the post above one such example.

However, capitalism has a 'calculation problem' which is worse, which prioritises profits over human needs.

Also note that the reason the USSR collapsed was not due to economic calculation -- usually the free market fundamentalists just assume or postulate this is the case. It collapsed because of comparatively slow implementations of innovative production technology which halted economic growth and resulted in ever-increasing market reforms being implemented, until liberal-ish capitalism was embraced.

[robbo203]

Ancaps would say that, since human wants are endless, every resource is scarce, even those not in use.

ECP basically means that, in absence of prices, production wouldn't rationally allocate resources.

The greatest refutation of ECP I've seen is "Economic Calculation controversy: unravelling of a myth" by Robin Cox. Unfortunately, it's not online anymore.

Its here. http://www.des4rev.org.uk/cv3cox.htm

There is also something here http://mailstrom.blogspot.com.es/200...roduction.html

[Anglo-Saxon Philistine]

Economic calculation problem is indeed an argument against detailed central planning. It can be mathematically proven, that only society as a whole can calculate social economic balance. That being said, capitalist enterprises are just smaller central planning units who additionally relate to rest of the world only through money - therefore have the "social calculation problem". Moreover, since with each monetary transaction there's a loss of economic information and private property allows these losses to accumulate, free market economy ends in similar situation as buying power accumulates in one end of society and needs at the other end. (Btw, central planning can still work and works - it just can't be detailed).

"Decentralized calculation in kind" is brought up as an alternative, but I think what Marx had in mind was rather a society where production and consumption are one process. There is no exchange of resources/products/commodities at all. There is no anonymous consumption; people and organizations provide services to each other in sustainable manner; when a "bottleneck" appears in production chain, people just go and work at that particular place.

I think Marx and Engels were fairly explicit that in socialism, the "anarchy in production" is replaced by "systematic, definite organisation" (Engels in anti-Duehring). What you propose seems to be closer to "anarchy in production" in the sense that it is entirely reactive, with producers moving in reaction to problems as they arise. I don't see the particular appeal of that, and non-anonymous consumption is pretty much an impossibility in a modern, global, socialised economy, thank Christ nonexistent.

As for the first paragraph, even if the mathematical proof you have in mind checks out, and is relevant to the situation (you can, of course, have proofs that are mathematically correct but completely irrelevant because they rely on faulty assumptions), it does not follow that detailed central planning is impossible, only that non-democratic or local detailed central planning is impossible. Thankfully very few people would propose a non-democratic sort of central planning.

[robbo203]

I think Marx and Engels were fairly explicit that in socialism, the "anarchy in production" is replaced by "systematic, definite organisation" (Engels in anti-Duehring). What you propose seems to be closer to "anarchy in production" in the sense that it is entirely reactive, with producers moving in reaction to problems as they arise. I don't see the particular appeal of that, and non-anonymous consumption is pretty much an impossibility in a modern, global, socialised economy, thank Christ nonexistent.

As for the first paragraph, even if the mathematical proof you have in mind checks out, and is relevant to the situation (you can, of course, have proofs that are mathematically correct but completely irrelevant because they rely on faulty assumptions), it does not follow that detailed central planning is impossible, only that non-democratic or local detailed central planning is impossible. Thankfully very few people would propose a non-democratic sort of central planning.

Classic or, as you call it, detailed, central planning is an impossiblity and an absurdity. It is quite ridiculous to propose apriori the input output ratios of literally millions of goods within some kind of giant Leontief type matix. The reason is obvious. If for any number of reasons the production of, say, steel, wheat, titanium or whatever falls short of the target specified in the Plan, this will have knock on ramifications that will feed through and affect the ability of producers to meet the numerous other detailed targets specified in the Plan. That is the nature of modern-day interconnected socialised production: the inputs of one sector are the outputs of another. They all hang together. The Plan will this inevitably generate massive inefficiencies - over production in some sectors mirroring under production in others

Point is that all sorts of factors could intrude to knock producers off course as far as meeting their specific target is concerned : a bad wheat harvest, a mining disaster, a flood or whatever. Every single moment of every single day something is going to happen that causes reality to diverge sharply from the Plan. But classic central planning, and the finely honed interdependence of all the parts of the plan, commits us to implementing the Plan in toto or not at all. Realistically there is no chance of it even getting off the ground. The very moment the Plan had been devised it will have to be redrawn again and again and again. The sheer rigidity of the plan - and the Plan is no longer a plan without it being rigid - condemns it to utter irrelevance.

We are left with no other option but to acknowlege the need for some kind of feedback mechanism. Capitalism has its feedback mechanism in the form of the market. Communism will have its feedback mechanism in the form of a self-regulating system of stock control. This article advances some ideas as to how the latter might work http://www.des4rev.org.uk/cv3cox.htm

I would also assert that central planning in the classical sense is implicitly anti-communist and indeed anti democratic. How in a free society are you going to enforce the meeting of targets? Labour regimentation? Trotsky's militarisation of labour? How are you going to ensure that people take no more than they are strictly rationed (and how indeed is rationing compatible with communist free access)? What about changing tastes and patterns of consumption. Are people not gpoing to be allowed to change their consumptions habits over the next 5 or 10 years because this will upset the intricately worked out calculations embodied in the Plan? And of course woe betide those who have more, or less, offspring than allowed for in the Plan!

More to the point, how is a global population of 7 billions going to meaningly legislate for the needs of everyone on planet Earth? Are the citizens of Washington going to help decide on the provision of public toilets for the citizens of Warsaw and vice versa? Obviously not, but this rather trite example does go to underscore a more serious point - that, almost inevitably, detailed central planning lends itself to decision making by a tiny technocratic elite which will soon enough evolve into a new ruling class with the power to enforce (or attempt to enforce) what its single giant plan had specified. By default, if not design, the capacity to make such decisions will steadily gravitate towards, and concentrate more and more in the hands of, that elite.

[Anglo-Saxon Philistine]

Classic or, as you call it, detailed, central planning is an impossiblity and an absurdity. It is quite ridiculous to propose apriori the input output ratios of literally millions of goods within some kind of giant Leontief type matix. The reason is obvious. If for any number of reasons the production of, say, steel, wheat, titanium or whatever falls short of the target specified in the Plan, this will have knock on ramifications that will feed through and affect the ability of producers to meet the numerous other detailed targets specified in the Plan. That is the nature of modern-day interconnected socialised production: the inputs of one sector are the outputs of another. They all hang together. The Plan will this inevitably generate massive inefficiencies - over production in some sectors mirroring under production in others

Point is that all sorts of factors could intrude to knock producers off course as far as meeting their specific target is concerned : a bad wheat harvest, a mining disaster, a flood or whatever. Every single moment of every single day something is going to happen that causes reality to diverge sharply from the Plan. But classic central planning, and the finely honed interdependence of all the parts of the plan, commits us to implementing the Plan in toto or not at all. Realistically there is no chance of it even getting off the ground. The very moment the Plan had been devised it will have to be redrawn again and again and again. The sheer rigidity of the plan - and the Plan is no longer a plan without being rigid - condemns it to utter irrelevance.

We are left with no other option but to acknowlege the need for some kind of feedback mechanism. Capitalism has its feedback mechanism in the form of the market. Communism will have its feedback mechanism in the form of a self-regulating system of stock control. This article advances some ideas as to how the latter might work http://www.des4rev.org.uk/cv3cox.htm

I would also assert that central planning in the classical sense is implicitly anti-communist and indeed anti democratic. How in a free society are you going to enforce the meeting of targets? Labour regimentation? Trotsky's militarisation of labour? How are you going to ensure that people take no more than they are strictly rationed (and how indeed is rationing compatible with communist free access). What about changing tastes and patterns of consumption. Are people not allowed to change their consumptions habits over the next 5 or 10 years because this will upset the intricately worked out calculations embodied in the Plan. And of course woe betide those who have more, or less, offspring than allowed for in the Plan!

More to the point, how is a global population of 7 billions going to meaningly legislate for the needs of everyone on planet Earth? Are the citizens of Washington going to help decide on the provision of public toilets for the citizens of Warsaw and vice versa? Obviously not but this rather trite example does go to underscore a more serious point - that, almost inevitably, detailed central planning lends itself to decision making by a tiny technocratic elite which will soon enough evolve into a new ruling class with the power to enforce what its single giant plan had specified

The problem is not with the notion of a feedback mechanism, the problem is with the assumption that the feedback mechanism needs to be automatic, instead of conscious and explicit. This, in the end, results merely in a simulated market with all of the attendant inefficiencies.

People might deride input-output matrices, but in fact we can deal with matrices pretty well, particularly if they're sparse (which they would be to a great extent). That is, however, essentially a technical question.

The other two objections are, I think, fairly spurious. How will society enforce the plan? It won't need to, in communism subjection to the socially-decided course of action is a matter of habit. And planning is compatible with free access since we can consistently overproduce (in fact, I'm not sure how free access would be possible in "your" system without shortages).

And plans are surely corrected all of the time. What makes a planned economy planned is that it is consciously guided by a definite scheme. It doesn't matter if the plan needs to be corrected from time to time (you might as well say train departures aren't planned because the time-table needs to be changed when accidents etc. happen).

[robbo203]

The problem is not with the notion of a feedback mechanism, the problem is with the assumption that the feedback mechanism needs to be automatic, instead of conscious and explicit. This, in the end, results merely in a simulated market with all of the attendant inefficiencies.

Not at all. Modern enterprises like supermarkets operate a self regulating system of stock control using physical calculation in kind which operates alongside a system of monetary calculation. Communism simply dispenses with the latter but retains the former. Im not quite sure why you counterpose "automatic" to "conscious" and "explicit". The people who operate a communist distribution store, say, could presumably install automatic electronic devices that register the rate at which stock is removed form the store in an automatic sense and so helps to make explicit in a quite consciuous fasion the fact that fresh stock needs to be ordered.

People might deride input-output matrices, but in fact we can deal with matrices pretty well, particularly if they're sparse (which they would be to a great extent). That is, however, essentially a technical question.

