[lbo-talk] On socialism

Julio Huato juliohuato at gmail.com
Fri Dec 2 06:34:36 PST 2011

This is an old post of mine. I went to a list that no longer exists. People on these lists may find it of interest.

---------- Forwarded message ---------- From: Julio Huato <juliohuato at gmail.com> Date: Fri, Mar 18, 2005 at 9:04 AM Subject: Re: [Soc] Welcome To: Socialism in 21st Century <socialism at lists.econ.utah.edu>

Choppa Morph wrote a bunch of very interesting questions. I have to say that I have a hard time thinking of socialism in these terms -- as abstract answers to general questions or as general answers to abstract questions.

Usually, I think of socialism as an organic necessity springing out of the concrete, historical, living and productive conditions of people in modern societies -- that is, as the immediate, pressing need of a critical mass of increasingly productive, interconnected, educated, united, and assertive direct producers in the face of opposition by those whose perceived interests are tied to the status quo. And I see the tasks of socialists as that of helping the direct producers, in very diverse settings, to move forward as an increasingly united force.

Now, since in actual history such attributes of the direct producers don't evolve uniformly and smoothly, but in very irregular and spotty ways, I just think that particular groups of direct producers in particular settings should just do the best they can with what they have. And by that I mean the best they can to advance towards cooperating and exercising full control over the products and processes of their labor, and the mutual relations they establish among one another in their pursuits.

That said, I understand that the question is usually posed after some political revolution has taken place. So here you have a new government in place and it wants to move the process forward. Well, then the question is concrete: Given what we have here and now, what kind of socialism (with or without quotation marks) can we build?

I'm not saying the profile of socialism as a general category in the social science should remain vague, but to me, the abstract category of socialism has to be derived not only logically, but also by distilling the actual historical experience. For any notion of socialism to become sharper and make sense, it would have to be tied to particular settings and historical conditions -- e.g., yesterday's Soviet Union, today's China, Cuba, Venezuela, the future United States, today's Lacandona Jungle of Chiapas, etc. It'd have to express the particular needs and possibilities of the direct producers in specific times and places.

Still, in the spirit of cooperation with this list, I'll give it a try and nibble at one of Choppa questions. It'll be a bit incoherent -- stream of consciousness babbling. Sorry.

> 1 Is democracy enough? > > which I suppose is the same as > > 2 Can we have a socialist society most people feel comfortable with as long > as capitalism is the dominant mode of production?

> No society will feel comfortable for most people so long as capitalism > dominates the world market;

Right. If the concept of human nature has any meaning, then it has something to do with the indomitable, inquisitive, demanding, ever envelope-pushing characteristics evolved by humans in their clash with the rest of nature, as they've felt driven to assert an ever larger measure of control over their lives, as opposed to just adapt to what is given them by nature. That's encapsulated in those amazing "anthropological" passages in Capital where Marx discusses the labor process in general (as opposed to the process of creation of surplus value). On average (because tendencies are contradictory), I don't see this socially-propelled but universal human drive dying down, but actually speeding up, with civilization and modernity.

So, I expect people to grow exponentially less and less content with capitalism, and by that I mean the two inherent, but distinguishable aspects of capitalism: (1) highly evolved markets and (2) underlying wealth inequality. (I tend to exclude the direct use of extra-economic power as a distinctive characteristic of capitalism, not because I don't understand that markets can't function without property laws and their enforcement or because I don't note that the pursuit of profit has driven the use of extra-economic power to extremes unheard of in pre-modern times, but because -- as such -- the direct use of extra-economic power is common to modes of production from ancient times to modernity. So it's not differentia specifica. Since I know that a similar argument could be made of markets, I admit that my decision is arbitrary.) I personally believe that, as things appear right now, the assault on inequality is going to take front seat. Markets will have to wait. That'll be a much slower and gradual process. And the dissolution of the state even more so. I think that both evidence and logic suggest that these distinctions are crucial and will be decisive in the sequence of events as we move forward. It's very clear in his writings that Lenin struggled with these distinctions a lot in his NEP period.

Some radicals seem to be afraid of making the distinctions. They prefer to view capitalism as some amorphous monster, which in the surface it certainly is. I guess they fear that some sort of Scandinavian socialist mediocrity may emerge at a semi-global scale such that the revolutionary instincts of the working class will get blunted. Conformity and passivity would make them settle for a gentler kind of capitalism and park themselves there, instead of pushing for more. They tend to read those passages by Engels and Lenin on imperialist privilege and workers' aristocracy in too mechanical a way. In the surface, they claim it as an impossibility, yet it seems to me that's an attempt to conjure with words what they're afraid of. I think that's absolutely silly.

