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Home | Join the Socialist Party | News | Subscribe | Donate | Bookshop Planned economiesYour Comments29 April 2004 I recently read a book with a chapter giving the pros and cons of a
planned economy. Some of the criticisms made were as follows: Kevin, Germany Reply from Pete Mason, East London Socialist Party: Kevin has raised a number of very important questions which the Socialist Party has discussed in great detail. The Socialist newspaper plans to have a new feature on this question soon. These are criticisms of the kind of top-down planned economy that the Socialist Party has always opposed. You find the most authorative condemnation of this kind of top-down planning in Trotsky's writings - since he witnessed such top-down planning develop in the ex-Soviet Union – in particular, Revolution Betrayed. The bureaucratic, top-down style of planning in the Soviet Union failed as the economy got more sophisticated, just as made clear in point one of your book's criticisms. Genuine Marxists have always explained that a planned economy needs a thorough-going workers' democracy or it will fail. Unfortunately there are no examples where we can see this in practice today. Even in Cuba, where the people have struggled against a US imposed trade embargo for decades, the regime still is basically top-down – there is no real participation of the working class (the vast majority of the population) in the running of society. Elected representatives The planners must be elected, and at least for the major part, elected from the point of production. The planners, in other words, must be the people doing the producing, whether they are bricklayers or teachers, nurses or architects, as well as including representatives of the wider working class, for instance tenants and residents, for important reasons, as I will demonstrate later. But in addition, in a true democracy, the plan would be checked and counter-checked by the workers affected by the plan, and where it was deficient, the deficiencies pointed out. This would avoid the mistakes often made under capitalism, for instance where privatized Railtrack management had to admit in May 1999 that they had bought trains too wide for the platforms, while making nearly half a billion pounds in profits, and being criticized for not spending enough on track maintenance. In this way a fully worked out plan of production (with the full use of computers, the internet and so on,) would be one which was being constantly updated, developed, honed, further refined, and under continual observation and scrutiny. Big companies such as General Motors effectively plan company ‘economies’ the size of small countries. That’s not to say they make a good job of it – just that it is hypocritical of them to decry large scale planning, when they do it all the time. Under capitalism General Motors management – to continue the example – are kept on their toes by the competition of other car firms, and continually look to make cuts and redundancies. But in a planned economy, workers’ democracy carries out the function of keeping the planners on their toes – it is a much more healthy, positive way of checking and balancing the development of society. Example Let us give an example. Currently government and council bodies, under pressure from environmental campaigns, sometimes half-heartedly try to enforce feeble environmental protection against big companies that pollute the environment we live in. Bosses who don’t live in the area – or even on the same continent! – try to subvert these environmental measures, which create extra costs, to safeguard their profits, and consequently maintain their competitiveness. Under socialism, the concerns of the workers and residents in the area about environmental factors will no longer face opposition from the sacked profit mongers, and their elected representatives (both of the workers and of the residents and in some cases other representative bodies) would be instructed to take into account any threatened pollution. For instance in the United states there is a big problem with arsenic poisoning in the drinking water, which has a high human cost, as reflected in the film Erin Brockovich staring Julia Roberts and Albert Finney, which is based on a true story about a woman who battles against a big firm which is poisoning the town’s water supply. The Socialist Party stands for democratic workers' control and management of the economy, with a plan of production drawn up by elected workers representatives. To take the example above of an environmental hazard, true workers' democracy would mean that if a threat to the environment had been neglected, the plan would be returned to the planners with the necessary corrections marked in red pen - and a "Must do better" perhaps! Workplace representatives get no financial reward for being elected, (travel expenses and so on excepted) and they are subject to recall at any time. In addition, the administrative tasks they do should be shared and rotated amongst the various elected representatives. This is to prevent any particular administrative job becoming, as it were, the "possession" of a particular individual or clique, with the danger that they will jealously guard themselves against criticism – against democratic scrutiny. These are safeguards against "bureaucratic stagnation." The "initiative and enterprise" criticism from the book you refer to, is based on the idea that our war-torn world, with its crumbling schools, hospitals, and public services, its starving millions, and the boom-bust, corrupt, lying, thieving, bosses system which is responsible, somehow rewards "initiative and enterprise", when in fact the "initiative and enterprise" of the vast majority of the population is trampled into the dust with redundancies and cut backs handed down from on high. Only when ordinary working people, with all their innate "initiative and enterprise", have democratic control over their lives in a socialist society, will they be able to collectively realise the massive potential which is currently suppressed by capitalism.
