Economics of the alternative

Marxists are often accused of doing a lousy job of explaining how socialism would do consciously what the capitalist market system can do without anyone being all that aware of what is going on.

But that’s OK, because the efforts of bourgeois economists more than make up for this. Their mission has been to show how capitalism is good at allocating resources efficiently (if sometimes with a bit of restrained government tweaking). But in the process they have had to explain what this means and the role of a price system in achieving  it. Thank you chaps. The revolution will be forever grateful.

We just need to drive home how a system of social ownership will be able to avail itself of this unintentionally provided wisdom. Making the case is fairly easy. Debunking the “calculation debate” is particularly easy. (More on that in a few months but in the meantime see here.)

The hard job for people like me will be (1) convincing ourselves and others that we really can transcend the profit motive and rely instead mainly on intrinsic motivation and (2) developing a transitional program given that it will take time for people to take on the abilities, habits and inclinations needed to make social ownership viable.

By the way, I now find it easier to tell people what I am working on without being put on the defensive. I usually say something to the effect that it’s been a bit unfashionable for quite a long time but now that capitalism is collapsing all around us I am expecting a bit more interest. This is generally greeted with a nod.

I’ve just revised the sections on investment, money and public goods in the main article at my Economics of Social Ownership website. I have cleared out all mention of quasi-public goods and removed all the murky speculation from the money section. The old versions of these sections are stored here purely for reference.

23 Responses to “Economics of the alternative”

  1. 1 Arthur

    The linked paper is very interesting. Look forward to detailed discussions. Should be distributed widely in present form for feedback in producing subsequent versions.

    Supplement needed is a detailed treatment of the transition, demonstrating viability of shift NOW under conditions where workers still have the same culture as at present and skills at economic management and government are largely confined to people thoroughly imbued with bourgeois ideology and out to maximize their own rather than social welfare. Also prior to the elimination of menial work etc. In particular considering a transition made necessary by devastating capitalist crisis, with mass unemployment etc.

    Present version makes passing reference to some of these issues but is written from the perspective of the future rather than transition so we still need to elaborate a theory of transition from the present. Such a theory would also need to assist in formulating concrete programs. It would be more explicit about the central assumption of the article – that ownership of the means of production and the possibility of living from property income is actually being removed the present owners and denied to any would be new proprietors. That is likely to be an epoch of turbulant transition! Needs detail on replacing those aspects of property ownership that are used to convince both workers and middle elements that they have a stake in the system (eg housing finance and superannuation and especially how to handle the gaps between middle strata and others without uniting the middle strata to the enemy).

    Some major aspects that need more mention even in the article focussed on the future and are also relevant to the transition include.

    1. Industrialization of the third world. Massively increasing flow of funds from developed countries to underdeveloped.

    2. Massive diversion of investment to R&D stunted by capitalism.

    3. Increase in accumulation at expense of unproductive expenditure on useless non-productive parasitism on behalf of rulers.

    PS I agree with footnote 9!

    PPS My email and printer are both down. Please bring printed copies for discussion.

  2. 2 confused

    Google this to solve the problem! The Venus Project and Zeitgeist Movement. Its what I have been searching for on this site.

  3. 3 Arthur

    I found this 40pp UNDP paper on Technological Implications of New Growth Theory for the South very interesting.

    One the one hand it expresses some of the insights about capitalist dynamism central to Marxism from the Communist Manifesto on and exposes some of the vulgarity of mechanistic neo-classical orthodoxy. On the other hand it has no reference to Marx and despite the glaring contradiction between private property and growth implicit in its own analysis it concludes with the expectation that the dynamic forces of production will produce the opposite of the crisis now visible as they collide with the existing social relations.

  4. 4 tomb

    I have been following the discussions at strange times however no time to add anything useful. I would like to comment briefly on the motivation dynamic change. I skimmed through Davids article and will look at it in detail ASAP. I agree with what he is saying.