I can do no better than quote Xue Muqiao, an adviser to the Chinese state Planning Commission

An all inclusive plan setting arbitrary targets for the grasssroots is impractical because..there are millions of products and even a greater number of varieties and specifications of these products which cannot be covered by a single plam. In China only a few hundred products, accounting for a little over half of the GNP value, are handled directly by the State Planning Commission. While the commision can work ourt accurate figures for a few dozen products, it can only make rough estimates for the rest. Even in the case of the former, the figures can cannot possibly cover all the vaieties and specifications which can only be determined by business agencies or between supply and user (State Capitalism. The Wages system under New Management Buick and Crump p.82)

In the Soviet Union, Gosplan's "plans" were a joke. Almost routinely, plans had to be modified to fit in with changing realities and to appear as if the plan had been filled. The plans were litte more than a wishlist. They did not shape economic circumstances as were shaped by the latter

The other two objections are, I think, fairly spurious. How will society enforce the plan? It won't need to, in communism subjection to the socially-decided course of action is a matter of habit. And planning is compatible with free access since we can consistently overproduce (in fact, I'm not sure how free access would be possible in "your" system without shortages).

No this is a straw argument. Capitalism is after all compatible with planning. In fact capitalism is full of plans. Enterprises plan everyday. The argument here is whether there should be one single plan for the whole oif society or numerous plans that mutually interact and adjust to each other over time. Im arguing for the latter. And of course communist production units would aim as a general rule to overproduce in the sense of producing a buffer of stock so as to accommodate unpredictable changes in demand or supply. That is an aspect of the largely self regulating system of communist production that Im advancing.

But what of your detailed central planning involving a single society-wide planning. You say it wont need to enforce the plan becuase "subjection to the socially-decided course of action is a matter of habit". This raises more questions than it answers. How is the plan to be socially decided? I suggest to you that even if your arrangement were technicaly feasible the plan would be decided not by society but a very small technocratic elite claiming to speak for society.

Secondly, it is not a question of the inculcation of appropriate habits but of information and coordination. Your diligent communist workforce can turn up for work everyday but still the problem could and almost certainly will arise that I am speaking about . Shortfalls in certain targets for whatever reason will have knock on consequences for other targets leading to massive wastages and inefficiencies. If product X require two inputs A and B and the production of A for some reason is curtailed what is the point of the producers of B slavishly continuing to produce B at the same rate of production in order to meet their specified target?

And plans are surely corrected all of the time. What makes a planned economy planned is that it is consciously guided by a definite scheme. It doesn't matter if the plan needs to be corrected from time to time (you might as well say train departures aren't planned because the time-table needs to be changed when accidents etc. happen).

But if you are talking about plans that are corrected from time to time, you are no longer talking of classical central planning in the sense of a single society wide plan covering everying. I agree that plans "needs to be corrected from time to time" and it is significant that you talk of plans in the plural which is to slide away from the conception of central planning as such since you are no longer talking of a single plan. But this is precisely what makes that conception unrealisable.

What you are in fact alluding is is what is or was called indicative planning but that is far removed from full on central planning. You come up with a wishlist of targets to reach - so many tonnes of steel, so many units of housing and so on - which you hope producers will consciously take on board and somehow orientate themselves towards fulfiling. But this is predicated on the idea of relatively autonomous units making their own decisions albeit consciously guided by a definite scheme as you say.

However, indicative planning which was attempted in places like France and the UK in the early post war area proved to be more or less a complete flop precisely because it lacked any teeth. Central planning might possess teeth in that sense of joining up all the dots but in order for the concept to be implemented the plan has to be applied in toto and without being subject to corrections. If you correct parts of the Plan it is the whole Plan that in effect needs to be corrected becuase of the interdependence of the parts of the Plan. This cannot happen without destroying the very coherency of the Plan itself since it means endlessly having to correct the Plan. Which is why in practical terms classic central planning is completely unrealisable

[Anglo-Saxon Philistine]

Not at all. Modern enterprises like supermarkets operate a self regulating system of stock control using physical calculation in kind which operates alongside a system of monetary calculation. Communism simply dispenses with the latter but retains the former. Im not quite sure why you counterpose "automatic" to "conscious" and "explicit". The people who operate a communist distribution store, say, could presumably install automatic electronic devices that register the rate at which stock is removed form the store in an automatic sense and so helps to make explicit in a quite consciuous fasion the fact that fresh stock needs to be ordered.

I counterpose automatic action to explicit, conscious decisions, and I think this is fairly elementary, because if something is done automatically it is not subject to conscious decision. In any case, even in the example above, it is individual economic units that are making the decision (possibly - if there is a rate of stock depletion that should automatically lead to ordering new stock, it really isn't a matter of their decision), not society as a whole.

Now, let's see how your system would actually work. Let us suppose that the stock of computers in one distribution centre has been depleted to the extent that an order is made for new computers. Now, what does this mean? It means that the computer factory, in turn, needs to make new orders for plastic, for microchips, the microchip factory in turn needs to send an order to the silicon manufacturers and so on. And not only that, the transportation of all of these has to be organised on an ad hoc basis, which is no trivial matter considering that almost any individual economic unit will need resources from the entire planet, from the rare metals of former China to copper of the Congo basin.

So in fact, if shortages are to be avoided, the demand for various goods needs to be assessed in advance (so that the various economic units know how much to (over)produce), transportation needs to be arranged in advance and, in fact, you end up with a planned economy.

I can do no better than quote Xue Muqiao, an adviser to the Chinese state Planning Commission

An all inclusive plan setting arbitrary targets for the grasssroots is impractical because..there are millions of products and even a greater number of varieties and specifications of these products which cannot be covered by a single plam. In China only a few hundred products, accounting for a little over half of the GNP value, are handled directly by the State Planning Commission. While the commision can work ourt accurate figures for a few dozen products, it can only make rough estimates for the rest. Even in the case of the former, the figures can cannot possibly cover all the vaieties and specifications which can only be determined by business agencies or between supply and user (State Capitalism. The Wages system under New Management Buick and Crump p.82)

Ah, see, that's because in China, planning outside the industrial core of the state economy is a bad joke. And of course the Chinese bureaucracy can't assess the figures for products, as it does not allow any democratic input. Likewise the Soviet Union. All this shows is that, surprise surprise, if you don't ask the members of society, you can't know what they want.

No this is a straw argument. Capitalism is after all compatible with planning. In fact capitalism is full of plans. Enterprises plan everyday. The argument here is whether there should be one single plan for the whole oif society or numerous plans that mutually interact and adjust to each other over time. Im arguing for the latter. And of course communist production units would aim as a general rule to overproduce in the sense of producing a buffer of stock so as to accommodate unpredictable changes in demand or supply. That is an aspect of the largely self regulating system of communist production that Im advancing.

But what of your detailed central planning involving a single society-wide planning. You say it wont need to enforce the plan becuase "subjection to the socially-decided course of action is a matter of habit". This raises more questions than it answers. How is the plan to be socially decided? I suggest to you that even if your arrangement were technicaly feasible the plan would be decided not by society but a very small technocratic elite claiming to speak for society.

"Technocratic elite", it that a Marxist term? It is not. The point is that any social plan needs to be the result of a democratic decision of the member of society, as the planners do not magically know what people want unless they ask them. Of course a dedicated organ of the central authorities would probably have the responsibility for drawing up the plan, or several plans, after having consulted the members of society by questionnaire, and so on - it really isn't important to draw up a precise plan of social planning in the year 2030 now - and then the democratic organs of society would either approve of the plan or reject it.

Secondly, it is not a question of the inculcation of appropriate habits but of information and coordination. Your diligent communist workforce can turn up for work everyday but still the problem could and almost certainly will arise that I am speaking about . Shortfalls in certain targets for whatever reason will have knock on consequences for other targets leading to massive wastages and inefficiencies. If product X require two inputs A and B and the production of A for some reason is curtailed what is the point of the producers of B slavishly continuing to produce B at the same rate of production in order to meet their specified target?

Obviously there would be supervisory and monitoring organs, and obviously human society has had the capacity to communicate these things since the invention of the telegraph.

Let's suppose that Dildo Factory 108 has blown up. The workers notify the relevant organ, which briefly consults the remaining factories and re-divides the production quotas, informing each factory. I don't see anything problematic about that.

But if you are talking about plans that are corrected from time to time, you are no longer talking of classical central planning in the sense of a single society wide plan covering everying. I agree that plans "needs to be corrected from time to time" and it is significant that you talk of plans in the plural which is to slide away from the conception of central planning as such since you are no longer talking of a single plan. But this is precisely what makes that conception unrealisable.

What you are in fact alluding is is what is or was called indicative planning but that is far removed from full on central planning. You come up with a wishlist of targets to reach - so many tonnes of steel, so many units of housing and so on - which you hope producers will consciously take on board and somehow orientate themselves towards fulfiling. But this is predicated on the idea of relatively autonomous units making their own decisions albeit consciously guided by a definite scheme as you say.

However, indicative planning which was attempted in places like France and the UK in the early post war area proved to be more or less a complete flop precisely because it lacked any teeth. Central planning might possess teeth in that sense of joining up all the dots but in order for the concept to be implemented the plan has to be applied in toto and without being subject to corrections. If you correct parts of the Plan it is the whole Plan that in effect needs to be corrected becuase of the interdependence of the parts of the Plan. This cannot happen without destroying the very coherency of the Plan itself since it means endlessly having to correct the Plan. Which is why in practical terms classic central planning is completely unrealisable

No, indicative planning is not what I was talking about. I was talking about the trivial fact that any plan, not just general social production plans, but train departure time-tables, university curricula etc. (hence "plans", not because I think that there would be multiple social production plans in a socialist society, which would mean there is no central planning at all and the anarchy of production has not been abolished), needs to be corrected when unforeseen circumstances arise. This does not mean the plan is not a plan but a suggestion (as in planned-for circumstances it is to be followed to the letter), but that humans can not control all of the variables for production (yet). Accidents, droughts etc. happen.

[robbo203]

I counterpose automatic action to explicit, conscious decisions, and I think this is fairly elementary, because if something is done automatically it is not subject to conscious decision. In any case, even in the example above, it is individual economic units that are making the decision (possibly - if there is a rate of stock depletion that should automatically lead to ordering new stock, it really isn't a matter of their decision), not society as a whole.

Now, let's see how your system would actually work. Let us suppose that the stock of computers in one distribution centre has been depleted to the extent that an order is made for new computers. Now, what does this mean? It means that the computer factory, in turn, needs to make new orders for plastic, for microchips, the microchip factory in turn needs to send an order to the silicon manufacturers and so on. And not only that, the transportation of all of these has to be organised on an ad hoc basis, which is no trivial matter considering that almost any individual economic unit will need resources from the entire planet, from the rare metals of former China to copper of the Congo basin.

So in fact, if shortages are to be avoided, the demand for various goods needs to be assessed in advance (so that the various economic units know how much to (over)produce), transportation needs to be arranged in advance and, in fact, you end up with a planned economy.

