> Okay, we're using different definitions of the "whole economy". I'm
> talking about the production, distribution, and consumption of all
> goods and services in a given society. Even in a capitalist society
> like the U. S., the "shadow" economy of household labor, charity work,
> church activities, etc. is about equal in economic value to the formal
> GDP. Thus if all of the economic activity currently conducted by
> private businesses were nationalized, about half of the economy
> (broadly defined) would be included in the central planning.
>
> I stress this point for two reasons. First, a tremendous amount of
> the important economic activity in our society is not market based.
> Not coincidentally, women do much of this invisible economic work
> (child care, cooking, laundry, elder care, etc.). Pretending that
> this work is not part of our economy reinforces sexism ("she doesn't
> have a real job, she's just a housewife"). Second, the fact that all
> this nonmarket economic activity hums along in a purportedly
> capitalist society shows us that people can effectively organize
> economic activity without "price signals". All we need is people
> enculturated into a specific social system in which certain types of
> mutual aid are expected and socially sanctioned. Call me a dreamer,
> but if we can effectively produce about 50% of the total U. S. economy
> without price signals, why can't we produce 100% that way?
Miles, I'm not calling you a dreamer, I'm calling you someone who's refusing to apply his critical intelligence to a cherished belief.
Obviously, intra-household services can be easily planned, because they deal with the exchange of services among three or four people. A church bake sale can be easily planned because you're coordinating a very narrow set of activities among maybe 100 people. But the minute either of these activities requires inputs whose production demands the mobilization of large-scale resources - a housewife needs Windex, the church needs a van for the carpool - the participants will aways turn to the market sector to supply the van or the Windex. So even if one day everyone under capitalism somehow woke up miraculously enculturated into the belief that all production - not just church bake sales and intra-household labor - should be undertaken according to the ethic of mutual aid, how would they all spontaneously know what labor to do, which goods to produce, where to get the inputs, what methods are best, who to give the product to for the next stage of production, how much other people value the outputs? They wouldn't - it would require coordination by a process of central planning. (Or integral planning, if you prefer.) It would indeed require that the "whole economy be planned."
Doug Henwood wrote:
>> When corporations plan, they have the advantage of being able to plan
>> based on market prices.
>
> Which means, in practice, that they raise and lower prices to reflect
> demand (and to squeeze competitors). When they introduce a product,
> setting a price is no trivial matter. So, these "market prices" are
> the result of trial, error, and guesswork. There's no *theoretical*
> reason why planners couldn't do the same thing.
I suspect this might work okay in a hypothetical world where production was static: Draw up a comprehensive list of all the final commodities produced in the economy. (In the US it would surely number in the tens of millions.) Then for each commodity, map the input-output matrix and document the technology. Then draw up the plan. From now on, the only changes permitted to the plan are those dictated by exogenous shifts - the weather causes a bad harvest; a temporary labor shortage in some occupation arises due to demographics; consumer tastes may shift, but only from one pre-existing good to another (beef to chicken, etc.)
I would guess that after a period of fumbling and trial and error, the obvious societal upheaval, and after herculean efforts were made by the planning machinery, the planners could get to a point where they had the whole process down cold. Now they can handle any change that the weather, demographics or (static) shift in consumer tastes throws their way. The problem would arise the minute you tried to add the continual introduction of new products and process improvements. That's when either the whole process would break down, or the improvements and new products just wouldn't materialize.
SA