    I don’t think we need to be looking to introduce anything new regarding motivation as it is already there. The motivation dynamic is changing as we speak and has been for some time. Companies moved to teamwork more than 20 years ago and now it is assumed. The initial increase in productivity was significant and consequently it was embraced by not only business but also in nearly every other field including education and sport. The teamwork productivity gains leveled out after a short time but there is no turning back as it is still a superior system. Workers embraced teamwork initially until it became obvious their role was limited and there was a small increase in job satisfaction and a large increase in profits.
    There is also the contradiction of teamwork and competition for promotion and now job retention. This contradiction also exists in education where students recognise the benefits of group work but are in a competitive environment for places at university etc.
    Workers and students are aware of the limitations of competition and it’s disruptive influence on teamwork. This is a major frustration but unfortunately they see no alternative at the minute The dynamic that is required to motivate in socialism is already there and waiting to be unleashed.

    BTW There is around 40% of Australians involved in volunteer work!

  5. 5 Arthur

    I like the idea that the dynamic required to motivate in socialism is already there and waiting to be unleashed.

    Needs fleshing out as part of developing a plausible alternative.

  6. 6 tomb

    will try to find some time soon to get on to this

  7. 7 DavidMc

    Here are just a few rough thoughts.

    Team work makes the individual’s job description less narrow which means work will have more interest, develop their abilities more (including ‘people’ skills) and cut out the more immediately oppressive bossing.

    To what extent can groups rather than individuals make decisions? What is the connection between decisionmaking and reponsibility? If an individual is given responsibility for something, how much control do they need over their subordinates?

    The principle that you can only be responsible (ie accountable) for what you have control over certainly on the face of it suggests that authority (decisionmaking) needs to be highly concentrated. Although, an astute manager knows that their subordinates, assuming that they are competent and trustworthy, can be left to get on with it. Also any job with complexity and uncertainty requires the performer to be allowed a lot of initiative. Only the performer can know what needs to be done from one moment to the next. The higher the level of competence and trustworthiness, the more that people can be left to get on with it.

    But what about a group taking on the task that was previously performed by their manager? This means everyone in the team having the competence to take on the work. Otherwise we are talking about a team or individual above the team.

    A big question is how far can team work eliminate hierarchy. In Praise of Hierarchy (HBR Jan-Feb 1990) is worth a read. The author puts his views on what should determine hierarchical layers.

    “Hierarchical layers depend on jumps in responsibility that depend in turn on how far ahead a manager must think and plan.” These jumps are also associated with jumps in ability including training and experience etc.

    If this is true then ensuring that large numbers of people are not stuck in the bottom levels seems to depend on greatly increasing the general level of ability.

  8. 8 tomb

    Dave, I think that teams can make decisions with out all individuals being savvy to everything involved in the decision. Everyone must take responsibility for the team decision but they all have different input to come to an agreed position. It is therefore a matter of skilling up teams as opposed to individuals.

    Taking decisions that managers previously took is really a matter of having the information network and experience the manager has. Management is now more about leadership than managing. You have to be a good leader and take responsibility but you can’t lead if you are not seen as a team player. There appears to be a lack of leaders and too many managers at the minute. This may be because the managers have to make a decision and teams just aren’t that motivated under the present conditions.

    Rising from the bottom requires experience and therefore enhancement of teams. Captains of industry may seem to have a greater understanding of the universe when in reality they just have more experience and a better network to get things done.

    Communities are now building networks and there is a push by government to set up a peak body for community groups. This no doubt is to get some control over these groups.

    I think it is only hierachy at the minute because they value one higher than the other. It is just processes and layers as you state. The idea I would think is to bring these layers closer together. The original idea and the final product are part of the same dynamic with different roles and interact back and forth to produce an outcome. I think we have to stop treating one part of the process as more important or higher than the other. No one can know everything about the whole process, we have to rely on each other to play their role.

  9. 9 Arthur

    ɟɟnʇs sıɥʇ uo ɹǝʇʇǝq op oʇ ǝʌɐɥ oʇ ƃuıoƃ ǝɹǝʍ

  10. 10 DavidMc

    ¡pǝǝpuı sǝʎ

  11. 11 poton

    I can not believe that no one has ever mentioned the name Jacque Fresco
    ,the man who has a perfect plan that six billion people could…. Design the future!Six billion people surely could come up with a few answers to improve on it. This man has been around 35 years working on the project. Marxists may have dun a lousy job. For a man of his time he was a genius of his time. Today’s man is still living in the stone age. Jacque’s plan goes further than utopia,communism, or whatever you would like to call it. Once man figures out that money does hold mans potential back. The world would be a better place, if we just use the scientific method.Then put your common sense with your book sense and you have humanity. Please look the word up.
    This formula alone T 70
    2 =_________
    percent growth unit time