You are making my case for me. It is the very forbidding complexity of the productive inter-relationships within a modern industrial economy whether under capitalism or communism that completely rules out what you seem to be advocating - detailed central planning. Spontaneity, what you characterise as ad hocery, on the basis of an institutionalised feedback mechanism and the mutual adjustments of numerous production and distribution units to each others' plans - that is, an essentially self regulating system of production - is the only realistic basis on which to proceed.

You seem to overlook that it is just such a mechanism -a system of self regulating stock control - that affords us the very means to assess the demand for various goods and ensure an adequate buffer stock to accomodate any unexpected changes in demand. What is your solution in the absence of such a feedback mechanism? Are you literally proposing to consult the entire world's population on what they want in respect of a vast range of products runing into several millions before you proceed to embark on producing for those wants. The idea is absurd. But that seems to be exactly what you are suggesting by your statement that "if shortages are to be avoided, the demand for various goods needs to be assessed in advance". We dont need to assess this demand "in advance". There is already in place an ongoing dialectic between supply and demand which is effectively mediated by a self regulating system of stock control.

Ah, see, that's because in China, planning outside the industrial core of the state economy is a bad joke. And of course the Chinese bureaucracy can't assess the figures for products, as it does not allow any democratic input. Likewise the Soviet Union. All this shows is that, surprise surprise, if you don't ask the members of society, you can't know what they want.

No this is just so wrong. Its not because of the lack of "democratic input" that the Chinese State Planning Cpommission could at best manipulate only a few hundred products within an input output matrix when in the real world there are literally millions upon millions of products to deal with. Nor is it becuase of the lack of computational power. The problem resides in the real world itself, in the ever changing complex inter-relationships of the multiple variables you have to work with.

Actually, trying to operate a system of detailed central planning "democratically" is even more impossibly daunting, if one can talk in such terms, than trying to operate it by authoritarian top-down diktat. It adds an additional and indeed insurmountable layer of complexity to the whole procedure. How exactly are you going to go about asking every single member of society "democratically" on what they want out of a list comprising millions of products ? This not to mention , as Xue put it, the even "greater number of varieties and specifications of these products" e.g.clothing styles, colour or size of cars etc etc

"Technocratic elite", it that a Marxist term? It is not. The point is that any social plan needs to be the result of a democratic decision of the member of society, as the planners do not magically know what people want unless they ask them. Of course a dedicated organ of the central authorities would probably have the responsibility for drawing up the plan, or several plans, after having consulted the members of society by questionnaire, and so on - it really isn't important to draw up a precise plan of social planning in the year 2030 now - and then the democratic organs of society would either approve of the plan or reject it.

Technocratic elite may not be a Marxist term (so what, anyway?) but that is what your central planners operating out of your single planning centre will become by default if not by design. Decisionmaking, of sheer logistical necessity, will concentrate relentlessly in the hands of this elite which will in due course, Im convinced, transmute into a new ruling class (which is of course , very much a Marxist term).

And this idea of yours of consulting members of society - all 7 billion of us - by questionnaire - what exactly do you propose to include in this questionnaire? And again why would you need such a questionaiire given that you already know what people want judging form the ever shifting pattern of consumption as revealed via the self regulating system of stock control? Thus, persistant shortages of stock will suggest robust and possibly unmet demand whereas conversely a slow take up rate will suggest sluggish demand.

Im not averse to some forms of pro-active interventions to determine more precisely what people are wanting - such as consumer surveys - to supplement the data provided by a self regulating system of stock control but thats an entirely different matter. What you are proposing is something monumentally daunting and by that token incredibly rigid and inflexible. By the time you have consulted all 7 billion people and worked out what they wanted, it is quite likely that that their needs will have changed significantly - or do you intend to insist that they should not alter what they want by one iota for the duration of the next five years? Tough if in the meanwhile you develop a life threatening cancer and the store has not been allocated a big enough supply of the drug to accomodate your need for it.

Obviously there would be supervisory and monitoring organs, and obviously human society has had the capacity to communicate these things since the invention of the telegraph.

Let's suppose that Dildo Factory 108 has blown up. The workers notify the relevant organ, which briefly consults the remaining factories and re-divides the production quotas, informing each factory. I don't see anything problematic about that.

Apart from the word "quota" which is grounded in the ideology of central planning there is nothing much problematic about that. I dont know whether, with today's distributed computer networks, there would be much call for some kind of middleman to liaise between the different factories and distribution store requesting a supply of dildos but thats another matter

No, indicative planning is not what I was talking about. I was talking about the trivial fact that any plan, not just general social production plans, but train departure time-tables, university curricula etc. (hence "plans", not because I think that there would be multiple social production plans in a socialist society, which would mean there is no central planning at all and the anarchy of production has not been abolished), needs to be corrected when unforeseen circumstances arise. This does not mean the plan is not a plan but a suggestion (as in planned-for circumstances it is to be followed to the letter), but that humans can not control all of the variables for production (yet). Accidents, droughts etc. happen.

I am not suggesting that a plan is not a plan if it is not correctible. In capitalism there are millions of interacting plans. Central planning is the proposal to replace these millions of plans by one single plan embracing the entirety of production so that there is no no longer any spontaneous interaction or what you call "anarchy of production". (Marx and Engels argued that anarchy of production would grow under capitalism even as they held that capital would become more and concentrated - which suggests that they had a sonewhat different understanding of the expression "anarchy of production" than you have and that it is not necessarily to do with sheer number of planning units operating in the economy)

All planning is by defintion apriori. We conceive of the plan in advance and then implement it in practice. In capitalism that happens all the time and so will it happen in communism. You suggest that there will be no multiple social production plans in a socialist society, becuase that would mean there is no central planning at all and the anarchy of production has not been abolished. So you clearly have in mind society-wide planning involving one single gigantic plan and hence one single planning aiuthority. It is not logically possible in these circumstances to talk of there being several "plans"; there is and can only be one plan otherwise it is not strictly central planning but polycentric planning

In the case of a polycentric planning system I am advocating you have multiple plans spantaneously interacting with each other and adjusting towards each other. There is in other words a built in form of correction going on all the time. You correct your plan in the light of other peoples' plans. If a distribution stores orders more of X you increase your planned output of X. Simples. But what of your system of unicentric central planning. How is the Plan to be "corrected"?

You have simply failed to address my central point. Any change that happens to any part of your single society wide Plan means the whole Plan has to be reconfigured from scratch . This is becuase the different parts of the plan necessarily hang togther within the nexus of input output relationships. If the global output of steel unexpectedly declines by 2 % this will adversely affect the output of tractors which in turn will affect the wheat harvest next year and so on and so forth. So the plan will have to be redrawn in its entirety with new production targets being allocated for each of the millions and millions of producer and consumer goods comprising the Plan


The point is that these kind of divergences between the Plan and the reality it seeks to "plan" are occuring, and will occur, at every moment of every day and every time that happens you will have to reconfigure the Plan. Which basically means that you will never ever actually get round to producing such a comprehensive plan in the first place. It will be constantly stuck in the drawing room at the formulation stage, so to speak, with the hardpressed and harrased central planners desparately trying to play catch up with the ever shifting pattern of real world material balances.

For that reason alone, and there are several more, it will be doomed from the get go.

[Anglo-Saxon Philistine]

You are making my case for me. It is the very forbidding complexity of the productive inter-relationships within a modern industrial economy whether under capitalism or communism that completely rules out what you seem to be advocating - detailed central planning. Spontaneity, what you characterise as ad hocery, on the basis of an institutionalised feedback mechanism and the mutual adjustments of numerous production and distribution units to each others' plans - that is, an essentially self regulating system of production - is the only realistic basis on which to proceed.

You seem to overlook that it is just such a mechanism -a system of self regulating stock control - that affords us the very means to assess the demand for various goods and ensure an adequate buffer stock to accomodate any unexpected changes in demand. What is your solution in the absence of such a feedback mechanism? Are you literally proposing to consult the entire world's population on what they want in respect of a vast range of products runing into several millions before you proceed to embark on producing for those wants. The idea is absurd. But that seems to be exactly what you are suggesting by your statement that "if shortages are to be avoided, the demand for various goods needs to be assessed in advance". We dont need to assess this demand "in advance". There is already in place an ongoing dialectic between supply and demand which is effectively mediated by a self regulating system of stock control.

This misses the point of my question entirely, which is a shame because, even though I don't particularly care for your politics, I think your approach to problems of production and distribution is both more coherent and Marxist than the sort of market "socialism" that is standard on this site.

So, let me rephrase the question: you expect projected shortages to send signals, mostly automated, to production units, where in turn either projected or real shortages would send signals to other production units and so on. In order to avoid delays and shortages, two things are necessary. First, a "buffer" of overproduction that would take care of any momentary shortages, and second, transportation and logistics in general.

Both, it seems to me, require planning in advance, first of all because the size of the buffer needs to be calculated (the socialist society, of course, does not need to worry about capitalist "inefficiency", but there is still something less than socially optimal about an iron smelting operation producing tonnes of unneeded iron to rust, deform, get lost in warehouses etc.

Second, the transportation needs to be planned out in advance as there is a given number of freight ships, trucks etc., and it is preferable to space them so as to avoid congestion. With central planning, this is simply a computational problem that needs to be solved together with the input-output segment etc. But if transport is arranged in an ad hoc basis, well, I am sure we know where that leads.

That, at least, is my take on the problem. The question, then, is how you propose that shortages and transport bottlenecks be prevented without planning in advance.

Two minor point: it seems that in your proposal, production units would work haltingly and sporadically, producing enough for one "order" and then going idle, but this is probably the worst way to operate a factory and similar units. Second, how would the "order" be forwarded to the "correct" factory so as to minimise the delay between an order being made and the final product being received, the usage of certain priority resources etc.?

No this is just so wrong. Its not because of the lack of "democratic input" that the Chinese State Planning Cpommission could at best manipulate only a few hundred products within an input output matrix when in the real world there are literally millions upon millions of products to deal with. Nor is it becuase of the lack of computational power. The problem resides in the real world itself, in the ever changing complex inter-relationships of the multiple variables you have to work with.

