Planning, Market & Unemployment

Wojtek Sokolowski sokol at
Mon Aug 30 09:22:12 PDT 1999

At 09:43 AM 8/28/99 +0100, Jim h. wrote:
>I tend to think that Hillel Ticktin's argument about the character of
>the 'planning' system in the USSR carries weight (as in 'Origins of the
>Crisis in the USSR' Sharpe 1992). Ticktin makes the point that what was
>called planning was even more chaotic than the free market. Because the
>plan was simply imposed upon different points of production as an
>external regulation, those concerns had every interest in meeting the
>plan in words, but not in fact. Ticktin lists some of the non-use values
>the USSR produced from shoes you could not wear, to factories without
>roofs, and spare parts that did not fit. The 'bulk output' was to a
>considerable degree just plain waste - products that no-one could use.
>Such products fulfilled the targets, because the targets were paper
>targets with no real check on quality, or feedback mechanism that would
>hold managers to account. For that reason the growth rates celebrated by
>the CIA and the USSR alike should be taken with a pinch of salt. Making
>junk is not growth. Capitalists who had hoped to make a killing buying
>up soviet industrial know-how have been gravely disappointed.

Jim, but a rational person would naturally ask why those targets were "paper targets" - unless of course we want to give credibility to bourgeois ideology of 'irrationality" of non-market systems.

As I argued elsewhere, central planning can be theoretically defended as creating superior to market rationality by slashing down transaction costs resulting from imperfect information. However, in order to work in that capacity, planning must create an efficient mechanism for information flow to set forth optimal production targets.

It is a well documented fact, however, that such information flow was less than perfect, to say the least. In plain Englsih, SOE managers fed misleading information about their true productive capacities, resources etc. to the central planning authorities. Knowing that, the planning authorities implemented the practice known as "taut planning" or imposing production quota that assumed higher than reported productive capacities. Since the planning authorities had no way of knowing which SOEs uinderestimated their reported capacities and by how much, the whole process of "taut planning" was reduced to a guessing game. Hence overproduction of certain items and underproduction of others, as well as the proliferation of informal barter between SOEs to make up for the losses, inefficiencies etc. - which further exacerbated the SOE's management need for underreporting (they could turn the 'hoarded' capacities or goods to profitable barter).

So the real question is why the information exchange system was less efficient than planned - which leads us in the direction of examining institutional ramification of knowledge producers. It is my contention that it is the latter-days "boyarschina" or factory managers and intellectuals who finished off efficient planning in the pursit of their own class power. This also explains why 'bat'ushka' (uncle) Stalin was so paranoid in his distrust of these ratfuckers. Of course, that explanation will not play well in the halls of harvard, yale, or chicago.


More information about the lbo-talk mailing list