SocialismToday           Socialist Party magazine

The social economy alternative

MY THANKS to Per Olsson for his review of my book, Anti capitalism – the social economy alternative, in Socialism Today No.67. None of my views have been misrepresented – they have just been ignored!

There is of course much common ground between us – not least that all major industry and finance must come under common ownership and the rule of capital ended. But the profound differences between us as to how socialism should operate are not really examined.

Anti Capitalism argues, in some detail, why central planning leads to hierarchies, unproductive behaviour and bureaucratic arrogance even in circumstances of democratic workers management. Why? Because central planning is just that, central. It’s distant and there is little chance of real local management however much checking and criticism there is.

I go on to argue that the system of ‘allocation’ that Per favours, where we are given free goods and services rather than pay for them, is unworkable as long as we still have a money economy. All it means is that the ‘free’ goods and services are paid for out of higher taxes and the choice of what you spend your money on is reduced.

Equally the book develops arguments that a planned core of the economy, alongside a socialised market, will rid us of the gross inequalities and crisis ridden nature of capitalism, while maximising local control and creativity. The socialised market is different to the free market. It is driven by need and not profit maximisation.

In answer to all this, Per merely reminds us that the essence of socialism is ‘based upon a conscious and democratic planning of production made possible by the means of production’ and that ‘quality demands a democracy of producers and consumers, freedom of criticism and initiative’. Which means what in terms of industrial organisation? It doesn’t begin to take up the arguments.

Depressingly, Per ends with the last refuge of the central planner. ‘But the point is, if multi-national companies can draw up a plan in their own interests, why should a society based on a socialist democracy not be able to work out a plan that serves the needs of working people?’ The point is, multinationals ‘succeed’ by placing elements of undemocratic ultra-centralisation alongside tough international competition that will punish any failure. The comparison with a democratically planned economy isn’t useful.

To summarise the conclusions of my book in seven lines! For the infrastructure of the economy (water, transport, communication systems, finance etc), the advantages of central planning outweigh the disadvantages. For the rest, larger industry and services should be run by a combination of workers, users and ‘the state’ in whatever form seems appropriate. No group would be in a majority, so the planners would have to argue their case. In other words planning would be ‘indicative’. It would show what was needed, not what each enterprise had to produce and whom they had to deliver it to. Using the market mechanism, decision-making power would continually be pushed down to the base.

Social ownership, combined with an internet-based end to commercial secrecy, would open up an era of co-operation, greater equality and increased productivity. A world based on human solidarity rather than money, is better achieved by this route than the imposition of general central planning.

A thought I want to leave with readers is this. ‘Market vs Plan’ arguments can seem academic affairs. However, when our ideas come to be put under the media spotlight, clinging to a mistaken belief in the virtues of central planning will put tremendous barriers between the party and its potential supporters. There is an almost universal understanding that management control, including the power to make trading decisions, should be as devolved as far as possible.

The discussion must continue.

Chris Hill


Democratic planning

BOOKS SUCH as that reviewed by Per Olsson in the last number of Socialism Today in reality concede to the arguments of those who say that the market economy is now the only alternative. I do however think that there were some inexact formulations used in Per’s review that serve to create some confusion over what we understand by a planned economy, in particular the use of the phrase ‘central planning’.

In the early 1920s there was a discussion in the Soviet Union in which Trotsky argued that a state plan should be established. The role of this body would be to coordinate the state and socially owned sectors of the economy to ensure a regular and balanced industrial growth.

Under the Stalinists however the state plan became a huge monolithic structure. Rather than coordinate between sectors, the centralized bureaucracy introduced huge disbalances by ignoring the need for consumer goods and by allocating huge resources to military production. Factory directors were instructed in minute detail what they should produce. It was this bureaucratic parasitism that stifled and eventually strangled the planned economy, leading to the eventual restoration of capitalism. Although the bureaucracy creamed off a layer of the surplus produced in the economy to guarantee its own luxury life style, it did much more damage through its economic incompetence.

Often when workers in the Soviet Union began to seek alternatives to this bureaucratically distorted planning, they supported ideas such as ‘self management’. Those bureaucrats who wanted the restoration of capitalism also pushed this idea as they believed it would lead to the collapse of planning. I agree with Per when he says that in Yugoslavia the introduction of so-called ‘self management’ caused ethnic conflict and capitalist restoration. But rejecting these ideas, and proposals to ‘socialize the market’, does not mean that we believe everything should be centralized.

In a modern economy, socialist planning on the basis of state ownership of industry and natural resources needs a full and open discussion of priorities and their allocation to develop society in the interests of all workers. At a national and international level, this discussion would decide the general direction and priorities. Some sort of planning organization similar to that proposed by Trotsky in the early 1920s, which would coordinate investment and resources, would be required. Day-to-day decision-making and the practical implementation of the plan within the limits of the nationally agreed plan would then be devolved to the localities as far as possible. Organizations would be managed by democratically elected and accountable committees with representatives of the workforce and wider working class involved. Technical and bookkeeping experience would be provided by experts, held accountable to the committees that employed them.

If the Soviet workers had been organized in their own political party with a programme based on those ideas, capitalism would not have been restored, instead new life would have been breathed into the planned economy. Paradoxically, one of the institutions that would probably have been abolished on the way would have been the so called ‘state plan’, the centralized bureaucratic monolith based in its granite columned headquarters in Moscow. It would have been replaced by genuine organs of workers democracy at every level of society, which would have managed the planning of the economy in the interests of working people.

In the advanced capitalist countries, socialist planning will need to start not with the centralization of all decision-making but with the taking over of ownership, control and management of the heights of the economy. The establishment of genuine organs of workers’ democracy at every level will then allow the correct balance to be found between strategic decisions taken at national level and the interests of workers and society at the local level. It is because of this I think we should avoid talking about central planning and instead argue, as Trotsky did, for democratic planning.

Rob Jones



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