Actually, trying to operate a system of detailed central planning "democratically" is even more impossibly daunting, if one can talk in such terms, than trying to operate it by authoritarian top-down diktat. It adds an additional and indeed insurmountable layer of complexity to the whole procedure. How exactly are you going to go about asking every single member of society "democratically" on what they want out of a list comprising millions of products ? This not to mention , as Xue put it, the even "greater number of varieties and specifications of these products" e.g.clothing styles, colour or size of cars etc etc

But in fact, most people consume only a small subset of those millions of products on a daily basis. I never said that questionnaires would be the only method of assessing demand, or even the primary one (that would be as tedious as ParEcon). I explicitly did not present a finished proposal for how demand would be assessed in a planned economy, as I lack the necessary expertise (I'm a physicist, currently working as a computer monkey), and in the absence of an actual entirely centrally-planned economy, I would be forced to speculate far too much. Perhaps when I'm forty and commissar for the construction of heavy industry or something.

Nonetheless, I imagine there are several methods of assessing this demand (and I've said the phrase too many times and now it sounds weird): looking at the consumption in the previous period and extrapolating (preferably using several models and assumptions), questionnaires, having the consumers rank their preference, and so on. Generally, if you think that a decentralised system would be able to assess consumer demands, there is no reason why this data can not be collated and linked together.

In any case, what makes planning democratic is the element of political decision - it should be a democratic decision of society to approve of or reject any plan drawn up by the planning organs.

Technocratic elite may not be a Marxist term (so what, anyway?) but that is what your central planners operating out of your single planning centre will become by default if not by design. Decisionmaking, of sheer logistical necessity, will concentrate relentlessly in the hands of this elite which will in due course, Im convinced, transmute into a new ruling class (which is of course , very much a Marxist term).

Except, of course, the ruling class is a very specific social group, defined not by its position in the planning process but its relation to the means of production. I'm not sure how to address this, to be honest, as you don't say why planning bodies (which, in socialism, would be elected, recall-able, which would not be composed of "specialists" as there would be no spetsy in socialism etc.) would become a "technocratic elite", whatever that means, "by default".

And this idea of yours of consulting members of society - all 7 billion of us - by questionnaire - what exactly do you propose to include in this questionnaire? And again why would you need such a questionaiire given that you already know what people want judging form the ever shifting pattern of consumption as revealed via the self regulating system of stock control? Thus, persistant shortages of stock will suggest robust and possibly unmet demand whereas conversely a slow take up rate will suggest sluggish demand.

Suggest, but the actual situation on the ground might be different. Things like fads, consumer products becoming obsolete and so on, these are all things that a "self-regulating system of stock control" would not be able to predict (of course, strictly speaking it can't predict anything, bless'im, which is why human planners are always preferable to automatic systems).

Furthermore, how would this system handle major projects that are not strictly speaking tied to consumer demand - new dams, new nuclear power plants, new Orion-drive spaceships, whatever? No one comes into a store and buys a dam. I hope.

Im not averse to some forms of pro-active interventions to determine more precisely what people are wanting - such as consumer surveys - to supplement the data provided by a self regulating system of stock control but thats an entirely different matter. What you are proposing is something monumentally daunting and by that token incredibly rigid and inflexible. By the time you have consulted all 7 billion people and worked out what they wanted, it is quite likely that that their needs will have changed significantly - or do you intend to insist that they should not alter what they want by one iota for the duration of the next five years? Tough if in the meanwhile you develop a life threatening cancer and the store has not been allocated a big enough supply of the drug to accomodate your need for it.

The stereotypical five-year plan was appropriate, to an extent, for an era of punched card tabulation machines (I think RabKrIn was the biggest consumer of these). With modern technology, year-by-year plans are probably not impossible (and in fact it is advantageous to have the target period as short as possible, as projections tend to go awry if you go far enough into the future). And, again, I would point out the necessity of consistent overproduction, so as to take care of any sudden spikes in demand, whether from cancer, or new children being born etc.

Apart from the word "quota" which is grounded in the ideology of central planning there is nothing much problematic about that. I dont know whether, with today's distributed computer networks, there would be much call for some kind of middleman to liaise between the different factories and distribution store requesting a supply of dildos but thats another matter

Of course there is need for a middleman - first of all because these decisions need to be registered to facilitate social accounting at the end of the period, and second because it is not the job of each individual factory to know about the capacities of other factories. A central office can see that, Factory 108 having tragically blown up, it would be most expedient for Factory 109 to take up 80% of the additional workload, Factory 201 10%, and Factory 203 the rest. Then the central office can check in with the factories in question to see if that's alright - if the workers are willing to work the extra hours - and if not to think of something else.

I am not suggesting that a plan is not a plan if it is not correctible. In capitalism there are millions of interacting plans. Central planning is the proposal to replace these millions of plans by one single plan embracing the entirety of production so that there is no no longer any spontaneous interaction or what you call "anarchy of production". (Marx and Engels argued that anarchy of production would grow under capitalism even as they held that capital would become more and concentrated - which suggests that they had a sonewhat different understanding of the expression "anarchy of production" than you have and that it is not necessarily to do with sheer number of planning units operating in the economy)

I'm not sure that follows. The concentration of capital does not necessarily mean that disparate plans are linked together into one general plan - consider e.g. the pre-war rail cartel, where each national railway pursued its own agenda. Furthermore, as capital becomes concentrated, the complexity of capitalist production increases, the global scope of the market becomes increasingly apparent, and larger and larger strata of the ruined petite-bourgeoisie, previously producing essentially for local consumption, are drawn into capitalist production, increasing the anarchy of production.

All planning is by defintion apriori. We conceive of the plan in advance and then implement it in practice. In capitalism that happens all the time and so will it happen in communism. You suggest that there will be no multiple social production plans in a socialist society, becuase that would mean there is no central planning at all and the anarchy of production has not been abolished. So you clearly have in mind society-wide planning involving one single gigantic plan and hence one single planning aiuthority. It is not logically possible in these circumstances to talk of there being several "plans"; there is and can only be one plan otherwise it is not strictly central planning but polycentric planning

Yes, if central planning is in effect it is impossible to talk about more than one social economic plan, but the only time I used the plural "plans" I was talking about all manners of plans, from curricula to timetables.

In the case of a polycentric planning system I am advocating you have multiple plans spantaneously interacting with each other and adjusting towards each other. There is in other words a built in form of correction going on all the time. You correct your plan in the light of other peoples' plans. If a distribution stores orders more of X you increase your planned output of X. Simples. But what of your system of unicentric central planning. How is the Plan to be "corrected"?

You have simply failed to address my central point. Any change that happens to any part of your single society wide Plan means the whole Plan has to be reconfigured from scratch . This is becuase the different parts of the plan necessarily hang togther within the nexus of input output relationships. If the global output of steel unexpectedly declines by 2 % this will adversely affect the output of tractors which in turn will affect the wheat harvest next year and so on and so forth. So the plan will have to be redrawn in its entirety with new production targets being allocated for each of the millions and millions of producer and consumer goods comprising the Plan

To an extent, yes, although probably only one part of the input-output matrix would have to be changed. However, if the initial calculations are not a problem, neither are the new calculations needed to correct the plan, assuming of course there is no need to correct it often, which we can assume would be the case.

The point is that these kind of divergences between the Plan and the reality it seeks to "plan" are occuring, and will occur, at every moment of every day and every time that happens you will have to reconfigure the Plan. Which basically means that you will never ever actually get round to producing such a comprehensive plan in the first place. It will be constantly stuck in the drawing room at the formulation stage, so to speak, with the hardpressed and harrased central planners desparately trying to play catch up with the ever shifting pattern of real world material balances.

For that reason alone, and there are several more, it will be doomed from the get go.

Well, no, assuming the social knowledge of existing production capacities and material resources is adequate - and there is no reason to assume it isn't, there is no need to constantly redraft the plan. You talk about the global output of steel declines - but society would control the output of the steel industry. How would it declines, unless something truly unprecedented were to happen, to the effect of a significant percentage of the steelworks becoming inoperative?

Minor malfunctions will occur constantly, of course, and as I argued in another thread, there is a good way to take that into account: simply assume the production unit will not work with 100% efficiency, but with an efficiency corresponding to the weighted risk that it will become inoperative for X days - i.e. the coefficient would probably be something like:

(1 - (number of days the unit is inoperative/total planning period) * probability of the unit being operative for that number of days.

It's crude, and there's probably a better way to do it, but it's just an example of how these things can be taken into account.

[robbo203]

This misses the point of my question entirely, which is a shame because, even though I don't particularly care for your politics, I think your approach to problems of production and distribution is both more coherent and Marxist than the sort of market "socialism" that is standard on this site.

So, let me rephrase the question: you expect projected shortages to send signals, mostly automated, to production units, where in turn either projected or real shortages would send signals to other production units and so on. In order to avoid delays and shortages, two things are necessary. First, a "buffer" of overproduction that would take care of any momentary shortages, and second, transportation and logistics in general.

Both, it seems to me, require planning in advance, first of all because the size of the buffer needs to be calculated (the socialist society, of course, does not need to worry about capitalist "inefficiency", but there is still something less than socially optimal about an iron smelting operation producing tonnes of unneeded iron to rust, deform, get lost in warehouses etc.

Second, the transportation needs to be planned out in advance as there is a given number of freight ships, trucks etc., and it is preferable to space them so as to avoid congestion. With central planning, this is simply a computational problem that needs to be solved together with the input-output segment etc. But if transport is arranged in an ad hoc basis, well, I am sure we know where that leads.


That, at least, is my take on the problem. The question, then, is how you propose that shortages and transport bottlenecks be prevented without planning in advance.

With all due respect you are completely missing the point. "Planning in advance" is not the issue and in any case planning by definition is apriori. I repeat - capitalism is full of "planning in advance". Any conceivable kind of society involves "planning in advance". Where did you get the impression that I am somehow against it?

The issue is rather central planning - one single society wide plan covering everything - or polycentric planning meaning numerous plans and planning bodies interacting with, and adusting to , each other, their interactions being mediated via a feedback mechanism - a self regulating system of stock control - which by definition cental planning lacks.

Ive explained why this lack of feedback mechanism will effectively stymie any attempt to get a system of society wide planning off the ground - because the very rigidity of the plan (without which it would be rendered incoherent) means that if any part of the plan changes, the whole plan must be redrawn in toto. This is because the parts of the plan all hang together and must do so in order for the plan to be coherent at all.

Ive also expained that even if the proposal of society wide planning could be put into effect the implications of such a proposal are seriously anthithetical to everything that a free comunist society stands for. It will unavoidably concentrate power in the hands of a few who by default will willy nilly have to make most of the decisions. Also, its rigid system of production targets which must all be met across the board if the coherency of the Plan is to be maintained has distinctly authoritariam implications which smack of the militarisation of labour, the very opposite of the communist notion of an association of free producers. Similarly on the demand side of the equation, central planning brooks no departure from the plan for the same reason that any such departure will neciessite the complete reconfiguration of the Plan. Finally there is question of technological innovation which Ive not mentioned before but will also be rendered problematic by the imp[lenation of society wide planning.

