----- Original Message ---- From: Chris Doss <lookoverhere1 at yahoo.com>
The Soviet-style economies had cooperatives from their inception, and the only way the USSR kept agriculture going was by supplementing the kolkhoz system with private farming (which was much much much more productive). So I'm not sure what you're getting at here. ?
[WS:] True. In case of Poland most of agriculture was private and most of retail was under ccooperative ownership.
The main point is, however, that ownership is a fetish created by bourgeois ideology and nilly-willy inherited - as a villain- by Marxists. In reality, it does not matter than much vis a vis macro-economic factors and the actual control of the production process.
For example, Polish agriculture was "privatized" in 1947 as a part of the agrarian reform. The move had obvious political underpinning, and not so obvious but more important economic ones. Historically, in Poland (and Russia prior to the revo) labor-repressive agriculture (large plantatiojn-style estates controlled by a very small landowning elite) dominated the economy. Landowners had little incentive to innovate, because they could maintain profitablity by repression and super exploitation of farm labor. So in that context, centralized private ownership was inefficient.
The land reform introduced by communists in 1947 obviously catered to popular resentment of the landowning elite, but it had economic reasons as well. Since the underdeveloped industry was largely destroyed in the war, mechanization of agriculture was out of question for a while - at least without foreign imports, which would cretaed dependency on foreign capital. So dividing the land into 10-hectare per farmer small-holding was a move to improve effciency of the ag sector run largely by man- and horse-power, at least in a short run.
In a long-run however, it was inefficient, because small-holders could not afford buying farming equipment when it became available (after the industrial production took off) or for that matter employ it effciencty due to a small size of farms, even if farmers had it. The solution that communists pushed was farming cooperatives, which many farmers resisted fearing "collectivization." At that point private decentralized ownership that used to be effcient under one set of macro-economic circumstances again became inefficient when those macro-economic conditions changed.
So Poland ended up with a mostly private small-holder agriculture (some of it forming coops) and some state-owned farms - which was rather inefficient. When you add to it the need to pay foreign debt that the state incurred in the 1960s and 1970s, and the only thing they could export was ag products (since the world marked was flooded with cheap schlock manufactured in Asia, and they did not have the capacity to produce hi-tech goods) - you have a prescription for a disaster - food shortages and bread lines.
As to the industrial enterprise - let's start with the observation than in modern economy ownership is typically seprated from control (which was not the case of Britiain in Marx's time.) That is to say, those who "own" the enterprise typically do not control it. That control is exercised by specialized employees, and more specifically a small group of them called the management.
So it is really the management that matters - and the management again is more responsive to macro-economic conditions than to any form of instituional control, be it by "owners" (either stockholders or coop members) or by "ex-offcio" boards. In communist countries, the latter function was performed by communist party cells and labor unions at the micro-level - each enterprise had one, and nominally they had power to hold management responsible for their decisions. On the macro-level the control function was performed by the state planning commission (and ministries.)
What actually happened is pretty well-known today, and worth reiterating. These forms of institutional control did not matter that much - and both unions reps and party secretaries were typically in cahoots with the managers to circumvent planning, instead of holding them accountable. There are two main reasons for that: micro-structural and macro-structural.
The key micro-structural reason is what in organizational theory is known as "bounded rationality" which usually means limited access to information and considrable cost of obtaining that information. Union reps and party secretaries did not have the information that the mangers did, and which was necessary to run the shop. Nor did they have the expertise and skill to easily access that information, even if they wanted to. The same held for state planners - they may have had the expertise by they did not have the technical capacity to effectively gather information independently of enterprise managers. In the end, it was the managers who controlled the information about the enterprise, which put them in a strong position vis a vis all institutional controllers (union reps, party secretaries, and state planners.)
Second, the performance of the firm was very much affected by macro-economic factors, such as availability of labor, availability of supplies, and demand for its product. Albeit these things were supposed to be planned, in reality planning was unable to control wide fluctuations. Consequently, each enterprise had to obtain the needed input through bargaining and exchange (usually barter) with other enterprises, which is basically the same what firms in a market economy do. This made the management very responsive to the current macro-economic conditions, and much less responsive to institutional controls imposed on them.
For example, managers would circumvent centrally planned employee compensation schedules, if they faced labor shortages, e.g. by offering bonuses, or non-cash benefits in lieu of wages. They would hunt for deals and barter with other enterpises, if they faced shortage of supplies (material and intermediate products.) Indeed the "procurement officer" - basically a company sales rep endlessly scouting the country in search of supplies and outlets - was an iconic figure in the socialist economy.
So at the end of the day, the managers did what they needed to to run the firm under a specific macro-economic conditions, and the instituional "watch dogs" were actually cheerleading them, because their own status depended on the economic success of the firm. If the firm fell short of production targets, it was not just the mangement who got their ass kicked, but the party secretery and the union rep as well. So the watch dogs were in cahoots with the management, but even if they were not, the management was in a position to treat them like mushrooms (keep them in the dark and feed manure.)
In sum, socialization of ownership did not prevent the undesirbale outcomes typically associated with private ownership. Likewise, privatization does not necessarily improve effciency, in fact it often decreases it (cf. US health care system.) What really matters is how the process of production is actually controlled and what to what knd of macro-economic conditions this control is programmed to respond.
Wojtek