    shows me that if we wait to long….. well stupidity goes a long way. Hell no I never said I was a scientist,but common sense goes half way. Just act like a man and do it for the greater good of mankind. My God which I never heard any scientist say,”there is no such thing as a supreme being” gave me a brain to use wisely. With knowledge of a vast universe I go do the same job every day. Then I hear someone say,”well what else would u do. Well I would volunteer.
    The knowledge of a lot of things are hear now, just like they were when Jacque went on Larry King in 1973. Geothermal energy………. What the hell is that! There are more good people in the world than the t.v.,radio,etc leads you to believe.

    So you say we live in a democrazy. sorry democracy. What was the last thing you voted on that effected your life. A government that creates money out of nothing, and then pay interest on that which came from nowhere.How does a country every get out of debt? I that we were the government. I mean we are paying the bill. This is not how i choose to live. Daddy told me,his dad told him, and that is when credit came to be. Can any of you smart people tell me who the president was that wish he had never signed that bill. Now you see banks go up just as fast as churches. Where else does one get free money?

    Please can the smart people come together, because im just a dumb ass redneck from south carolina. Im holding a three month old girl right now so i dont care about grammer. jor the reason people here teach but not speak english. and use the brain we have to be on the moon already sorry i mean mars already. I would like to see solutions before 12:00. Its alerady proven that we are all connected some how remember kevin bacon how every movie star (one millioin peole) could be connected by a moive. so theoredicly we should have 340 milloion reponsess by then. middle class and lower are what fish eat,algy micro organisms,mice, peole have the power not weapoons here on eart. perhaps for aleion life, if they are anything like man. well think about they came to us first.if you listened to any scientist thats way down there. maybe we could show them first we came in the name of peace, to further the knowledge oh the meaning of humanity. please pay it forward and do something hard for someoneelse besides your self. i know human nature or my daddy told me to. well daddy is human made to make mitakes but learn from them. people have the power people have the power, enough

  12. 12 poton

    T = 70
    2 percent growth time

  13. 13 Arthur

    My view is that the transformation of work relations will be a long historical struggle, closely connected with the abolition of wage labour itself.

    The starting point for socialism has to be state monopoly capitalism with a revolutionary democratic state instead of a reactionary bourgeois state. That this is only a starting point and can end badly has been thoroughly demonstrated by history. That there is some other, more pleasant, path remains an illusion.

    Here’s some food for thought from Lenin’s The Impending Catastrophe and How to Combat It written in September 1917, a month before the October revolution.

    Everybody talks about imperialism. But imperialism is merely monopoly capitalism.

    That capitalism in Russia has also become monopoly capitalism is sufficiently attested by the examples of the Produgol, the Prodamet, the Sugar Syndicate, etc. This Sugar Syndicate is an object-lesson in the way monopoly capitalism develops into state-monopoly capitalism.

    And what is the state? It is an organisation of the ruling class — in Germany, for instance, of the Junkers and capitalists. And therefore what the German Plekhanovs (Scheidemann, Lensch, and others) call “war-time socialism” is in fact war-time state-monopoly capitalism, or, to put it more simply and clearly, war-time penal servitude for the workers and war-time protection for capitalist profits.

    Now try to substitute for the Junker-capitalist state, for the landowner-capitalist state, a revolutionary-democratic state, i.e., a state which in a revolutionary way abolishes all privileges and does not fear to introduce the fullest democracy in a revolutionary way. You will find that, given a really revolutionary-democratic state, state- monopoly capitalism inevitably and unavoidably implies a step, and more than one step, towards socialism!

    For if a huge capitalist undertaking becomes a monopoly, it means that it serves the whole nation. If it has become a state monopoly, it means that the state (i.e., the armed organisation of the population, the workers and peasants above all, provided there is revolutionary democracy) directs the whole undertaking. In whose interest?

    Either in the interest of the landowners and capitalists, in which case we have not a revolutionary-democratic, but a reactionary-bureaucratic state, an imperialist republic.

    Or in the interest of revolutionary democracy—and then it is a step towards socialism.