5 May 2004 Reply from Dan Fac But surely under socialism enterprise is not rewarded. Enterprise is all about profit making. If I come up with an enterprising idea (e.g.: a new invention) then I am doing it to make a profit. The people who invented video games consoles, for example, did not invent them to make the world a better place, they invented them to provide people with entertainment, thus making them profit. There are some things which have been designed and developed solely to make a profit, such as videos/DVDs, films, music etc. It seems little point bashing the companies who make and sell these things as "profit hungry fat cats" when profit is all that these things can result in. Surely under socialism the development and production of new inventions would only be approved if they were deemed beneficial to society as a whole. Therefore the production of entertainment related products (e.g.: CDs, DVDs etc) would have to be scaled down to meet the requirements of those products that were vitally need. Or am I mistaken? Dan Fac, London Kurt Bronstein from Lambeth Socialist Party replies I would say mistaken. Dan asked a very legitimate question: will enterprise be rewarded under a planned economy? But firstly, most people don't take that capitalist propaganda about enterprise and initiative. Most people, if asked whether the system rewards their initiative, would laugh like a drain. Human enterprise is not all about money, profits. Big business enterprise, on the other hand, is. So the first question is: Does capitalism reward enterprise? If not, then we're no worse off without it. Like Pete says above, the enterprise of ordinary people is more likely to be rewarded with redundancy, poverty wages, etc. This is an enormous waste of talent, that goes on everyday. If Dan suddenly had an enterprising idea how would he develop it? Now if he was already a millionaire, or from the capitalist class, it would be no problem. But then, you already have money. You have to get a bank loan. Mostly, working class people find a great many prejudices and blocks that stop them from using their enterprise and initiative for their own benefit, let alone for society. If capitalism rewards initiative and enterprise, why is it so crap? Dan gives the example of the entertainment industry, which is a particularly bad example, where for decades people have fought the dead hand of corporate profit takers to free up their creative talent. But under Socialism? The first point is that unless Socialism releases the talents of millions and billions of people, so that Socialist society is raised above capitalist society like a new renaissance, with a massive increase in wealth, the arts, and leisure, then it will fail! People will just say we were better off before! But for the most part, just establishing planning instead of capitalist competition, peace instead of continual war, will bring immense benefits. But initiative will be vital under socialism and immediately rewarded. Under capitalism, workers do not share in the profits, but the boss does, since he is in control. Under socialism, every initiative directly benefits the workers, since the workers are in control, and can decide how to benefit from the initiative. Can you imagine the incentive there!! Every single improvement you can think of to the work you do means fewer hours worked, or more take home pay, or better working conditions - you decide! Then of course, by developing everybody's talents in this way, then this will inevitably spill out into the arts and leisure. Music, art, fashion, etc etc. But in addition, although it is less important, the truth is that many people are not motivated by greed, although that is different to needing to put bread on the table and pay the rent. I come up with enterprising ideas all the time. I don't care for a profit, I'm not particularly hard up, and I'm not bothered about being vastly wealthy. In reality the thing about needing to make a profit is just a self-justification by the bosses for the way their system works. Many - possibly most - other imaginative and inventive people don't care for profit. For instance in computing and on the internet, where many ideas are freely shared. People are proud of the work they do, and also proud that they have rejected the profit system by making their stuff "Open source." And I give the example of musicians later on. Of course, if you are hard up, then you will be looking for an angle on any enterprising idea you have, desperate to get some hard cash. But capitalism, as people have long complained, does nothing for you. Unless you are already rich, you can't get backing for enterprising ideas, with a few exceptions. If you are successful, you will be taken over by some big company. Poverty in our society is caused by capitalism - so much for enterprise. A socialist society would remove the cause of poverty by overthrowing capitalism, and release