Polycentric planning on the other hand is sufficiently adaptable and responsive to overcome each and all of these problems. You mention the problem of shortages and transport bottlenecks. Well , of course it is precisely the fact that supply of a particular good has fallen below the demand for it as indicated by means of a self regulating system of stock control that producers under a polycentric system of planning are able to deal with problem of shortages. By contrast how does a system of society wide planning even recogniseor acknowlege such a shortage exist. The answer is it can't. It falls outside the parameters within which it operates. It has no feedback mechanism whatsoever to enable it to deal with the problem of shortages exzcept to scrap the Plan and start again only to run into the same problem again. Individuals under a centrally planned economy may raise a hue and cry about shortages of certain goods but there is a fundamental disconnect between their voiced complaints and the way in which the the system operates. As I said there is no wayto adjust the plan to overcome these shortages wihtout requiring the whole plan to be reconfigured in toto. So you face a dillema : accept the plan and therefore accept the shortages for the duration of the plan or dont accept the shortages and scrap the plan completely

Regarding transportation needs, yes, of course this requires "advance planning" but once again that does mean it has to be part of a single society wide plan does it? Advance planning does not equall central planning. There will of ocurse be an important element of localised community decision making where issues such as transportation facilities will naturally arise Im am certainly not against this at all and that is why i questioned you earlier on your false dichotomy between consciousness planning and the automaticity of a self-regulating stock control system. These two things complement each other

Two minor point: it seems that in your proposal, production units would work haltingly and sporadically, producing enough for one "order" and then going idle, but this is probably the worst way to operate a factory and similar units. Second, how would the "order" be forwarded to the "correct" factory so as to minimise the delay between an order being made and the final product being received, the usage of certain priority resources etc.?

These two poiints may be connected. A production unit working sporadically and haltingly and hence below capacity is also one that naturally lends itself to being considered an appropriate source of supply - your "correct" factory - if the intention is minimise the delay between the triggering oif an order and reciept of the stock ordered. I am assuming you mean by this that usual supplier is fully stretched and an alternative supplier needs to be sought. On the other hand if you are saying that all the factories producing this particular good are working sporadically and haltingly well then that would suggest there is an oversupply of industrial capacity for producing this particular good. In which case there might be a prima facie for some of these factories to retool and manufacture some other product. A polycentric system of planning is sufficiently flexible to allow this to happen. A centrally planned economy involvng society wide planning is clearly not

But in fact, most people consume only a small subset of those millions of products on a daily basis. I never said that questionnaires would be the only method of assessing demand, or even the primary one (that would be as tedious as ParEcon). I explicitly did not present a finished proposal for how demand would be assessed in a planned economy, as I lack the necessary expertise (I'm a physicist, currently working as a computer monkey), and in the absence of an actual entirely centrally-planned economy, I would be forced to speculate far too much. Perhaps when I'm forty and commissar for the construction of heavy industry or something.

But this is where your proposal falls down ,dont you see? You say people consume only a small subset of those millions of products on a daily basis which is quite true if you are looking only at what they consume in a direct or immediately sensuous sense. I might want a consumable durable such as an IPad or a televisoin set. However these things consume quantities of various resources and energy which brings up the question of opportunty costs. So Im not only "consuming" the televisoion set but also the materials and energy that went into making it. Therefore to follow the logic of this if I am going to be canvassed on what I would like in the way of consumer durables I ought also perhaps to have a say in the allocation of resources that go to make these consumer durables as opposed to some other consumer durables that i may not want

In any case who gets to decide under your arrangewment on what products should be prpduced outside of that small subset you refer to. The producction units themselves? But in saying that you would create a problem for yourself. On what basis would these production units go about deciding what products they want. Well presumably they wouykd want prpducts - producer goods - that enable them to produce the consumer goods that conumers want. In which case why opt for this massively elaborate and roundabout method of issuing consumers with a complicated questionnaire when you have a very direct and straight forward procedure for producers to determine what consumers want - namely a self regulating system of stoick control , Such a procedure which a system of society wide planning rules out is moreover far more responsive to shifts in consumer habits than a cumbersome system of questionnaires which in addition poses all sorts of other problems like what sort of product do you question consumers about and how .do you evaluate their response. Ok I can understand you dont want to place too much empahsis on the proposal of questionaire but realistically what other method have you got under your system other than the planners deciding for people what they want?

Nonetheless, I imagine there are several methods of assessing this demand (and I've said the phrase too many times and now it sounds weird): looking at the consumption in the previous period and extrapolating (preferably using several models and assumptions), questionnaires, having the consumers rank their preference, and so on. Generally, if you think that a decentralised system would be able to assess consumer demands, there is no reason why this data can not be collated and linked together.

In any case, what makes planning democratic is the element of political decision - it should be a democratic decision of society to approve of or reject any plan drawn up by the planning organs. .

Yes of course but there are practical limits to how far you can take this. Democracy depends on informed and meaningful participation in the decisions that affect you. You have already implicitly conceded this point with yout comment that "most people consume only a small subset of those millions of products on a daily basis". The implication of what you are saying is that they cannot really make an informed choice on those products that fall outside of that subset. Nor is it necessary that they should have to. Also, I live in Spain but I frankly dont see why I should feel entitled to have a say in how a local community in Afghanisatan or Upper Volta should organise its sewage system or generate its energy supplies. Simply to put it this way is to show up the utter absurdity of the concept of society wide planning since right way we are conceding not just ghe desirability but the inevitabil;ity of multiplicity of plans operating side by side in society whereas society wide planning can admit of only one single plan and one single planning aithroity

Except, of course, the ruling class is a very specific social group, defined not by its position in the planning process but its relation to the means of production. I'm not sure how to address this, to be honest, as you don't say why planning bodies (which, in socialism, would be elected, recall-able, which would not be composed of "specialists" as there would be no spetsy in socialism etc.) would become a "technocratic elite", whatever that means, "by default".

Sure, I understand very well what a ruling class is and yes I go along with the bit about recallable and electable delegates to the organs of socialist decision makiung. However, what I am doing here is following through with a pure thought experiment - imagining what would happen in the event that you actually had in place a system of society-wide central planning in its classic sense. In that situation, of necessity, decisionmaking would concentrate in the hands of a tiny technocratic elite quite simply becuase it is quite impossible for 7 b illion people to be consulted on each and every decision to do with the milions upon millions of products that comprise the nasic ingredients of your centralised plan. Ipso facto that would have to be decided by a tiny minority. What I am also saying is that the authoritarian subtext of centralised planing which I have spelt oyt earlier would incentivise this technocratic elite to convert power into de facto property in much the same way as the catholic church came to acquite substantial property in Medieval Europe or Soviet apparatchilks came to assert collective minority or class class ownership of the means of production without having to rely on individual legal entitlement to property

Suggest, but the actual situation on the ground might be different. Things like fads, consumer products becoming obsolete and so on, these are all things that a "self-regulating system of stock control" would not be able to predict (of course, strictly speaking it can't predict anything, bless'im, which is why human planners are always preferable to automatic systems).

A self regulating system of stock control does not need to "predict£ in that sense only to respond effectively to changes which the human planners often cannot predict. Prediction is a human enterprise, a human extrapolation of perceived trends which can sometimes prove correct and sometimes turn out to be way off the mark

Furthermore, how would this system handle major projects that are not strictly speaking tied to consumer demand - new dams, new nuclear power plants, new Orion-drive spaceships, whatever? No one comes into a store and buys a dam. I hope..

Here is where you are misunderstanding my postion. I am not sayong there will not be collective decisionmaking and that all there will be is a "self regulating system of stock contro"l. What I am trying to say is that these two things must complement each other and that each are necessary for the functioning and wellbeing of a viable communist economy. A new dam is very clearly a collective enterprise which very definitely requires a collective input unlike a decision about whether you should pick an apple or an orange from your local fruit store. But a collective enterprise is itself a function of scale and while most decisionmaking of the collective kind will likely be locally based in my view some will be regionally based and a few decisions will be of global significance and be taken by the global comunitry via some kind of system of delegation. This kind of nuanced hierarchy of decisionmaking is once again something that cannot be countenanced by the kind of two dimensional model of planning that is society wide planning

The stereotypical five-year plan was appropriate, to an extent, for an era of punched card tabulation machines (I think RabKrIn was the biggest consumer of these). With modern technology, year-by-year plans are probably not impossible (and in fact it is advantageous to have the target period as short as possible, as projections tend to go awry if you go far enough into the future). And, again, I would point out the necessity of consistent overproduction, so as to take care of any sudden spikes in demand, whether from cancer, or new children being born etc.
..

But again unless I know what your year by year plan hopes to encompass I am at a loss to know how to respond. If you are talking abvout centralised society planning covering millions of millions of products than a reduction in your target period would makes things even more problemaic from your point of view. For one thing it would massively increase the already massively largew amount of bureaucratic input required to make the this hypeothetical system work by increasing the frequency with plans are generated anad so exacerbate the waste of resoruces that central planning entails

Of course there is need for a middleman - first of all because these decisions need to be registered to facilitate social accounting at the end of the period, and second because it is not the job of each individual factory to know about the capacities of other factories. A central office can see that, Factory 108 having tragically blown up, it would be most expedient for Factory 109 to take up 80% of the additional workload, Factory 201 10%, and Factory 203 the rest. Then the central office can check in with the factories in question to see if that's alright - if the workers are willing to work the extra hours - and if not to think of something else.

No I dont see the need for any middleman when with the kind of distributed computer networks we have to day it is would be quite possible for a communist production unit or distribution store to acces the data of nearby suppliers (including details of buffer stocks held by them) and approach who they think would be approariate on the basis of their own localised knowlege which is, in any case, likely to be superior what to some remote "central office" might have in their files. I frankly cant see the point of what you suggest. What sort of social accounting is it that needs to be facilitated and to what end?

I'm not sure that follows. The concentration of capital does not necessarily mean that disparate plans are linked together into one general plan - consider e.g. the pre-war rail cartel, where each national railway pursued its own agenda. Furthermore, as capital becomes concentrated, the complexity of capitalist production increases, the global scope of the market becomes increasingly apparent, and larger and larger strata of the ruined petite-bourgeoisie, previously producing essentially for local consumption, are drawn into capitalist production, increasing the anarchy of production.

