[lbo-talk] Parecon entrepreneurialism?

Wojtek Sokolowski sokol at jhu.edu
Thu Sep 25 06:37:59 PDT 2003


Bodi:
> The Soviet Union was rife with hording,
> likewise capitalist industrial workplaces. The difference is that
> eventually hording *costs* a capitalist workplace real money. It cost
a
> Soviet workplace nothing. All you had to do was pad your requests a
bit,
> persuading yourself and your comrades that you were doing the best
thing for
> the workplace.

I do not think it is a fair statement. Hoarding had a tremendous cost in the Soviet economy - but that cost was not borne by the enterprise management, but "socialized," which means that they were eventually passed on the enterprises, albeit in an "averaged" quantity. Hoarding persisted not because of the absence of cost, but because of distinctive short term benefits to the enterprise management. These were:

(1) Increased ability to deal with uncertainty - such as a supplier did not meeting his contractual obligation to deliver "intermediate consumption" products. That would prevent the enterprise from meeting its planned goals, for which the mgmt was personally liable. Hoarding solved that problem by giving the mgmt a "bargaining chip" to barter the "interim consumption" items from other suppliers.

(2) Access to shadow economy - the hoarded goods were generally poorly accounted for, so the mgmt could simply "liquidate" them in one form or another and pocket the proceeds.

Even more interesting is the fact that this behavior continued unchecked despite the presence of the watchdog, the Party cell attached to each enterprise. The role of the Party secretary in that cell was to watch the management that it does not abuse the "public trust" which in the part lingo was the code word for "central directives" (i.e. the Party interests). In reality, the secretary was almost always in cahoots with the top management for a very simple reason - if the mgmt went under, the firm would usually suffer (since the mgmt's political and personal connections were crucial to the firm's success), and that would diminish the status to the party secretary.

That is, btw, not that much different from the US corporate economy operates. The execs rake in fabulous profits from moving other people's money, but it does not cost them a dime if the scheme flops - it is the other people who bear the risk and pay the price (cf. Silverado S&L, or Enron). That behavior is rampant despite the presence of various watch dogs, including the Board - which is usually a collection of the firm's management puppets.

What it demonstrates is that the so called "command" and "market" economies were not as much different in their organizational behavior as the propagandists on both sides claimed, the differences in institutional blueprints notwithstanding. It also demonstrates that institutional blueprints do not matter that much as the presence or absence of effective control mechanisms. Neither the Party cell nor the Board proved effective in this respect - so I have no reason to believe that worker's councils would be any different.

Wojtek



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