massive amounts of wealth for the benefit of all. The capitalists created the equation that socialism equals poverty when they were attempting to crush the ex-soviet Union. The trade boycott and 21 invading armies certainly reduced the Soviet union to extreme poverty, and they succeeded in stopping the revolution from spreading (and socialism must be international). This resulted in the crushing of democracy. Then the capitalists said - "Look - that's what you get when you have socialism!" In reality, once industry is rid of capitalism and the profit motive and all the problems this creates, there will be an enormous increase in wealth. Dan implies that capitalism in some way does reward enterprise, because the big companies make profits out of CDs, DVDs etc. but all these things were developed by thousands of employees of massive firms who get no cut of the profits. Say people won't come up with an enterprising idea because they can't make any money out of it. But under socialism, when the wolf is no longer at the door, and you have time to relax, enjoy yourself, and you have all that you could want, you can start to express your talents without the desperate need for hard cash. Bosses are profit hungry because unless they continually increase their profits - whatever the cost to society and their workers - they will be picked on and torn apart by the other capitalists: their share price will crash, and they will be bought up and dismembered in an aggressive take over. In the entertainment industry you have loads of talented people, many of whom hate the domination of the entertainments industry by profit motivated big business, because it massively impedes their expression of their talent. Big business is extremely conservative, and won't invest in initiatives in case they don't make big bucks. Small film makers have a terrible time, as do musicians, etc. But this applies to all industry. The profit motive crushes initiative, which I guess is what Dan means by enterprise. 7 May 2004 Dan replies Ok fair enough. But to say that NO working class person could ever get a good enterprising idea off the ground in the current system is a bit short sighted. But I can see from your arguments that an alternative system would make it easier. I don't know how many ordinary people hit upon a great idea, and how many of them get off the ground. Probably not many. I agree you do have to money in the bank before you can develop an idea. But if it's a good one a lot of people will buy it regardless of the "class" of the person who brought it. As far as the entertainments industry is concerned, you are right that not everybody involved gets a cut of the profits. But at least it's one industry where working class people can get a share, such as singers, and song writers. But then again today's high powered music world is doing more to stifle talent with overblown "reality" TV "pop star" shows. Kurt very clearly says "you can't get backing for enterprising ideas, with a few exceptions." He doesn't say "NO working class person..." He allows for exceptions - Editor 7 May 2004 I'd like to ask Dan a question. Has he ever done anything for anyone else, without payment, just as a favour? Plenty of people tell me that its "only normal" to want to have more and more goods and money at your disposal. If that is true, then why do thousands of people give their time freely doing voluntary work at crisis and drop-in centres, for charities and so on every week? Also, I think those who give me the "greed is only normal" line speak from the perspective of today's capitalist culture. It wasn't always like that: in the Middle Ages, money-grabbing was something despised. It is a very common fallacy to assume that just because we think in a certain way now, humanity has always thought like that. Kevin, Germany 8 May 2004 I believe companies still have "Suggestion boxes", even today where more than ever "Management" and "God" are supposed to be the same thing - according to the bosses (Notice that you can't tell God anything he doesn't know already? Now try it on your boss.) And companies occasionally admit to saving millions through the suggestions they get. So you no longer need wonder how many people hit on a good idea. Instead, ask how many people are prevented from developing their talents, due to capitalism. Steve, Loughborough 10 May 2004 Is the development of products by companies in order to bring in more profit outright "greed"? Dan Fac, London 11 May 2004 Dan, I think the capitalist system amounts to greed. Firstly, as Marx said, the people who create the wealth do not get a fair share in the wealth. Most of the surplus value created in the production process goes to those who own the means of production. Secondly, (again as Marx said) capitalism alienates people from themselves. The whole point of advertising is to shape people's value-system for them, tell them what they want. In