Against the Current, No. 12-13, January-April 1988
Occupation in Permanent Crisis
— The Editors
The Washington Legacy: Council Wars in the Windy City
— Alan Jacobson
"New Period? A Letter to the Editors
— Steve Downs
Victor Serge's World and Ours
— Susan Weissman
- Clear the Names of the Moscow Trial Victims
Random Shots: Potato Head Blues
— R.F. Kampfer
- After the Crash
Notes on the Crash and Crisis
— Robert Brenner
Why a Crisis of Profitability?
— Mary Malloy
Another View of the Economy
— Steve Rose
- Market Socialism
Market Socialism: An Overview
— David Finkel with Samuel Farber
The Limits of Socialist Planning
— Leslie Evans
Legacies of Soviet Planning
— Mel Leiman
A Matter of Priorities
— Milton Fisk
- Memorial Essays
Raya Dunayevskaya: Thinker, Fighter, Revolutionary
— Richard Greeman
Van Heijenoort Remembered
— Alexander Buchman
A Haymarket Memorial
— Michael Löwy
Body of Opinion
— Linda A. Rabben
Radicalism in the Forties
— S.A. Longstaff
- In Memoriam
Raymond Williams, 1921-1988
— The Editors
Nora Astorga: ¡Presente!
— The Editors
I FIND I AM more tentative about market socialism than most other issues I have investigated. On the one hand, there is the feeling that one doesn’t want socialism to degenerate into money grubbing of the sort associated with market economies. Those of us who read William Hinton’s Fanshen in the late ’60s find nothing encouraging in today’s pictures of Chinese hawking jeans at Beijing’s free market and buying stocks at their new exchange.
On the other hand, there is the nagging feeling that one will miss having an emporium like Service Merchandise in a planned economy. When I recently walked out of the Service outlet in Bloomington clutching a telephone answering machine, I could only think, “Why am I fighting to deprive myself of this?”
To the extent that there is this ambiguity, we shall not be happy with either unqualified rejections of directive planning or unqualified rejections of market-led economies. The conclusion I grope my way to in this article is that there is a form of decentralized planning that, without the aid of the market, can best satisfy both our sense of socialist values and our need for consumer choice and efficiency. I recognize, though, that there are mixtures of planning and the market that run a respectable second. So the tentativeness remains.
The two directions in which we are pulled can be described as two sets of priorities. On of them I shall call socialist priorities: the ones socialists, of at least a certain sort, aim at. They aim at ending alienation, exploitation and political domination. They recognize that the market as it works in capitalism tends to lead to alienation, exploitation and political domination. Thus they are skeptical about the market unless they are shown that it actually attenuates these evils as they have appeared in state-run economies.
The second direction, the one in which I was headed while clutching my answering machine, can be described in terms of what I shall call liberal priorities. These are the ones liberals, of at least a certain sort, aim at. They aim at expanding consumer choice, at efficient resource allocation by enterprises and at parliamentary democracy. They are then skeptical about socialist planning unless they are shown that aspects of it actually undercut the evils of unemployment, overproduction and economic inequality.
I want to avoid having to choose between these priorities. Most criticisms of state-run economies have either ignored or left implicit the socialist priorities, relying instead on the liberal ones. This is a fatal mistake if we are not to lose sight of what socialist planning was for in the first place.
It is no less a mistake to ignore the liberal priorities, which target economic well-being. Marx himself criticized impoverished communism in his 1844 manuscript, “Private Property versus Communism.” Economic wellbeing, the unifying theme of the liberal priorities, is the background for the realization of the socialist priorities. Only a few writers in recent years have made explicit the importance of both sets of priorities. One of them is David Schweickart in his Capitalism or Workers’ Control? (New York: Praeger, 1980). Yet having to consider both makes the task more difficult and the results more tentative.
In listing three socialist priorities I am only trying to keep the list manageable. There are other priorities, including that of overcoming non-class oppression, but I am concentrating here on the economic priorities.
Marxists see the economic socialist priorities of ending alienation and exploitation as unsatisfied in both capitalist and existing state-run societies. Some socialists would, instead, think that overcoming inequality is the main priority for a socialist society. I would rather say that producers will determine how much or how little equality there will be through their control of the society.