    For socialism is merely the next step forward from state-capitalist monopoly. Or, in other words, socialism is merely state-capitalist monopoly which is made to serve the interests of the whole people and has to that extent ceased to be capitalist monopoly.

    There is no middle course here. The objective process of development is such that it is impossible to advance from monopolies (and the war has magnified their number, role and importance tenfold) without advancing towards socialism.

    Either we have to be revolutionary democrats in fact, in which case we must not fear to take steps towards socialism. Or we fear to take steps towards socialism, condemn them in the Plekhanov, Dan or Chernov way, by arguing that our revolution is a bourgeois revolution, that socialism cannot be “introduced”, etc., in which case we inevitably sink to the level of Kerensky, Milyukov and Kornilov, i.e., we in a reactionary-bureaucratic way suppress the “revolutionary-democratic” aspirations of the workers and peasants.

    There is no middle course.

    And therein lies the fundamental contradiction of our revolution.

    It is impossible to stand still in history in general, and in war-time in particular. We must either advance or retreat. It is impossible in twentieth-century Russia, which has won a republic and democracy in a revolutionary way, to go forward without advancing towards socialism, without taking steps towards it (steps conditioned and determined by the level of technology and culture: large-scale machine production cannot be “introduced” in peasant agriculture nor abolished in the sugar industry).

    But to fear to advance means retreating—which the Kerenskys, to the delight of the Milyukovs and Plekhanovs, and with the foolish assistance of the Tseretelis and Chernovs, are actually doing.

    The dialectics of history is such that the war, by extraordinarily expediting the transformation of monopoly capitalism into state-monopoly capitalism, has thereby extraordinarily advanced mankind towards socialism.

    Imperialist war is the eve of socialist revolution. And this not only because the horrors of the war give rise to proletarian revolt—no revolt can bring about socialism unless the economic conditions for socialism are ripe—but because state-monopoly capitalism is a complete material preparation for socialism, the threshold of socialism, a rung on the ladder of history between which and the rung called socialism there are no intermediate rungs.
    * *

    Our Socialist-Revolutionaries and Mensheviks approach the question of socialism in a doctrinaire way, from the standpoint of a doctrine learnt by heart but poorly understood. They picture socialism as some remote, unknown and dim future.

    But socialism is now gazing at us from all the windows of modern capitalism; socialism is outlined directly, practically, by every important measure that constitutes a forward step on the basis of this modern capitalism.

    What is universal labour conscription?

    It is a step forward on the basis of modern monopoly capitalism, a step towards the regulation of economic life as a whole, in accordance with a certain general plan, a step towards the economy of national labour and towards the prevention of its senseless wastage by capitalism.

    In Germany it is the Junkers (landowners) and capitalists who are introducing universal labour conscription, and therefore it inevitably becomes war-time penal servitude for the workers.

    But take the same institution and think over its significance in a revolutionary-democratic state. Universal labour conscription, introduced, regulated and directed by the Soviets of Workers’, Soldiers’ and Peasants’ Deputies, will still not be socialism, but it will no longer be capitalism. It will be a tremendous step towards socialism, a step from which, if complete democracy is preserved, there can no longer be any retreat back to capitalism, without unparalleled violence being committed against the masses.

  14. 14 Jad

    For those interested in where Poton is coming from, Jacque Fresco advocates a non-monetary, resource based economy. He used to be in Technocracy Inc, so I presume his economic ideas are influenced by Thorstein Veblen.

    Here is the website for the Venus Project (which looks rather more like a utopian end point rather than a practical starting point – but it has some good graphics):

  15. 15 Glenn Poston

    Hers another reason man cant go furter. Who holds us back but ourselves?