short, capitalism makes a profit out of manipulating and infantilising people. Kevin, Germany The Editor writes: A simple question from Dan? - we asked Simon, a Socialist Party member in Quenniborough, for his response: 12 May 2004 Simon from Quenniborough replies I think, from reading the comments pages, that Dan sometimes expresses the unspoken doubts or questions that people may have at the back of their minds, when thinking about joining the Socialist Party. The Socialist Party stands clearly for a complete break with capitalism - for a socialist transformation of society, to one based on a planned economy under democratic workers control and management, as explained in this debate. Therefore, of course, before making this commitment people may wonder if there is some compromise that can be made with capitalism - that will make it work properly, as it were. I think Dan's question could be answered by demonstrating that the profit system is indeed driven by greed - that saying "greedy bosses" is not a bad summary. This is explained in the Capitalism debate on this site. The Capitalism debate gives a simple example of how competition turns the capitalist class into money grabbing "greedy" bosses. Equally, I could begin with an example like the massive big business Monsanto, which was in the news today because, after facing massive campaign of opposition, it has abandoned marketing its genetically modified (GM) wheat product, which only works with Monsanto "Roundup" weedkiller, which most people, including local farmers, saw as a transparent attempt to get a monopoly position and crush locally produced grains, and would ruin poor farmers (amongst various other sins). But I could mention the arms industry, cluster bombs, and a thousand other products which we not only do not need but do us harm. Profit fails to get much money into preventative medicine and other socially important functions. But I notice that on the Capitalism debate on this site, there was a bit that went:
and Dan replied:
So Dan accepts that we should not let capitalism be in charge of these important things. The question is "what about the other stuff? Doesn't capitalism still have a role to play?" But the contribution to this discussion from Pete above dealt with Dan's example of a non-essential industry, the entertainment industry. Pete explained how the dead hand of profit was obstructive to the artist's creative spirit - as many artists have complained, and Dan agreed. So what's left? In reality, nothing. Capitalism is no good for either essential or non-essential production. In a way this is the question about a "mixed economy" verses a planned economy. The question is, can we not combine aspects of the capitalist economy with the public sector? By "mixed economy" people may say they mean a part-nationalised, (or "publicly owned") and a part private, or capitalist economy. However, the truth is that economies that have been called Mixed Economies are economies that are capitalist economies with minor modifications. And the best examples of them - Germany, Sweden - are now deep in crisis, and all the gains are being cut away. The big bosses still control the economy, dictate to governments by for instance controlling the flow of investment, and in the last instance they call the shots. In a crisis they cut back, plundering the public sector, as they are doing now, with waves of privatisation. You can't just take the good and eliminate the bad from capitalism. The capitalist class own big business, and they will not relinquish power without a fight to the finish. I would like to refer Dan to our book, Socialism in the 21st Century, and to our brief introduction to the Communist Manifesto by Marx and Engels. Both these works are relevant in different ways here, and in their own way both show that capitalism and its "profit motive" is incapable of developing society, and both show how Marx anticipated modern developments to a striking degree. Finally, I'd like to point to another news story in today's papers. Corporate profit is mentioned in the leading article from Business section of today's (Tuesday 11 May 2004) Independent. Stephen Lewis, chief economist at Monument Securities, is quoted: "As productivity growth reverts to normal rates, more of the growth in national income is likely to accrue to labour and correspondingly less to capital," he said. "That bodes ill for corporate profits going forward." If more of the "national income" goes to "labour", (that is, to the working class) then less goes to the bosses - to "capital." Lewis says simply that this bodes ill for corporate profits. In other words, corporate profits will be better served if the working class get less, not more. And this is in a period of growth. And who produces the products that make the profit? The working class. Profit is created by our work. we get payment for part of the wealth we create, but not by any means all