Here I am defining ideas of exploitation and alienation through examining the power of society’s producers. Exploitation is the relative lack of control by producers over the extent of the surplus labor time they work. They are exploited when they have little say over whether they will work beyond the time needed to reproduce themselves and over how much of this additional time they will work. Surplus labor time itself is not exploitative; rather exploitation arises from lack of control over that time.
Alienation is the relative lack of control by producers over the surplus product. They are alienated when they have little say over how what is produced during surplus labor time is to be used. Again, the existence of a surplus product itself is not alienating; instead alienation comes when the worker has no control over its use. When the surplus product is not the producer’s property, he or she is alienated.
From an abstract point of view, lack of control over the two need not go together. Producers who control how long they work might still not determine how their product is utilized, and conversely. But any economic system that, independently of producers, sets growth as a goal will leave producers without either form of control. If, though, producers set their own goal for growth of the economy, they will control both their surplus labor time and their surplus product.
I turn now to a criticism of the market in light of these priorities. It is a structuralist criticism. Imagine the market in isolation from any relations of production, somewhat in the way Marx begins Capital by discussing commodities apart from relations of production.
In this abstract market, competition reigns and in an impersonal way imposes controls on producers. The units of competition are to be enterprises. They will try to increase production without increasing costs in order to sell their products cheaply enough to retain or to expand their part of the market.
Producer control of the amount of surplus labor time is incompatible with the market’s imposing an increase of surplus labor time. So to the extent that the market imposes an increase of surplus labor time on producers, it exploits them. The market is merely an institution, but here it acts like a boss, a landowner or a creditor-all of whom possess the producer’s surplus — labor time.
A similar argument suggests that the market created alienation as well. Competition enforces investment in the more profitable areas of production. The producer then loses control over the surplus product merely as a result of the market, whatever the relations of production might be.
The mechanism of control is an impersonal one, not the agency of an entrepreneur, an enterprise council or a planning board. When this abstraction is fleshed out with concrete relations of production it presumably becomes clear which agents carry this structure that alienated producers.
Some years ago Wlodzimierz Brus criticized Hillel Ticktin for rejecting the market on the basis of deductions made from “the market in general.”(1) Brus cautioned against transferring features of the market from one set of relations of production to another. We can conclude that if the capitalist entrepreneur supports the market structure, then the market leads to alienation and exploitation. But the question is whether any relations of production with a market will be associated with alienation and exploitation.
It might be hard to think of cases where the market is not associated with control over producers by some economic agency. But how does the market get its imperativeness? Is it really by definition that the market enforces surplus labor time and investments? Could there be a non-imperative market, or is Ticktin’s essentialism correct?
Imagine a producer-run economy in which the element of competition is effectively eliminated. This changes the assumption of competition embedded in the structuralist critique. Nonetheless, a market still exists; producers respond to changes in demand and consumers respond to changes in supply in ways with which we are familiar. The difference is that the producers have decided not to produce a surplus, so the economy is basically one of simple reproduction rather than extended reproduction. Shifts from the production of one product to another in greater demand must be made by robbing depreciation funds.
In this model, increasing exploitation as a mechanism of competition is eliminated. Ingenuity in the use of surplus product to undercut a competitor has also been eliminated. The absence of growth alters the obvious features of competition. The market brings about changes within the limits of the economy’s ability to barely reproduce its productive capacity. Certainly a rather dull market, but one in which the structuralist criticism fails, since there is no alienation or exploitation.
So we need to proceed cautiously in building a case around “the market in general.” Certain relations of pro duction can be combined with a market of sorts without introducing alienation and exploitation. It may be that in those interesting cases, the relations of production rele vant to the market socialism debate in combination with the market do in fact lead to a certain degree of alienation and exploitation. But we need to look for proofs rather than to rely on deductions from a supposed market “essence.”