No the concentration of capital does not necessarily mean that disparate plans are linked together into one general plan but it does mean, if your reading of "anarchy of production" is correct, a gradual reduction in this anarchy by virtue of a reduction in the number of competing units of capital. Instead what we find Marx and Engels saying is that far from "anarchy of production" diminsihing it increases along with the concentration of capital in capitalism. Whiuch suggest M & E likely meant something quite different to you when they spoke of anarchy of production

Yes, if central planning is in effect it is impossible to talk about more than one social economic plan, but the only time I used the plural "plans" I was talking about all manners of plans, from curricula to timetables.

OK so fruther confirmatiuon that you equate central planning with society wide planning

To an extent, yes, although probably only one part of the input-output matrix would have to be changed. However, if the initial calculations are not a problem, neither are the new calculations needed to correct the plan, assuming of course there is no need to correct it often, which we can assume would be the case.

You cannot assume anything of the sort anymore than you can assume that you would need only to alter one part of the input-output matrix and not some other part. That is not how an input output matrix operates. As I said before everything hangs together so the ratios in their entirety will have to be reconfigured., Moreover each discrepency between the Plan and what happens in the ground is additive or incremental and can mushroom into major shortfalls or alternatively embarrassing large surpluses for specifc lines of production with consequences that will ramify right through out the economy

Well, no, assuming the social knowledge of existing production capacities and material resources is adequate - and there is no reason to assume it isn't, there is no need to constantly redraft the plan. You talk about the global output of steel declines - but society would control the output of the steel industry. How would it declines, unless something truly unprecedented were to happen, to the effect of a significant percentage of the steelworks becoming inoperative?

Minor malfunctions will occur constantly, of course, and as I argued in another thread, there is a good way to take that into account: simply assume the production unit will not work with 100% efficiency, but with an efficiency corresponding to the weighted risk that it will become inoperative for X days - i.e. the coefficient would probably be something like:

(1 - (number of days the unit is inoperative/total planning period) * probability of the unit being operative for that number of days.

It's crude, and there's probably a better way to do it, but it's just an example of how these things can be taken into account.

Well I dont agree for the reasons stated. Even minor malfunctions which you agree will ocur, constantly have the capacity to magnify into major distortions when they accumulate incrementally and so render the whole Plan absolutely worthless. Its "chaos theory" Im referring to here basically. But that aside. even if for the sake of argument you were correct in assuming this, a polycentric system of planning involving a self regulating system of stock control would still be clearly superior to what you advocate on every conceivable ground that one can think of. And that is what truly puzzles me - why advocate something that really has nothing to recopmmend itself amd for which a much better alternative exists?

[Anglo-Saxon Philistine]

The quote function seems to be having a fit, again, and in any case I think that replying paragraph-by-paragraph would lead to a lot of repetition. Now, concerning buffers, you don't seem to have understood my question. So, allow me to repeat myself: how would the production units know how much of the buffer products to produce? Obviously different products require different quantities of buffer stock, e.g. a sufficient buffer of high-end workstations might be in the hundreds, whereas a sufficient buffer of bananas might be in the thousands. And equally obviously, even when considering one product, buffers of different sizes are necessary in different regions, at different points in time and so on (the buffer of Satsuma oranges in Japan, in winter, would need to be significantly higher than the buffer of the same fruit in Japan in summer, or in Croatia throughout the year).

So, the production units would need to assess the demand for their products (and the supply of products they need, as this also affects their ability to produce), and they would need to assess it at a global, society-wide scale. Even in the capitalist mode of production, a factory does not produce only for its immediate area, but for the world market. In socialism, of course, there would be no market, but there would still be a global circulation of products (of course, there are people who profess to be socialists, who think it is possible or desirable to return to the stage of local autarchy, but these are simply politically confused people).

The same goes for transportation - do you seriously propose it is possible for transportation of goods across the globe to be solved by "localised community decisions" (and why this fetish for localisation?). I don't think that is the case at all. How would the transport of copper from Bolivia to a factory in France (for example) be arranged in this manner?

The notion that there would be no feedback mechanisms in a centrally-planned economy is, quite frankly, bizarre. In fact I do not know if an economic arrangement that does not have a feedback mechanism is even possible. In fact the centrally-planned economy will most likely have extensive feedback mechanisms, with partial cybernetic control (similar in a way to the planned COMECON reforms of the sixties) and so on. I assume that what you wanted to say is that, in a planned economy, feedback mechanisms do not result in an automatic change in production quotas and schedules etc.

Well, yes. That, however, is the true strength of central planning. As I said, human planners are able to understand things that an automatic system would miss. They are able to look at the big picture, so to speak, to use their experience and insight to predict certain trends and so on. Any automatic system that would be able to do so - and I am quite sure these will be possible eventually - would be an artificial intelligence in its own right.

Consider, for example, two products. One is salt, the other a new action figure. Now, let us suppose that, if we plotted the consumption of these two products, the graphs would look similar - an almost constant rate of consumption with few fluctuations, and a short downward trend at the end of the period.

Human planners would immediately recognise that the consumption of salt in the new period will most likely remain similar to the constant rate of the previous period, and that the downward trend was most likely a fluke. Whereas the action figure is probably going out of fashion. An automated system couldn't pick up on this - it would have to use some model to predict future demand that would treat the two products as the same. Or it could treat them differently, but the distinction would have to be programmed in by human planners.

As for correcting the plan, it simply is not the case that minor adjustments to the plan are impossible. The important thing is that the Leontiev matrix is not nonzero everywhere - in fact in realistic situations it is sparse. Wheat is not an immediate input for the production of germanium, neither is whiskey, and so on. Even major industrial products, that require hundreds of kinds of components, will result in a small subset of the matrix being nonzero. If there is a sudden spike in the demand for, for example, soap, that the buffer stock can't take care of, it should be possible to work with a significantly smaller subset of the full input-output matrix to calculate the additional workload for soap-producing units, and units that produce the predecessor products.

"Chaos theory" is the popular name for a very well-defined set of mathematical concepts and methods, and there is no real proof that economic systems are chaotic in this sense (and, of course, "chaotic" does not mean "intractable").

Sometimes, of course, no adjustment to the plan will be necessary, as we've seen in the case of the tragically exploded Dildo Factory 108 (I hope everyone made it out before the hypothetical explosion). Concerning that example, by the way, you asked what social accounting would be useful for. Well, among other things, for constructing the input-output matrix - society needs to know the quantities of input that are requires for a given amount of output. This involves monitoring the workload, materials assigned to each factory, the output, the manufacturing inefficiency, the availability of labour and so on, and so on. This is not something "local knowledge" can cover (and again, why the emphasis on local knowledge? local knowledge is potential centralised knowledge that is not available to most of society, which makes it much less useful than something that is available to any member of society), as I imagine most factory workers do not know the capacities of other factories (most of which would probably be distant).

In fact, that is the thing that bothers me about this proposal the most, that, like the market, it's essentially a faith-based endeavour. Signals are being exchanged, and economic units interact, and we're supposed to take it on faith that this will somehow produce an optimal result - as opposed to consciously making sure that it does.

I think that, contrary to your claim, reducing the target period helps keep planning manageable, assuming there is enough processing power to pull it off (and there is), as any prediction will go berserk after some time (not just the economic prediction, but also the weather predictions that are necessary for agriculture etc.).

As for the supposed authoritarianism of central planning, you do realise that vague impressions do not add up to a cogent argument? And, to be honest, I find the notion of authoritarianism that the SPGB/WSM members of this site advance to be alternately infuriating and hilarious. The SPGB itself is on record dismissing genuine authoritarianism and oppression. But asking people to follow a democratic decision? Oh the horror.

I mean, what do you expect? Members of society reach an agreement on how to operate the means of production in one period, and then one lone rebel without a cause tries to spoil all of that. Well, no. If you can't play nice with people, people won't play with you.

Concerning sewage systems in Afghanistan, or Upper Volta, which I suspect is actually Burkina Faso, or the Netherlands, or whatever, of course I suspect most city plans will be approved by the central democratic bodies almost by default. But if the Burkinabe raion wishes to pollute the Volta river, or if the Amsterdam soviet wishes to block an important port, to be blunt, why should society allow them to? Because they own "their" area? This sort of sectoral particularism is inimical to socialism.

Finally, again I would like to reiterate that questionnaires were merely one possible data-gathering mechanism. I suspect the most important data will be collected by following the flow of products through distribution centres and taking into account things like the profile of the average consumer, the changes in the demographics etc. In-store interviews (which is horrible manager-speak for the workers in the distribution centres asking people about their preferences) are another possibility.

I don't think the fact that most people only consume a limited amount of products on a daily basis means that they are not capable of deciding about the allocation of other products. In fact the other products only exist to enable the production of consumer goods, and certain other products such as scientific equipment, material for the construction of new buildings etc. The plan is chiefly to be assessed on its capability to provide consumer goods.

I think I have written enough, although the formatting might have been better.

[ckaihatsu]

I'll jump in here to suggest that perhaps, in many minds, the post-capitalist 'political' and 'economic' get too tangled-up and interwoven, with messy conceptions of both, as a result.

While discussions can continue over how rigid-to-flexible central planning should be, I'll point out that anything involving an overall social *direction* -- in the sense of what civilization is *for* -- should be considered 'political', while all else -- the nitty-gritty -- is *economic*, and should be addressed in mostly *logistical* terms.

I have no doubt that a post-revolution communistic gift economy would be mostly sufficient everywhere, with enough liberated-labor and mutual coordination to effect the main point of bringing humaneness to humanity for the first time in human history.

It's *beyond* the basics where matters of complex production and supply-chain linkages come to the fore -- my own concern would be with the supply of liberated labor for all of the distributional logistics being discussed here.

Unfortunately, this particular thread's topic may not be very motivating for most, either now or in a future reality, and people might wonder to what they should reasonably give their labor for, if one can more-easily enjoy a more-modest, reliable existence *without* such complicated and dubious considerations, and the exertions of one's more-discretionary efforts.

Regarding the role of liberated labor within the context of a centralized political economy (read: mass political involvement and common-direction-planning), here's a summation / treatment from another thread:

[If] simple basics like ham and yogurt couldn't be readily produced by the communistic gift economy, and were 'scarce' in relation to actual mass demand, they *would* be considered 'luxury goods' in economic terms, and would be *discretionary* in terms of public consumption.