of it. Profit, as Marx pointed out, is the unpaid labour of the working class. There is a constant battle - not always open, often concealed - between the bosses and the workers over this wealth that we have created, but which we are not paid for. The bosses must always struggle to increase it, and the workers naturally resist. In fact, all the improvements to the living conditions to the working class since capitalism began with child labour and slavery have been won through struggles. There is a certain desperate delinquency in the boss class as a result of the need to compete to survive. They will do anything - lie, cheat, defraud the tax, steal from the worker's pensions, cut back on health and safety whilst workers die from preventable accidents, poison the environment to make savings there - the list is very long. Today's admittedly frivolous example in the Independent newspaper is Conrad Black or "Lord Black of Crossharbour, the proprietor of the Daily Telegraph", who "'plundered company to fund his extravagance (and pay his wife's tips)'" says the headline. Profit is the unpaid labour of the working class: it is stolen by the capitalist class: it is the object of the bosses greed. But at the same time, capitalist production puts the workers at the centre of production: it organises the researchers, the designers, the engineers, toolmakers and fitters, the production line staff, the wages and sales staff and the caretakers, cleaners and van drivers into one group that, working together, get the product out. The working class is the goose that lays the golden egg. They have become the unit of production in modern society, and the bosses are redundant - they just don't know it. As Marx says, capitalism creates its own gravedigger - the working class. 12 May 2004 I would like to reply to Pete. What you say about a planned economy makes a lot of sense, especially the part about workers' democracy. Our capitalist culture is one where need is awakened which in many cases was not there before. We only have to look at the way advertising works to see that. The system you describe however is one which is geared towards covering human need. Do you think therefore that a massive cultural revolution is required before people accept a planned economy? Some writers have even gone as far as to say that as capitalist culture advances, any alternative system to capitalism which involves some understanding of higher values will become so alien to us as to be impossible. What is your opinion of that? Kevin, Germany 13 May 2004 I would like to make two points in reply to Kevin. Firstly, I would start with the reply given before to a previous question by Kevin:
You remember, the reply begins:
But it goes on to demonstrate that capitalism is failing, especially internationally. This does not just affect an unfortunate minority. These crises are experienced throughout the workforce. In addition, most unemployed people are only unemployed for a few weeks or so, so that a steady rate of unemployment at a million for years (taking into account government fiddling of the figures) means many millions going through all the uncertainties of losing your job, and probably ending up with a poorer paying job, despite high mortgage commitments, etc. In Britain, relatively privileged layers in the past - such as teachers - are now experiencing tremendous pressures, and our Socialist Party candidate for General Secretary in the National Union of Teachers election has found it easy to get enough nominations to got through to the second round, and although there is still a long way to go, he gets the best response from ordinary teachers. When people suffer debts, redundancy, and so on, these are things which completely change your outlook on society - things which in the West you would never had thought would happen to you. No amount of advertising or consumerism can counteract having no money or no job. I must add that these writers you refer to above probably reflect their own rather privileged background or wealthy lifestyle, rather than anything that happens outside their windows. Our introduction to the Communist Manifesto on this site finds it necessary to make the same comment about a so-called Marxist writer Professor Hobsbawm, historian and leading theoretician of the now defunct British Communist Party, who also effectively dismisses the working class as a vehicle for change. I'll just add that capitalism - specifically, US imperialism - has got itself into a real scrape by trying to get Iraq's oil, (and trying to get dominance in the region so as to dictate oil prices more directly in the region generally). In the Communist Manifesto Marx predicts that capitalism must keep on conquering markets, German capitalism is in deep trouble as you know, and has gone on a massive offensive against the working class, so as to try to increase it's profits at the expense of the working class.