Criticisms of Planning
Discussions of what Rudolph Bahro in The Alternative called real existierender Socialismus have led to a focus on differences between the “actually existing socialism” of the East and the capitalism of the West. Consumer choice, rational allocation of surplus and parliamentary democracy have become widely used as standards for judging the planned economies of actually existing socialism, as well as for making assessments of planning in general.
In his critique of planning in The Economics of Feasible Socialism, Alec Nove claims that these standards are violated not just by actually existing socialism but also by planning in general. He operates with the following beliefs: (1) Doing away with the market makes centralized planning a functional necessity; and, (2) Centralized planning makes bureaucracy a functional necessity.
Nove wants to assure us that these beliefs are not based on arguing fallaciously from what happened in actually existing socialism to what must happen anywhere without the market. Rather, what happened there is understandable in light of these perfectly general functional necessities. We cannot then blame the centralization of Soviet planning on economic backwardness, and we cannot blame the bureaucratization of Soviet planning on the elimination of party factions. These are institutional imperatives, invariant under changes of circumstances.(2)
One can’t help noting here that Nove’s position is a more rigid determinism than even Marxists are comfortable with. He justifies this not on grounds of historical materialism but on grounds of organization theory, which he traces to Bogdanov.(3) It is not difficult to cast doubt on at least the first of these so-called functional truths.
Where there is no centralized planning must there indeed be an element of the market? Assume the context is a complex industrial economy without abundance. It might seem that in the absence of signals about demand and costs coming from the market, only a central body could make all the decisions needed to allocate resources in a way that does not create intolerable imbalances. Perhaps, though, resources could as well be allocated through several steps, only one of which would involve a central planning body. The other steps used to complete the planning process would involve sectoral planning bodies.
We have become accustomed to thinking that “decentralization” means injecting the market, but it may also mean completing the job of planning at lower levels. The first form of decentralization is sometimes called “economic” while the second is called “administrative.”
In Ernest Mandel’s model of “articulated workers’ selfmanagement,” a general congress sets the broad goals for production. From these goals technicians prepare a general plan based on knowledge of available resources. The more detailed choices are in the hands of the producers’ councils in the various sectors of the economy.
Yet these sectoral councils would not act independently of consumers. Where a sector produces consumer goods or services, its producers’ council would decide its product mix only in conjunction with consumer bodies that would have tested consumer responses to a variety of possible goods and services. And a producers’ council in a producer goods sector would decide its product mix only with producers who are potential users of its products. The articulated system has then both vertical and horizontal connections.(4)
In viewing the problem of scarcity through the Jens of liberal priorities, we see that there are some individuals whose needs go unrecognized. Since planning is limited by scarcity, someone else decides my share of the scarce resources. This, then, violates the liberal priority of consumer choice. According to this critique, the problem can be avoided through having the market determine the allocation of these limited resources. My vote for my preference with the dollar from my wallet gives me, according to the liberal argument, some influence over how my needs will be satisfied.
There are two telling responses to this general criticism. The first is that using the Mandel model of decentralized planning the consumer has-through influencing both general congresses and sectoral councils — every bit as much influence over production as does the purchaser of goods in a market system. Planning need not be centralized. The second point is that, despite scarcity, the number of goods meeting fundamental needs that can be produced in quantities sufficient to satisfy demand continues to grow. So it is possible to satisfy consumer demand by planning in a wide range of areas.
This last point has been developed in some detail by radical economist Howard Sherman. In his view fundamental goods can be distributed free without having to face the problem of unceasing demand for them. The key is that there is inelastic (more or less fixed) demand for them. Limited resources will then suffice to satisfy fundamental needs.
Producers’ wages can be reduced as more and more goods are distributed free. Such distributions reduce acquisitiveness, and leisure time becomes a prime want. These changes have an impact on the demand for luxury goods and services, making it possible that the demand for luxuries will be reduced to a level that can also be met. There could then be a transition to a non-market economy that provides full consumer choice.(5)
What does all this show? It shows that one should not try to give a general criticism of planning that appeals to the failures of centralized planning. There are decentralized forms of planning to which the criticisms based on the failures of centralized planning need not apply.