Such a situation would *encourage* liberated-labor -- such as it would be -- to 'step up' to supply its labor for the production of ham and yogurt, because the scarcity and mass demand would encourage others to put in their own labor to earn labor credits, to provide increasing rates of labor credits to those who would be able to produce the much-demanded ham and yogurt. (Note that the ham and yogurt goods themselves would never be 'bought' or 'sold', because the labor credits are only used in regard to labor-*hours* worked, and *not* for exchangeability with any goods, because that would be commodity production.)

This kind of liberated-production assumes that the means of production have been *liberated* and collectivized, so there wouldn't be any need for any kind of finance or capital-based 'ownership' there.

---


And:

My framework [...] addresses the *outer reaches* of what a strictly moneyless communistic 'gift economy' could conceivably cover. Some on the revolutionary left have suggested that perhaps a *remnant* of the former markets could exist within a post-capitalist social order, to cover luxury / specialty production, since such might be *unaddressed* by the more mass-oriented mainstream gift economy.

However, a regular market-based approach to luxury / specialty production could very well be more cumbersome than it's worth -- it would be tolerating a kind of exchange-values-based 'black market' within an otherwise free-access social paradigm.

My 'labor credits' is meant to acknowledge a post-capitalist liberated-labor on its own terms, without resorting to backsliding to any system of exchange values.

A post-capitalist political economy using labor credits

http://www.revleft.com/vb/blog.php?bt=14673

[robbo203]

The quote function seems to be having a fit, again, and in any case I think that replying paragraph-by-paragraph would lead to a lot of repetition. Now, concerning buffers, you don't seem to have understood my question. So, allow me to repeat myself: how would the production units know how much of the buffer products to produce? Obviously different products require different quantities of buffer stock, e.g. a sufficient buffer of high-end workstations might be in the hundreds, whereas a sufficient buffer of bananas might be in the thousands. And equally obviously, even when considering one product, buffers of different sizes are necessary in different regions, at different points in time and so on (the buffer of Satsuma oranges in Japan, in winter, would need to be significantly higher than the buffer of the same fruit in Japan in summer, or in Croatia throughout the year).

Obviously the size of the buffer would depend on a number of things:

- nature of the product itself, its durabilty and lifespan
- elasticity of demand for the product in question
- seasonal factors
- technological factors e.g. Toyota style "lean" prpduction v Fordist mass production

So its difficult to generalise on this subject. All the more reason for a flexible approach which is precisely what a self regulating system of stock control offers

So, the production units would need to assess the demand for their products (and the supply of products they need, as this also affects their ability to produce), and they would need to assess it at a global, society-wide scale. Even in the capitalist mode of production, a factory does not produce only for its immediate area, but for the world market. In socialism, of course, there would be no market, but there would still be a global circulation of products (of course, there are people who profess to be socialists, who think it is possible or desirable to return to the stage of local autarchy, but these are simply politically confused people).

I wouldnt disagreee with the claim that there would still be a "global circulation of products" in socialism. Its a matter of emphasis though and I would certainly hope there would be a significantly stronger emphasis on localised production in socialism for all sorts of reasons not just reduced transportation costs. It is the capitalist principle of comparative advantage a la Ricardo that leads to a reduction of local diversity and the absurdity of "coals to newcastle" type phenomena. For example, the idea of flying in fresh vegetables from sub Saharan African countries to Europe on quite a large scale strikes me as ridiculous and is only possible because of the dirt cheap wages paid to African workers (the same applies to the flow of Europes toxic waste products in the other direction). I also happen to think that much of the global circulation of products today consists in tacky crap which will either not be wanted in a socialist society or will be made much more durable when producers no longer need to build in planner obsolence into their products to ensure quicker turnovers. In short we need to be thinking more in terms of sustainable production in a socialist society and a big part of that is the shift towards more localised production.

The same goes for transportation - do you seriously propose it is possible for transportation of goods across the globe to be solved by "localised community decisions" (and why this fetish for localisation?). I don't think that is the case at all. How would the transport of copper from Bolivia to a factory in France (for example) be arranged in this manner?

But I am not denying there will be long distance interactions of this nature. I dont even rule out, for instance, the idea of global agencies coordinating maritime transport which suppliers of copper could approach in response to the demand for copper from France. My position is more nuanced than you seem to imagine. Im not an advocate of "local autarky" even though I consider a shift towards more localised production would be a good thing. I see planning in socialism in terms of a polycentric planning system operating at different levels - local , regional and global - with the bulk of it being done locally, significantly more so than is the case today.

The notion that there would be no feedback mechanisms in a centrally-planned economy is, quite frankly, bizarre. In fact I do not know if an economic arrangement that does not have a feedback mechanism is even possible. In fact the centrally-planned economy will most likely have extensive feedback mechanisms, with partial cybernetic control (similar in a way to the planned COMECON reforms of the sixties) and so on. I assume that what you wanted to say is that, in a planned economy, feedback mechanisms do not result in an automatic change in production quotas and schedules etc.

With respect, you dont understand what a centrally planned economy is - at least in its classic sense of a single society wide plan - if you think it is "bizarre" that it should have no feedback mechanism. If it has a feed back mechanism then by definition it is no longer classic central planning. The total pattern of production is no longer planned, only the parts of that global pattern, so that what you call the global pattern is something that is merely revealed or picked up via a complicated and comprhensive monitoring process rather than planned in advance, In other wordsm, that global pattern is the emergent property of multiple interacting plans. Monitoring the global pattern of economic interactions is not the same thing as planning them in an a priori sense and I think this is where you get confused. A feedback mechanism means the intrusion of other plans impacting on the existing plan (or plans) and so is by definition polycentric not unicentric. Thus the refrigerator producing sector of the economy encounters a spike in demand for refrigerators which translates into an increased demand for raw materials from its suppliers. The plan for "more refrigerators", in other words, emanates from that sector which then impacts on other sectors and modifies the latters' own output plans

Well, yes. That, however, is the true strength of central planning. As I said, human planners are able to understand things that an automatic system would miss. They are able to look at the big picture, so to speak, to use their experience and insight to predict certain trends and so on. Any automatic system that would be able to do so - and I am quite sure these will be possible eventually - would be an artificial intelligence in its own right.

But again I feel you are not really understanding the argument. You seem to making a completely false dichotomy between a self regulating system of stock control - the automatic feedback mechanism I talked of - and planning. Its as if you think the one precludes the other which is just not the case

Consider, for example, two products. One is salt, the other a new action figure. Now, let us suppose that, if we plotted the consumption of these two products, the graphs would look similar - an almost constant rate of consumption with few fluctuations, and a short downward trend at the end of the period.

Human planners would immediately recognise that the consumption of salt in the new period will most likely remain similar to the constant rate of the previous period, and that the downward trend was most likely a fluke. Whereas the action figure is probably going out of fashion. An automated system couldn't pick up on this - it would have to use some model to predict future demand that would treat the two products as the same. Or it could treat them differently, but the distinction would have to be programmed in by human planners.

Yes of course human planners using their judgement have a very important role to play in socialist production, operating along side the automatic mechanism we have spoken of. For instance, we talked earlier of the size of buffer stocks which would vary according to the product in question. It would be those individuals operating the production units and distributions stores in a socialist society - the "planners" in that sense - who would make judgements of this nature based on their own experiences, intuitions and so on.

As for correcting the plan, it simply is not the case that minor adjustments to the plan are impossible. The important thing is that the Leontiev matrix is not nonzero everywhere - in fact in realistic situations it is sparse. Wheat is not an immediate input for the production of germanium, neither is whiskey, and so on. Even major industrial products, that require hundreds of kinds of components, will result in a small subset of the matrix being nonzero. If there is a sudden spike in the demand for, for example, soap, that the buffer stock can't take care of, it should be possible to work with a significantly smaller subset of the full input-output matrix to calculate the additional workload for soap-producing units, and units that produce the predecessor products.

Again you are still not understanding the issue. Far from saying that it is the case that minor adjustments to the plan are impossible, I am saying instead that it is absolutely INEVITABLE that minor adjustments to the plan will occur which will then overwhelm the Plan and render it totally impotent and useless. It will no longer be a single society wide plan but will succumb to polycentric planning precisely by virtue of those numerous minor adjustments which I repeat will have an accumulative or incremental impact on global pattern of output.

In my profession as a landscape gardener I sometime do a fair bit of stone wall building. Have you ever built a wall on uneven terrain? Sometimes you just have to use your eye. But what I find not infrequently is that small errors made at the start of a wall can magnify into very noticeable differences at the end as you struggle to maintain a level top. Its a good analogy for how minor adjustments to the plan - and there will be countless numbers of such minor adjustments needed every moment of every single day globally - can accumulate to throw the Plan completely out of kilter with reality. You will no longer have a Plan as such to guide the overall pattern of production by . The overall pattern of production will simply become the reflective by-product of multiple plans interacting with each other as multiple players in the economy strive to adjust their plans in the light of the changing plans/demands of others...

"Chaos theory" is the popular name for a very well-defined set of mathematical concepts and methods, and there is no real proof that economic systems are chaotic in this sense (and, of course, "chaotic" does not mean "intractable")..

No? I suggest you read Marx on the subject of "fictitious capital" and asset bubbles

Sometimes, of course, no adjustment to the plan will be necessary, as we've seen in the case of the tragically exploded Dildo Factory 108 (I hope everyone made it out before the hypothetical explosion). Concerning that example, by the way, you asked what social accounting would be useful for. Well, among other things, for constructing the input-output matrix - society needs to know the quantities of input that are requires for a given amount of output. This involves monitoring the workload, materials assigned to each factory, the output, the manufacturing inefficiency, the availability of labour and so on, and so on. This is not something "local knowledge" can cover (and again, why the emphasis on local knowledge? local knowledge is potential centralised knowledge that is not available to most of society, which makes it much less useful than something that is available to any member of society), as I imagine most factory workers do not know the capacities of other factories (most of which would probably be distant).