  16. 16 poton

    I didn’t know the venus project nor technocracy existed until a few weeks ago. Maybe Marxist,Thorstein Veblen,etc influence or think like we do. I cant help but think of the people who say,”what would we do or what would motivate us to live,invent… The list is so long and negative. It depresses me. What about our ancestors? What motivated the caveman? What motivated the revolution? The same holds true today. The willingness to defend our country while at the same time showing others what Americans stand for. Some think of Allen Watts to be an athiest. i never heard him once say there was no supreme being. He says how we want to be good. You can hear it form himself. All you have to do i visit the site and listen to audio. He talks of string theory, and he did in ’73. The motivation is out there. There have been a lot of great inventions not for money,but the greater good of mankind. I cant think of hardly any lately. So because he does it, she does it, I have to do it. analogy if I jump off the bridge u have to follow me. Well we have to do something. Is this day and time, even if it bad or good. Seems to be history of mankind. Why do a few people determin our future. analogy What if its the pilots turn to die, and I’m in the plane? So why do the keep making me pay interest, taxes etc when i could do it with a little help from my friends. When i ask if everyone at my job should make the same thing. Some say no, the higher paid jobs, yes lower paid. analogy why should a person washing equipment make the same as someone who repairs it. why did you hire a wash person? Why cant the tech wash it? Oh so you say you needed him, because with out him its harder. Work harder not smarter. one person cant do everything. and i only want the same thing you want. if i should die for my country i would want them on our terms!!!!! not one persons terms. for nothing less than the greater good for mankind. read the Constitution if we do not live by it we are not telling the truth. then America means nothing. i feel like im dreaming and one day we will wake up.

  17. 17 poton

    Thanks David and Arthur for everything. To all Americans, let us remember what we celebrate on July fourth?

  18. 18 Glenn Poston

    well the fourth is upon us u.s.. and we will still be slaves to the all mighty dollar. I like the fact that in school they (government) teach us some fiction and facts about history. For ten years we learn the same thing every year, slavery,wars etc. Only one year of economics, atleast here in the south where the keep us folks dumb. Nothing about who owns the federal reserve, or how money is created out of nothing or worth nothing, because its not backed by anything. How bilderburg (SP) controls the money behind closed doors so they are the only ones who can profit from it. How they are the only people can own it passed down from generation to generation. Noone can buy stock in it. So let get this straight. Government gets money from central bank with intrest attached to it. The only way to pay the intrest off is to get more money with intrest attached to it. so i ask you is this economics? Germans were hired back in 1700’s to fight the 13 colonies with england, beacuse germans Rosechild banker was paid millions. rosechilds still have control of central bank olong with a lot of powerful people. ww1&ww2 had same cast members in them.presidents who wanted to do away with intrest bearing notes were killed.the amero will be the no dollar for the noth american sodium floride help keeps u.s. passive(which is a toxin same in sarin nerve were not born the way we are. we are raised and influnced the way we are. how rich people want more money and want to be the richest person in the universe. If I had one wish it would be that strange times,technocracy,zeitgeist,the venus project,Eustace Mullins,Ron Paul,carpet bagers and scalawags peoplw would all come together to one location,and show me that we care. July 4th,1776. Woodrow Wilson would be proud to know that we forgave him for the mistake he wished he never did.Come children of the earth be strong and rise against evil(money). no excusses of if we didnt have it what would motivate u.s.. we all come here looking for the answer,no action no progress. stupidity is taught to us. Yeah school is as boring as it was when I went. sit down be quite heal, stay stupid to whats going on around us.

  19. 19 Bill Kerr

    Found this 2003 paper on the socialist calculation debate, might be of interest:
    New Market Socialism: A Case for Rejuvenation or Inspired
    by Dimitris Milonakis (pdf 29pp)

  20. 20 Bill Kerr

    David, This paper by Michael Perelman (pdf download, 17pp) on X-efficiency fits the motivation theme of your initial post:
    Burying X-efficiency

  21. 21 jim sharp

    bill here’s a book review you may find of interest
    Modern Times. Ancient Hours
    Book Reviews

    “Productivity” will always be a holy canon for business. Even today when most wealth takes the form of speculation on speculation, obtaining the maximum labor effort from workers matters more than it ever did. No amount is ever enough. Pietro Basso’s book details the human consequences of the workhouse society: overtime, speed-ups, shift work, night work, on-call work, temp work, “accidents,” ruined health and lives. Basso deftly deploys a mass of empirical data to show that working (and thus living) conditions are deteriorating universally. The importance of Basso’s book is that he not only describes the horrors of modern work but attempts to explain the reasons for them. He does this by relating the increasing length and intensity of work to the nature of capitalism itself.

  22. 22 Arthur

    Thanks for the links Bill. I never got around to responding to the Milonakis link after reading it when first posted. I’ve just read David McMullen’s draft “Re-opening the debates over economic calculation and motivation under socialism” (July 2010) as well as Michael Perelman on the X-factor and will comment on all 3 together.