We have so far discussed only the criticism based on the consumer-choice priority, but an analogous argument can be constructed in the case of efficiency and democracy. After all, central planning is simply not the essence of planning, and what follows from central planning need not follow from other kinds.
In looking at the debate over combining both market and plan from the vantage point of socialized property,(6) we must distinguish between two kinds of socialized property: state property and producer property. There is state property when the ruling group of the state has control over the major aspects of production-labor, the means of production and surplus investment. In contrast, producer property will here mean the form of socialized property that would exist in the system of articulated producers’ self-management. The control over the major aspects of production is different in each case.
The problem of combining the market with state property has emerged in the case of market reforms in China. Inserting the market into state property forms involves reducing or eliminating certain controls. Control is transferred to enterprise managers and even to private bond or stock holders. Conflicts are inevitable as the efforts of managers to follow market regulators are made more difficult by the efforts of state leaders to control managers. The natms of this conflict has been studied by Richard A Smith in trgard to China(7) and by Paul Marer in regard to Hungary.(8)
The problem cannot be framed as the state’s reluctance to relinquish any controls. It arises because the state’s relinquishing controls still does not give managers full freedom on those matters since the state still retains controls on different, but connected, matters. For example, the state’s support of full employment conflicts with the profitability requirement for running enterprises. How can unprofitable enterprises be closed down if the state continues to support a policy of full employment? The accelerating pace of reforms in China in the mid-1980s has been a response to such conflicts. As a result, some enterprises are no longer state property but are owned jointly by the state and private individuals.
We cannot infer from these conflicts and from such tentative moves_ toward privatization that a combination of state property and the market is impossible. It has its problems — its contradictions — but so does capitalism. Western economists would say that nowhere has the state under really existing socialism relinquished enough control. But the logic of their position is that the state should relinquish so much control that there is no longer sociaized property. Then of course there is no longer an issue about market socialism.
Let’s turn now to the other form of socialized property, producer property, in which control over surplus labor time and over surplus investment is in the hands of producers. How does the market combine with it? Modifying this producer property with the market will also create conflicts, again without making the mixture impossible. When the market is inserted, producers will lose some degree of control over vital facets of production. (I assume the economy relevant here is one of growth and not of simple reproduction as in the earlier imagining exercise.)
In what way is there loss of control and hence a dilution of producer property? A council of workers in a given sector will find its authority to make decisions about the division of tasks in that sector decreased once a single enterprise council in that sector begins to use market signals to make its own decisions. It is not necessary to say that decisions from the two sources would be contradictory; it suffices to say that the socialist goals of a producers’ council will lead it to try to restrict the autonomy of individual enterprises. This is because there is a sense in which alienation and exploitation have crept back.
The unmixed articulated producers’ self-management — in contrast to the situation of state property controlled by the ruling group in the staten– avoids alienation and exploitation, since producers control their surplus labor time and they also control the social surplus directed to them by the central plan through their own general congress.
In the mixed set-up, some of that control is lost. The exigencies of competition rather than mutual agreement among producers now determine surplus labor time. Profitability rather than mutual agreement now determines how the surplus product will be invested. Still, producers in their congresses and in their sectoral councils meet to determine as much as they can about production so that the process of production will be neither alienating nor exploitative. This underlying thrust to avoid infringements on the socialist priorities will lead to measures that partly undermine the effectiveness of market signals in realizing the liberal priorities.
Nevertheless, the mix of market relations with producer property may bring some gain in realizing the liberal priorities, and this gain needs to be weighed against the possible loss in realizing the socialist priorities.
Efficiency Under Planning
Socialist priorities do not constitute a comprehensive ideal. In an ideal society there should be a background of economic well-being. But if the market is the means to economic well-being, then there will have to be a tradeoff between plan and market.
The element of plan will provide a degree of freedom from alienation and exploitation, whereas the element of market will provide a degree of material satisfaction. In making the trade-off, we would then treat socialist and liberal priorities as inversely related. Economic wellbeing is diminished as the absence of alienation and exploitation is promoted. This would parallel the inverse relation John Rawls saw in A Theory of Justice between equality and optimal production. He assumes that equality will tend to reduce work incentives.