But again you are reading this all wrong. The "tragically exploded Dildo Factory 108" is yet another instance of why we have to build into production system a degree of institutional flexibility which is simply not available with a system of society wide planning. The more I read what you say, the more convinced am I - with all due respect - that you dont understand the issue at stake here. Hypothetically , were a system of society-wide planning to be in place then the explosion at Dildo factory 108 would mean a loss of output which would have to be accommodated somehow through a process of materials re-balancing which means reconfiguring all those carefully worked out input-output ratios all along the line and the reassignment of production targets accordingly . But there will probably be thousands of equivalents of exploding Dildo factory 108 happening every day across the world - not necessarily in the sense of exploding factories but in the sense of disrupted production. Transportation delays - perhaps a lorry containing crucial high value equipment which jack-knifes on the highway causing the complete loss of all its contents - can have the same disruptive effect on the pattern of output. This is to say nothing of large scale or widespread shifts in the demand for various products which the Plan had sought to base its output targets upon and which it would need to stick to for the Plan to maintain any semblance of coherency

On the subject of local knowlege, well again I assume you would accept that a local body such as a production unit would better know the state of affairs on the ground locally than might some remote central office. I mean, that almost goes without saying. A local factory would for example be better acqainted with the dispostion of stock within its four walls. Years ago back in South Africa I remember briefly working in metals factory cum foundry as a teenager just out of school and having to traipse around differents parts of the factory to confer with the foremen on the spot about the number of metal plates or rods or whatever so as to get a composite picture of daily output, which figures would be recorded back in the Admin dept. No doubt these days its all computerised but the same principle applies. Almost by definition local knowlege is bound to be superior to centralised knowlege in respect of the local set up and since the world consists of millions of localities it would be madness to dispense with the accumulated body of such local knowlege. Centralised knowlege actually depends on it. And while it is true that "most factory workers do not know the capacities of other factories" they do know the capacity of their own factory better than some central office. This is a matter of simple commonsense and logic

However, and this is the point, they dont need to go via some cumbersome central office to get some idea of the capacity of other factories (albeit inferior to the idea that workers at the latter have about their own factory's capacity). This is where you approach smacks of a kind of outdated, old fashioned way of doing things, harking back to the days of GOSPLAN. There is such a things as "distributed computer networks" these days that allows you to bypass such unwieldy middlemen. What can a central office tell you that you cannot already know by such means. You have accused me of making a fetish out of localised production but I would say on the contrary that you are making a fetish out of centralised decision making and information when things have moved on a long way since GOSPLAN. Look at the internet!

GOSPLAN's plans were incidentally a complete farce. Not a single plan was ever carried out to the letter. The plans were constantly adjusted, as they has to be and as I have been telling you constantl,y in response to changing economic realities. The plan was only "met" by virtue of the planners moving the goal posts - routinely and repeatedly changing the output targets - to make it appear that the Plan had been met. In reality Soviet central planning, so called, was little more than a wishlist invented by the planners for propaganda purposes. Little wonder the whole system collapsed under the weight of its own ineptitude.

In fact, that is the thing that bothers me about this proposal the most, that, like the market, it's essentially a faith-based endeavour. Signals are being exchanged, and economic units interact, and we're supposed to take it on faith that this will somehow produce an optimal result - as opposed to consciously making sure that it does.

I dont understand what you are saying here at all. There is nothing "faith-based" about a self regulating system of stock control. It is the most accurate indicator available to us of the actual take-up rate of stock upon which we can make informed decision about future output. Without that, what else is available to us? You have suggested sending out questionaires to the public although I appreciate that you do not wish to attach too much importance to this suggestion. But there are millions and million of products of all kinds in a modern economy. Is the public going to have to wade through a circular the size of a hefty tome once every five years or whatever to indicate what it wants produced so that the central planners can put this all together in the form of a vast input output matrix? I think not

I think that, contrary to your claim, reducing the target period helps keep planning manageable, assuming there is enough processing power to pull it off (and there is), as any prediction will go berserk after some time (not just the economic prediction, but also the weather predictions that are necessary for agriculture etc.).

No, I disagree. Reducing the target period doesnt make planninmg more "manageable" but even less manageable. For one thing you have to repeat the whole cumbersome process of consulting the public, going through the process of materials re=balancing etc etc once a year as opposed to once every 5 years. That means even more pointless bureaucracy. Also, again, I repeat its not a question of whether or not there is another processing or computational power to "pull it off". The intractable problem with central planning lies not with inadequate computing power but in the very nature of what it seeks to "plan". The Plan will have to be constantly modified to keep up with changing condistions to that in effect there never will be a Plan to implement in the first place. It will never ever become available in a usable form. It will be reduced to nothing more than a rather pathetic catch up attempt to monitor the flow of products and resoruces through the production system rather than actually plan for that flow in an apriori sense (the only meaningful definition of "planning", incidentally)

As for the supposed authoritarianism of central planning, you do realise that vague impressions do not add up to a cogent argument? And, to be honest, I find the notion of authoritarianism that the SPGB/WSM members of this site advance to be alternately infuriating and hilarious. The SPGB itself is on record dismissing genuine authoritarianism and oppression. But asking people to follow a democratic decision? Oh the horror.

I mean, what do you expect? Members of society reach an agreement on how to operate the means of production in one period, and then one lone rebel without a cause tries to spoil all of that. Well, no. If you can't play nice with people, people won't play with you.

Im not quite sure what you are saying here. Of course democracy has an important role to play in a socialist society and this means individuals abiding by democratic decisions. Ive already outlined my view of how democratic collective decisionmaking bodies can coexist at different levels - local regional and global - alongside, as well as interacting with, a self regulating system of stock control which at least as far as most consumer products are concerned is a matter of individual decisonmaking rather than collective decisionmaking. There is a balance here between individual and collective decisions that is being posited which is more realistic than what you offer.

Community and large scale projects are a very good instance of where democratic collective decision-making is clearly required. Deciding whether to take an apple or an orange from your local store is not and should not be a matter of democratic decision - it would be daft even to attempt that - but of the individual herself making a decision.

The problem is that you seem to want to present the process of decisionmaking in its entirety - including whether or not one should be able to take an apple or an orange from your local store - as something which ought to be subject to democratic sanction. Ironically what you are suggesting will end up as the most undemocratic and the most authoritarianm outcome conceivable . Not only will individuals necessarily be subjected to the will of the larger society in respect of their detailed consumption via a rigorous system of rationing (with all the opportunities for corruption this presents) but the very process of meeting the very detailed production targets of million of products as specified in the Plan will entail almost inevitably some kind of system of compulsory labour. You have already hinted at this yourself in your earlier statement as follows

"A central office can see that, Factory 108 having tragically blown up, it would be most expedient for Factory 109 to take up 80% of the additional workload, Factory 201 10%, and Factory 203 the rest. Then the central office can check in with the factories in question to see if that's alright - if the workers are willing to work the extra hours - and if not to think of something else"

So what of the workers for factory 109 dont comply with this "request" from above - for whatever reason. (And what incidentally about the division of labour in your scheme of things? Are workers not to be allowed to chose when and where and at what they work as Marx suggested? How then do toy force Factory 109 to take up 80% of the slack?) The point is that for the Plan to work on its own terms the destruction of Factory 108 will mean workers at some other factory have to comply. If they dont the Plan has to be redrawn in toto. So by a reductio ad absurdum argument for the Plan to work on its own terms compliance is necessary and this, Im afraid, entails compulsion, Under the alternative proposal I have suggested - a self regulating system of stock - the failure in the output of dildos to meet the demand for dildos will of course be picked but it will not be fatal to the system as it would be in the case of society wide planning. There will simply be a shortage of dildos but a system of self regulating stock control will continue

Concerning sewage systems in Afghanistan, or Upper Volta, which I suspect is actually Burkina Faso, or the Netherlands, or whatever, of course I suspect most city plans will be approved by the central democratic bodies almost by default. But if the Burkinabe raion wishes to pollute the Volta river, or if the Amsterdam soviet wishes to block an important port, to be blunt, why should society allow them to? Because they own "their" area? This sort of sectoral particularism is inimical to socialism.

Well you see, once again, you seem to suggesting here a postion that is at variance with your stated support for the idea of one single society-wide plan. You admit of the possibility of multiple plans - "I suspect most city plans will be approved by the central democratic bodies almost by default" - just as your# earlier talked of the possibility of the Plan being adjusted without grasping how this strikes at the very coherency and integrity of the whole concept itself . In short, you dont seem to really understand what is theoretically at a stake here. Which is why I have always suspected that what you are advocating is not classic central planning as such but merely a greater degree of centralised planning in what amounts to essentially a polycentric planning system. In other words you advocate what is really at most "indicative planning" though you dont seem to recognise this.

Of course if the citizens of Burkino Faso wish to pollute the Volta then it is quite approproate that citizens of other parts of a socialist world might wish to intervene and raise objections much as environmental activists do so today. I have no objection that. Its a question of where you draw the line - as it always is! You wouldnt surely want to insist that the city plan for Ouagadougou, the capital, should be opposed by the citizens of Seattle because it recommends the construction of a dildo factory in one city district and not another? What about the principle of subsidiarity (http://en.wikipedia.org/wiki/Subsidiarity). Once again, it is a case of respecting localised knwlege rather than arrogantly riding roughshod over it. Ignoring local knowlege is also something "inimical to socialism" I would suggest...

Finally, again I would like to reiterate that questionnaires were merely one possible data-gathering mechanism. I suspect the most important data will be collected by following the flow of products through distribution centres and taking into account things like the profile of the average consumer, the changes in the demographics etc. In-store interviews (which is horrible manager-speak for the workers in the distribution centres asking people about their preferences) are another possibility..

Again I dont wish to pooh pooh your various suggestions here. All of them, I am sure, have a place - even the idea of consumer questionnaires. But, still, I come back again and again to the central point - why ignore the vital and massively important data that a self regulating system of stock control furnishes production units in a socialist society. What better presents a picure of the actual pattern of consumer preferances and the shifts in this pattern than this? That is my challenge to you and anyone else who rejects this proposition - show me a better alternative

I don't think the fact that most people only consume a limited amount of products on a daily basis means that they are not capable of deciding about the allocation of other products. In fact the other products only exist to enable the production of consumer goods, and certain other products such as scientific equipment, material for the construction of new buildings etc. The plan is chiefly to be assessed on its capability to provide consumer goods

Actually I would challenge the claim that "most people only consume a limited amount of products on a daily basis means that they are not capable of deciding about the allocation of other products". To make an informed decision on the allocation of "other products" means an intimate acquaitance with the entire structure of modern production consisting of millions of different kinds of prpducts and even more in the speficiations and varieties of these prpducts when, to be frank i dont think such an acquaintance is proctical available to any of us as individuals. The production system is just to vast for any one of us to comprehend in detail, Im no expert on the manufacture of dildos and to be frank I am quite happy to let those familiar with this process decide for themselves what inputs they need for the purpose of producing such things. I think you will find probably most people will think the same. But in no way does that detract from the practicality of establishing a socialist system of society