    The basic conception (as mentioned in footnote 1 of DMcM) is for social ownership of means of production with a market for labor power and final consumption.

    I agree that this is a necessary historical step but would prefer to emphasize its continuity with state capitalism as Lenin did in “The Impending Catastrophe and How to Combat It” (quotes above).

    Labor power as a commodity instead of “from each according to their ability” is a recognition that workers are not yet “socialist angels” but are working for pay. To the extent that the public ownership is actually administered in the interests of workers it is a transition towards communism. To the extent that there is still a separate class managing things and that class has scope to act in its own interests, it is a continuation of state capitalist wage labor with, as history adequately confirms, ample scope for transition back to more “privatized” forms of capitalism.

    If workers, including managers, are still motivated by payment of wages, it is merely confusing to claim that the calculations resting on that are unrelated to a “profit motive”. In fact intense struggle through a historical epoch would be required to eliminate the profit motive, and its actual elimination would correspond to eliminating wage labor.

    Also, while national economies are owned by nation states engaged in exchange through a world market, one cannot possibly exclude means of production from market relations.

    I found Michael Perelman’s draft very interesting, although I am not familiar with the literature discussed. His intellectual biography also looks like it would be worth reading more of his stuff. I suspect a large part of the practical struggle in transition will be unleashing the productive forces by eliminating the various social as well as specific “X” inefficiencies that inevitably result from private interests of owners and managers by mobilizing the enthusiasm of workers as master of their destiny. This won’t result from institutions or methods of calculation but actual concrete class struggle.

    I agree with the central point that DMcM makes that centralization is orthogonal to social ownership with the most important centralization resulting from transition being the collective decision on proportion of output invested as opposed to decentralized decisions by individual capitalists.

    Even institutional arrangements need not all be determined by government through legislation and taxes (except in the same sense that laws define the nature of corporations, cooperatives, non-profits etc under capitalism). As mentioned:

    “Some will be new entrants who are either existing enterprises moving into a new area with synergies or starts ups established by enthusiasts with ideas the incumbents are not open to or capable of developing. This diversity could be greatly assisted by having a number of independent agencies (investment ‘banks’) disbursing funds in any given industry on the basis of their own assessment of what are good investments.9”

    However footnote 9 does not actually solve the problem of how investments of socially owned investment funds are to be allocated by decentralized socially owned financial institutions to decentralized socially owned production institutions. It merely notes that this too can be more efficiently decentralized than by the whims of parasitic owners and the institutions that manage their private wealth:

    “9 Investment funds would be raised from depreciation and net revenue of enterprises, and (if need be) from taxes. They would be distributed to agencies on the basis of past or expected future performance and perhaps even to some extent through random allocation (i.e., lottery).”

    My view is we need a detailed understanding of the actual role of the “finance industry” in economic calculation under capitalism in order to develop a far more effective (and less crisis prone) model of how to do that in transition. The problem is non-trivial and this theoretical work has not been done.

    Exchanging custody of means of production among socially owned enterprises at prices does not differ in form from market exchange of ownership. If economic calculations by enterprises seek to maximize their rate of return on funds invested that differs in content only to the extent that capitalism fails to actually achieve this. My picture is that in negotiating prices and contracts production units would be motivated to increasingly give priority to overall interests and eliminate the parasitic rent seeking behavior that characterizes capitalist inefficiency. This again implies a historical epoch of class struggle. The same applies to allocating investments but seems harder to specify given that “expected future performance” remains the criteria for calculation.

    Exactly the same numerical increases in rate of return on funds invested (“performance”) can be gained by monopolistic price gouging and financial manipulation as can be gained by improved efficiency. Institutions for social auditing (and absence of commercial secrecy) would provide an immediate advantage but still ultimately rely on class struggle between adherents of the socialist and capitalist roads.

    An interesting aspect of popular reaction to bankers and CEOs and the Global Financial Crisis is that much of it seems to be based on a conception that they are already public functionaries who “ought” to be working for society on “fair” (high) salaries instead of stuffing things up for ridiculous incomes. The actual owners seem somehow invisible.