Serious Trotskyists (e.g., Mandel and Rosdolsky), very influential in Western Marxist circles, taking literally various passages in Marx and Engels, argued very forcefully that socialism was generally incompatible with markets, although as Michael Lebowitz has noted somewhere, the rule of distribution under the lower stage of communism (socialism, as per Marx's "Critique of Gotha's Program") entails a labor market. I really don't think we should get consumed in terminological debates about whether socialism and markets are compatible. As far as I'm concerned, I'm entirely comfortable with viewing "socialism" as compatible with a large portion of the economy being regulated through markets -- as long as inequality has been reduced drastically. Of course, the idea that markets still entail a large measure of social alienation and that, in due time, the producers will want to exercise a fuller and more direct control over their social life should always be duly noted. But, again, if you ask me, if wealth inequality is reduced drastically and a modicum of bottom-up democracy and accountability is established, then even if most markets are left intact, the possibility of a full restoration of capitalism is virtually ruled out. I'm not saying everything from that point on will be easy, but it'll certainly be much easier.

That said, we know how the U.S. views its international role nowadays, so how politically stable such arrangements would be, I don't know. I guess it depends... This means that we ought to be careful not to impose on countries that are trying to build socialism demands of conformance to some socialist criteria that cannot be met immediately or in the short run or even medium run, because they need to put their political need of survival ahead of most else. Doesn't that entail big risks of derailment of the socialist project on the name of defending a revolution? Absolutely. However, the moral burden is not on people who want to defend a revolution and the mere promise of socialism, but on those who want to destroy it. International solidarity with those peoples, as contorted as their socialists experiments may look to us, is crucial to anybody who's serious about building socialism on this earth. Solidarity with them may seem far removed from building socialism as such, but it may be the most direct route for some of us to contribute. We need to focus our energy not on fantasizing so much about how nice a harmonious society would function, but on slapping the hand of foreign powers bent on disrupting those processes and keeping the direction of the process on course.

Let me talk now about economics. Curiously, in the 1970s, the belief among theoretical economists was that general equilibrium, in its more general interpretations, had demonstrated that "an economy of decentralized markets" had proved to be just as dynamically efficient as an ideal communist society. The separation theorems in the proof of GE were used to show that one could safely disjoin the different aspects of a unified, "perfect" communist society into tiny pieces (individual markets, with producers on one side and consumers on the other in each market) and yet get the same result as in communism.

Later, Hayek's argument on the efficiency of decentralized information was used to add power to GE's conclusions. Some people have tried to answer Hayek's objection by alluding to the increasing power of computers and information processing. But I think that Hayek's argument can only target an absolutely centralized planning system. But communist or socialist planning doesn't have to be totally centralized. There has to be a shifting, multi-layered mixture of centralization and decentralization planning structures. And that will unburden the system of unnecessary information processing. If required, socialist societies would have to evolve systems to minimize the amount of information processing (which is to say, costs). As a rule, people would participate in economic decisions to the extent those economic decisions affect them most directly and, by constant trial and error, it should be possible to determine the right combination at a given point in time. (I'm not saying that Hayek's argument is irrelevant, particularly in the case of markets of goods that are clearly private -- i.e., nonrivalrous and excludable. But that's why markets make a lot of sense in the early stages of building whatever socialism we may be able to build.)

But, back to GE, its "victory" proved to be like those conquests by Alexander the Great, who appropriated each new piece of territory only to discover to his dismay that he had only conquered a new border. First, the general equilibrium story totally eschewed the issue of the initial allocation of wealth. So, GE did not really face off with Marx's argument. (This is something Ken Arrow has admitted, I believe.) Marx's argument was that the social premise of existence of the labor market (and, therefore, capitalism) was inequality. Capitalism reproduced that basic inequality. And in a context of inequality, whatever mechanism people use to negotiate their mutual interests ("competitive markets," "democracy," whatever) becomes a sham to disguise the abuse of the weak by the strong. This is Marx's famous transition-of-forms proof, his own answer to the problem he posed in the second part of Capital, vol I: How can you derive exploitation not from the violation, but from the strict application of the rule of equivalent exchange?

Second, the conclusion that *under the assumptions* GE proved what it did make people shift the attention immediately to those assumptions. Some implicit assumptions were uncovered or their depths began to be probed -- like the one of perfect information. Marxists have tended to disregard these fractures in the armor of theoretical economics as superficial, but I don't think they have cared to look at them very carefully. And then the quest began to experiment with alternative assumptions.

I was just reading the other day some passages of Hegel's Science of Logic, and I decided to replace his constant allusions to metaphysics and speculative philosophy with 'theoretical economics' and his allusions to Kantian empiricist philosophy with 'empirical economics,' and I got a kick out of it. You read it that way and you say, wow, this man was really mapping how in the long sweep humans appropriate the world mentally! Indeed, the evolution of modern conventional economics is that process that traces the Spirit's evolution from Being to Essence to Notion. Except that, as we all know, it's all upside down.