How far down on the scale of equality should we go for the sake of more production? Rawls’ answer was that we should not go below the point at which the advantages to the least well-off are maximized. Of course, we should not go above that point either.
Is there a similar problem here about how much alienation and exploitation should be allowed for the sake of economic well-being? If there is, then we might wonder whether it admits of a solution paralleling Rawls’ answer. But just as Rawls might have been wrong about incentives being a problem under genuine equality, so too economic well-being might be no problem if socialist priorities are fully realized.(9)
The problem is supposed to be that as the market is weakened and the absence of exploitation and alienation is promoted, the performance of an enterprise becomes more difficult to measure. How can we possibly know that it is minimizing costs when there are no market prices? If it is not minimizing costs, then labor and materials are being used unnecessarily and are not available to meet needs in another area.
In a market economy, the argument goes, the products of such an inefficient enterprise will have to be priced higher than those of an efficient competitor, if the former is to hope to realize the average rate of return. But since higher prices will not be competitive, it will be disciplined by competition to cut its production costs. In a nonmarket economy this disciplining mechanism is not in place, with the result that the enterprise uses society’s resources unnecessarily and thereby reduces the level of economic well-being.
How can such economic inefficiency be avoided with socialized property? When it is state property we are talking about, there is no overriding interest in avoiding inefficiency. The state has its own priorities in production that reflect its own goals. One of the obvious goals of the state is to protect its own power, both domestically and internationally. The security-mindedness of the contemporary state leads it to look at the national productive base as a means of building, or providing the surplus for buying, a military apparatus. It will also be mindful of the well-being of its citizens since this too is a passive basis for its power. However, these goals compete with one another with the result that efficient production for citizens’ well-being is not an overriding interest of the state.(10)
It is this fact, much more than the alleged impossibility of planning efficiently, that is behind the inefficiency of state-run economies. The state does not make efficiency for the sake of consumer well-being as high a priority as its own power.
This picture is drastically changed for producer property. With producer property it is not the state’s interest in its own power but the interests of producers themselves — and this means most citizens — that underlie planning. If there is inefficiency, it is producers themselves who suffer. When they are irt control they will strive to avoid inefficiency.
Under state property, the ruling group could compromise efficiency for reasons of state power without having to suffer the direct consequences. Its privileges and economic well-being are assured. Thus class power is relevant to understanding the system’s capacity for economic efficiency.
More important than argumentation about how the performance of the firm is measured by market prices is the critical distinction between the two forms of socialized property.
Talking about the firm and its performance within organization theory leads us to neglect the question of property and hence of class. This then leads to ignoring the fact that those most likely to be the victims of inefficiency will, when they control the planning process, make the elimination of inefficiency an overriding priority.
How, though, can they locate and root out inefficiency without market prices? An interest in weJJ-being will promote an experimental approach to production. This is the driving need to determine what works best with the least expenditure of labor and materials. It won’t then take market prices to know whether solid brick walls in housing construction are less efficient than wooden studs. Producers will have an interest in finding whether more labor is involved with brick construction. They will be capable of evaluating not only the efficiency of their labor time, which they will not want to squander, but also the aJlocation of scarce resources.
Of course we need to be concerned with the transition from private to socialized property. In such cases the state inevitably plays a large role in aJJ areas of life, especiaJJy the economy. A counterbalance to the state is needed if the direction of the transition is to be toward producer property rather than toward state property.
The presence of a market during such a transition may help avoid economic disaster. For instance, the dominance of small production units would make socialization of production unrealistic without further social changes. But the real counterbalance to the state-one that would effect a transition to producer control-is not necessarily the market. Here relatively autonomous organizations in many areas of social activity play a far more vital role.
Regulated and Competitive Markets
Perhaps, one might object, pricing aJlows for a more refined mechanism of cost minimization than any mechanism invented by a general congress working with sectoral councils. But any gains from having market prices will have to be balanced against the losses to economic wel1-being from the markets that generate prices. These losses are notorious under a system of private property, but they also accompany markets under socialized property.