    The short answer to claims that decentralized price mechanisms have to be run by entrepreneurs seeking personal profit is the simple observation that the overwhelming majority of prices are in fact set by employees working for wages in large corporations owned by purely parasitic “investors”. As noted in footnote 6 efficient decentralized prices for both means of production and consumer goods would become even more possible when the workers doing the decentralized price setting have ceased to be employees working for wages. They would be far more likely to be “enterprising” in seeking the common good than employees seeking to maximize their own career benefits while employed to maximize the wealth of parasitic owners.

    The discussion of forces that will make workers, including managers, more inclined to “do the right thing” when not working for capitalist parasites should be balanced by an explanation that the mechanisms available to capitalists for enforcing their interests on recalcitrant employees and managers will be equally available to an economy in transition and used more effectively by it. Recalcitrant managers and workers would be subject to audit, dismissal and legal penalties for fraud. There would be no starry eyed illusions about human nature having already changed, but an intense practical struggle to change it – by force to the extent necessary, just as capitalism tries to hold it back by force to the extent necessary.

    The reply on historical failure of socialism is clear. Should highlight that blaming the backwardness of backward countries on the communist revolutionaries who modernized them instead of on their feudal predecessors and imperialist hostility worked well as propaganda but is quite useless for theoretical analysis.

    The six points on superiority of socialist price mechanism highlight 6 instances where the “socialist calculation” of “performance” according to return on invested capital WILL conflict with social needs. The transition to communism is a period of overcoming these contradictions, not a “socialist system” that claims to have magically overcome them already.

    Conclusion should be strengthened. Actually existing capitalism is a serious obstacle to the implementation of the “utopian capitalist” price mechanism described in apologist literature. Transition will simultaneously enable and supercede it.

    A theme worth emphasizing is that revisionists habitually go for maintaining the old content by pretending that minor differences in form are decisive and can be labelled “socialist”. Revolutionaries are much more likely to cheerfully maintain old forms, eg Lenin’s New Economic Policy acknowledged as capitalist while striving to ACTUALLY change the content through struggle and only later change the labels and forms.

    Mikonakis provides a useful survey of revisionist “market socialism” that exemplifies this preoccupation with form instead of content. (Again I’m not actually that familiar with the recent literature). Although informative, it characteristically completely omits any concept of a period of transition and class struggle. All that remains are efforts to come up with “models” that could somehow implement the pre-Marxian and social-democratic concept of a more equitable distribution based on capitalist relations of production.

    Some of the detailed proposals seem quite bizarre – eg citizens owning share coupons which can be traded to discipline corporate managers but cannot be exchanged for cash.

    Underlying this stuff is the failure to envision how finance operates under capitalism and how it would be transformed.

    This critique by Mikonakis seems insightful:

    “…protagonists of new market socialism engage in a process of randomly and arbitrarily picking up capitalist institutions which can presumably be used to ‘design the next step of socialist experiments’, while dispensing with the institutions they consider counter to this aim. These institutions, however, rather than being seen as the result of deeply rooted historical processes, are treated superficially as simple empirical facts whichcan be replicated at will.”

    My prejudice is that we should focus on unleashing the “X-factor” by liberation of “free enterprise” from parasitic owners by transformation from people who “only work here” into dynamic masters of their own social wealth.

  23. 23 tomb

    think that we need to look at where we are and where want be and then develop a model that gets us there. One of the problems I think is not being clear on exactly where we are at right now.

    Where we are at now I think is confusing especially in a crisis. I personally think we are much closer in developed countries to where we are going than it appears. The inefficiencies are huge and the culture is bogged down.

    Read the link to the X factor but don’t see it as an issue.I think it is in fact the unleashing of the forces that provides the motivation. Agree with arthur we have a goal and some will be working towards it and others will be working against it while some are just waiting to see what happens. Think this dynamic will be the motivation along with our ability to develop a model that inspires people to want the freedom that it will provide.

    I need to do more work on investment options but would not want to see an elite making those decisions. In advanced capitalist countries most people are able to understand the implications in a general sense of major decisions. The details are for technicians. There has to be a conscious move towards communism even in decision making. I know this means lots of bad decisions but see the transition as an economic and political one where people have to learn to take responsibility and make decisions. Economically we are already fine and can afford to make mistakes.

    My concern is the developing countries and very much include China in this. Doubt if they can culturally make the leap in the short term. On the other hand didn’t see the sixties coming and the changes in a decade were well revolutionary.

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