So, by its own evolution in the last 30 years, theoretical economics has ended up with the question of inequality, again, squarely at the center of the discipline. And there's no way around it. I don't think the capitalists are very enthusiastic with the way modern theoretical economics is highlighting this big elephant in the room. Theoretical economics provides absolutely no reason for societies to accept the inequality that underlies capitalist societies. The last attempts to use economic reasoning in rationalizing inequality are dated: Friedman's "Capitalism and Freedom" and the works by the founding fathers of the neocons, which later broke up with economic reasoning altogether. But, worse yet, modern theoretical economics shows that inequality is non-economical, not only on the grounds of equity (normative values), but on the grounds of efficiency as well!

I think this is remarkable, but I don't envision many theoretical economists rushing to draw the ultimate conclusions out of their system. They have no vested interest to pursue this "research program." But it's like the state of classical political economy after Ricardo's death all over again. There may be some J.S. Mills out there (sometimes Krugman and Stiglitz look to me that way), but we need the push of a Marx -- or better yet -- many Marxes to carry this out to the ultimate ruthless consequences. I see a gap here, because the interest of radical Marxists is somewhere else. They have tended to take refuge in other social sciences or they are more -- loosely speaking -- 'empiricists' than 'theoreticians.' Mostly, I think, it's like Esopo's fox, who couldn't get the grapes and decided then that they were all sour. So they decided to regard economics as pure apologetics, otherwise useless.

Now, let me return to an idea I hinted above. I said that, as long as inequality is reduced drastically, we have some sort of "socialism." I could add something else: direction. Say, as long as inequality is reduced drastically and such society appears to be moving towards the direct producers exercising an increasing measure of control over their economic and social life, although not necessarily being in the midst of immediately dissolving markets and the state (because they are not "rational" any more and not just arbitrarily or pushed by political necessity).

But, again, we have to think of those pesky political conditions. Can such direction be maintained in a poor country besieged by big and threatening capitalist powers? Perhaps the political conditions will make it immediately necessary to centralize political power or subject the management of the economy to direct command when it is not ready to abandon markets. The political dynamics is key, because as I said first, producers can only assert direct control over their economic and social lives in the face of relentless opposition by those who profit from the status quo.

Now, equality and inequality of what? The argument is, most people agree on equality, but the agreement stops there: equality of what? If you're equal on some dimension, you may not necessarily be equal on the other dimensions. In general, the notion of wealth is rather unproblematic. Wealth or, more specifically, productive wealth is any source of power: labor power (what economists call "labor" cum "human capital"), natural resources, and "capital" (durable goods). Measuring wealth in an operational sense is challenging, but that's always the case with operational measures. And to me, that's the category to equalize.

Moreover, it seems to me that the distinctions between "equality of opportunities" versus "equality of outcomes" (versus "equality of rights" versus "equality of freedoms" versus "equality of liberties" versus "equality of capabilities" versus "equality of functionings" versus "equality of income" versus "equality of wealth" versus "equality of consumption," etc.) that has consumed people like Amartya Sen (and the parents of the neocons) are pertinent, but also wildly overblown.

In actual practice, the conceptual intersection of all of those categories, as a simple exercise in speculative Hegelian dialectics would demonstrate, is huge. So, I'd gladly leave for the future generations of socialist human beings to split those hairs. At first sight and *in the face of the current disparities in the global economy*, the correlations between these categories are huge. Basically, people who have more wealth tend to have more opportunities, outcomes, effective rights, freedoms, effective liberties, capabilities, functionings, income, consumption, and future wealth. So, if we just take any reasonable measure of wealth (human and physical) and try to equalize it, I'm happy with it. That can be "socialism" as far as I'm concerned.

In a related note, I also find it wildly exaggerated the concern that some people have with the kind of social differences that *could* arise due to the fact that wealth (for example, human wealth) cannot be absolutely equalized. They're so afraid that those individual differences may engender a new, perhaps more sinister, kind of oppression. While socialists should always be in the look for those things, we should put things in due perspective. Nowadays, the huge disparities in regular, whichever-way-you-measure-it wealth (say, land ownership in the rural areas of poor countries) are the ones that matter most. We simply cannot rule out the dangers of all possible new oppressions resulting from things not going perfect. But we should never let those concerns about future dangers override what torment most the world's majorities right now.

Finally, in modern conventional economics, the notion of "ownership" is undergoing a nice "deconstruction." It's been shown, for example, that you can look at ownership in the sense of a continuum of "rights." In that context, it is usually called "excludability." That has come from the studies of technology in the endogenous growth literature, related to the definition of "externalities" and, more specifically, "public" and "semi-public" goods. There's another take on ownership from the finance angle. For example, collective ownership can be viewed as risk sharing -- something like a group insurance contract. Etc. I think socialists should be mindful of those studies and open to what makes sense in them. I'd dare say that, for the problems that arise in the context of managing a socialist economy, those insights can be decisive. That's just a thought...

And I'll stop right here.


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