The role of a new mass party of the working class
Then there is the second point I would like to make: With all this (as Marx explains) ordinary working people will increasingly desire to have a political party which represents their interests. Historically we can be confident they will achieve this. Inside this new party, if it has a genuine base amongst ordinary people, and therefore amongst the most thoughtful and farsighted workers and youth, the ideas of Marxism will find a very eager reception. Our party knows this from vast experience. This party will campaign on all the issues facing ordinary people, and win their respect. At the same time, amongst the activists of the party the Marxists will grow, and will deepen and strengthen their understanding of the method and the art of bringing about a socialist transformation of society. It will be along this path that we will win the great majority of people to the need to overthrow capitalism, based on their own experience. Then with an experienced and trusted leadership, the working class will, as Simon says, become the grave-diggers of the capitalist class. Pete, East London Socialist Party 13 May 2004 Ok, I can see sense in a lot of what you are saying. Here's another question. Supposing capitalism was abandoned tomorrow, and socialism was brought in. What would happen with the bosses and owners of the companies. What would happen with their houses, and where would their children live? Would they have their assets removed or shared out with the company workers? How would their lives change? Would their standard of living be brought down to the rest? I am not asking out of any concern for them, just a question. Dan Fac, London We asked Luton Socialist Party member Michael to contribute:
15 May 2004 Dan mixes up the bosses' personal wealth with their company assets, so we need to be clear about that. Bosses tend to separate their personal wealth from the profits and assets of the companies they own and control. As an example bosses of medium and large companies usually ensure that their companies are "limited" (Fred Bloggs and co. Limited" or "F. Bloggs Ltd") This means that if the company goes bankrupt, the personal wealth the boss has extracted from that company over the years (for instance in the form of salary and bonuses), is not affected. It's only when the criminal proceeding follow (as they all too often do in recent times) that the bosses' personal wealth might be at risk - and even a short stay at her Majesty's - although they usually get off with a sympathetic judge and a light fine. In other words, incidentally, the "risk" they take is with other peoples livelihoods, not their own, (notwithstanding the number and severity of laws they break.) Sometimes commentators say that you couldn't bring such-and-such a company into public ownership because "it would cost too much" - refering to the compensation to be paid to the former owner. In the past when firms have been "nationalised" or brought into public ownership, the nationalised industry has been crippled by paying massive compensation to the former owners. Examples include coal mining. the Socialist Party is favour of bringing the big corporations - about 150 in Britain account for the vast majority of economic activity - under democratic public ownership, as part of a plan of production, as explained in this section. The Socialist Party says no compensation should be paid to the bosses when their company is placed under democratic public ownership, for instance in the event of the establishment of a new socialist society. That is part of the Socialist Party's programme. The bosses would lose the company assets entirely, without compensation. The assets would become the collective property of the workers, who would elect a workers' management committee to decide how to run the company. They might use the assets to invest in new labour saving machinery, for instance, (to give a somewhat simplified example) enabling all the workers to work fewer hours and still produce the same amount of goods. On the other hand the Socialist Party has no programme of removing the personal wealth of individual bosses. The Socialist Party is not interested in the bosses' personal wealth, but in the production capacity of the company. It is not a personal vendetta against the bosses, but a question of ending the destructive capitalist system, and changing to a more efficient use of our resources and abilities. However, it's possible the workers may have a bone or two to pick. For instance, after the elected works committee has had a careful look at the accounts, records and secret boardroom minutes, etc, (assuming the previous owners have not been able to destroy them,) the neglect of health and safety, conspiracies to defraud the workers of their pensions, tax evasion and a host of other sins might become evident...after all, there's plenty of criminal proceedings take place even under the entirely pro-capitalist legal system we have at present (Enron, etc.) Of course, if they wanted to earn a living, the bosses would have to work like the rest of us, instead of spending all that time at the golf club. And they would get paid the rate for the job. Since you ask, their children - at their boarding schools - might not be affected at all, or maybe they would start to go to normal schools like the rest of us, except that we aim to get all schools up to the standard of the very best, with much smaller class sizes, etc. In past revolutions, such as the Russian revolution in 1917, or the Spanish Revolution of 1937, the bosses simply made themselves scarce. Perhaps they were worried about something... They presumably dressed less ostentatiously, lived more simply, or even got a job. As for the workers, they were too interested in building the new society to concern themselves over the ex-bosses. In fact, the workers in a post-revolutionary situation can be too lenient in relation to the crimes, and possible future conspiracies, of the old deposed ruling class, their army generals and hangers-on. Michael Rutherford, Luton Click here to send your Comments Also see: What is socialism? from The Socialist 22 November 2003 The Committee for a Workers International has published a book called Planning Green Growth Home | Join the Socialist Party | News | Subscribe | Donate | Bookshop |