Here again, to deal with the question of such losses we need to distinguish two types of market. The first type is ca11ed a “regulated” market and the second is caJJed a “competitive” market.(11)
The regulated market replaces plan directives for enterprises with state-regulated prices, wages, interest rates, bank credits, exchange rates, taxes, subsidies and tariffs. These parameters are not set through competition between firms, between producers or between nations. If the context is the reform of a centraJJy planned economy, there is likely to be little competition. Without a preexisting market to set these parameters, they will be set by the state. The regulated market, as a reform of a centrally planned economy, has a certain potential for improving economic well-being.
Still, regulated prices are only a rough instrument for improving the efficiency of firms. The difficulty is one we encountered earlier. A state that sets prices and the other parameters but still exercises its ownership rights by controlling enterprise managers will compromise the autonomy needed by enterprise managers. Because this limitation breaks the fuJJ measure of efficiency within the regulated market, it is far from clear that inefficiency under state property would be any less than the inefficiency under producer property that has no market.
Consider now the case of the competitive market, where enterprise managers respond to marketdetermined rather than state-determined prices and the other parameters.
With a competitive market, state ownership is diluted even more than it is with the regulated market. Without a competitive market the state could be depended on to exercise its ownership rights by interfering in enterprise management. Competitive responses to market signals would be obstructed, thus undermining the competitive market.
Unlike capitalism, this state has no inherent interest in having enterprises run on the basis of profitability. Clearly the state must consider factors other than enterprise performance when it comes to set the welfare budget, the military budget and the national product mix.
Investment financing is one important way of diluting state ownership in order to make room for a competitive market. A private capital market would tend to move capital from less to more efficient enterprises and sectors more readily than state financial sources would. A competitive market will tend to promote the privatization of more and more capital.(12) Contradictions would be pushed to the point of impossibility.
What is the effect of the competitive market on producer property? Competitive markets have a history of causing a deterioration of economic well-being, in respect to what is possible, that market socialists would certainly want to avoid. Modifications of the competitive market are needed to avoid such a deterioration. Some of these negative effects of the competitive market are worth listing.
Competitive markets have led to over-investment; everyone rushes in for the kill but the market :s not wide enough to absorb the resulting supply. As competitive markets led to the destruction of older capital, large pools of underutilized labor are left in numerous locations. Competition within the labor market has increased wage differentials with the result that incentives are reduced among those who don’t get on the “fast track” and productivity lags. Competitive markets have increased pressure for cutting labor costs, thereby necessitating wasteful management overhead in order to preserve industrial peace. Competition has left large segments of the world impoverished, thus decreasing world-wide economic weJJ-being and creating a basis for political instability and war.
Those who tel1 us about the need for the market to measure enterprise performance don’t get around to telling us about these major areas in which the market is wasteful. Only starry-eyed acolytes of free enterprise would claim that these inefficiencies stem from a conspiracy of the state to overturn the competitive market.
Avoiding this kind of waste calls for restrictions on the competitive market that push it in the direction of a regulated market.(13) Private capital markets are done away with to avoid the greed that leads to over-investment. The mobility of capital is restricted to avoid un- and underemployment. Greater wage equality helps avoid demoralization among the majority but dampens the spirit of enterprise of those looking for the “fast track.” Cutting labor costs is avoided with a consequent reduction in management overhead. Terms of trade with lessdeveloped nations are not allowed to keep them in debtor peonage.
What conclusions are to be drawn about combining producer property with the competitive market? The losses resulting from such a combination would be intolerable. Not even the liberal priorities could be realized. Producer property would be diluted with privatization. Alienation and exploitation would intensify.
The alternative is to combine producer property with a regulated market. The general congress would no longer set production directives except in some basic industries such as the utilities. It would set prices and the other economic parameters on which sectoral and enterprise councils would base their plans. The issue here is not whether alienation and exploitation would emerge with the regulated market; we have already noted that they would to some extent. The issue is about the effect of a regulated market on economic well-being.
On the one hand, under producer property without the market, efficiency is promoted by the interests of producers in satisfying their needs including the need to shorten the work day. On the other hand, under producer property modified by a regulated market-called on to avoid the waste of a competitive market-efficiency is promoted by regulated prices, interest rates, wages and so on.
In the framework of producer interests, there is no exact measure of enterprise efficiency; waste is limited but the gain cannot be quantified. Yet the advantage of limiting waste this way is that there are ongoing negotiations among producers and consumers within which there are no class barriers to the free flow of information.
In the framework of regulated prices, there is a measure of enterprise efficiency. The disadvantage is that parameters used in quantifying are set by the state rather than the market and are thus somewhat artificial. There is no true measure of efficiency.
What does the score-card look like? Producer property without the market can provide a minimum of alienation and exploitation. It thus scores tops on the socialist priority scales. Producer property without the market can provide a high level of consumer choice and an important check on enterprise performance in the efficient use of resources.
But precisely how well does it do on the scale of efficiency? Let us say that since producers have an interest in avoiding waste when they run the economy, they will find ways to reach high, but not maximum, levels of efficiency. Given the drawbacks of planning without calculations efficiency is not optimal. So producer property without the market scores high but not at the top of the liberal priority scales.
Producer property modified with a regulated market can avoid a high level of alienation and exploitation and thus it scores high on the socialist priority scales. But it fails to reach the top of these scales since there is a degree of loss of control due to regulation by set parameters. In addition, when we turn to the liberal priorities, we find that, since the regulated market is not a true market, it cannot reach the top of the scales for consumer choice and enterprise efficiency.
Does this modified producer property do as well as producer property without the market? Here I have no definitive conclusion to draw. The regulated market of modified producer property would probably equal the high scores on liberal priorities that the unmodified producer property model does. But there seems to be no clear preference for the market.
Though my focus is economic, it is worth noting that the market does not gain the advantage on the scale of democracy. Producer property without the market avoids the problems for democracy created by state property; modifying producer property with the regulated market creates no clear advantage beyond this in regard to democracy.
So the place where the choice between models can be made is centered in the area of socialist priorities. Producer property both with and without the market seem about equal in regard to the liberal priorities. Yet producer property without the market gets top ranking on the socialist priority scales, whereas the regulated market brings — in exchange for possible gains in workplace efficiency — a degree of both alienation and exploitation.
- Hillel Ticktin and Wlodzimierz Brus, “Is Market Socialism Possible or Necessary?” Critique, 14 (1981): 13-39.
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- Alex Nove, The Economics of Feasible Socialism (London: Allen and Unwin, 1983) 34ff.
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- Aleksandr Bogdanov, Essays in Tektology (Seaside, CA: Intersystems, 1980), orginally published, 1921, translated by G. Gorelik. Bogdanov saw classes, for example, as based on the hierarchical organization of production, rather than on differential ownership. Bogdanov’s organizational science, elaborated in numerous volumes, anticipated many of the central points of systems theory.
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- Ernest Mandel, “In Defence of Socialist Planning,” New Left Review, 159, 1986, 26ff.
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- Howard Sherman, Radical Political Economy (New York: Basic Books, 1972) chap. 23.
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- Cliff DuRand, “The Reconstruction of Private Property in the People’s Republic of China: John Locke Revisited,” Social Theory and Practice 12, 1986: 337-350.
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- Richard A. Smith, “Class Structure and Economic Rationality: Problems of Industrial Reform in China,” 1987, manuscript.
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- Paul Marer, “Economic System,” in Ungarn: SudosteuropaHandbuch, Vol. 5, ed. K.-D. Grothusen, (Gottingen: Vandenhoeck & Ruprecht, 1987) 289, 291.
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- John Rawls, A Theory of Justice, (Cambridge, MA: Harvard Univer sity Press 1971) Sections 11-13.
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- Seymour Melman, Profits Without Production, (New York: Alfred A. Knopf, 1983) Sections 10-12.
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- Marer 283.
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- Karl Marx, Grundrisse, trans. M. Nicolaus, (Harmondsworth: Penguin 1973) 649-652, 657-658.
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- Samuel Bowles, David M. Gordon, and Thomas E. Weisskopf, Beyond the Wasteland, (Garden City: Doubleday 1983) 262-273.
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January-April 1988, ATC 12-13