Julio's piece reminded of some remarks that Bukharin had made in defense of NEP in his piece, " Concerning the New Economic Policy and Our Tasks" (1925).
There, he wrote: ---------------------------------------
Although bourgeois critics of the policy of the proletarian dictatorship in Russia have offered mainly nonsense and foolishness, some of their comments were not so stupid and contained a relative truth. One of the most learned critics of communism, the Austrian Professor Mises,presented the following propositions in a book on socialism written in 1921-22. In agreement with Marxist socialists he declared that one must brush aside all sentimental nonsense and accept the fact that the best economic system is the one that develops productive forces most successfully. But the so-called "destructive" socialism of the communists leads to the collapse of productive forces rather than their development. This collapse occurs mainly because the communists forget the enormous role of private, individualistic incentives and private initiative. True, capitalism suffers from certain defects. But capitalist competition leads to growth of productive forces and drives capitalist development forward. As a result of the growth in society's productive forces, the lot of the proletariat improves as well. So long as the communists attempted to arrange production by commands, with a stick, their policy would lead, and already was leading, to an inevitable collapse.
There is no doubt that the system of War Communism, viewed in terms of its economic essence, somewhat resembled this caricature of socialism whose destruction was predicted by all the learned economists of the bourgeoisie. Thus, when we began to reject this system and shift to a rational economic policy, the bourgeois ideologists began to cry: Now they are retreating from communist ideas, they are surrendering their positions, they have lost the game, and are returning to time -honored capitalism. That is how they summarized the question. But in fact they were the ones who lost, not we.
We have been placed in a certain position, and we acted me Only way we could. But then we had to consider how to go forward, and now we can say that our opponents were the ones who lost in this debate. In the course of the struggle, we upheld what was most important and had to be upheld, namely, the dictatorship of the proletariat.
When we crossed over to the NEP we began to overcome in practice the above-outlined bourgeois case against socialism. Why? Because the meaning of the NEP lies in the fact that by using the economic initiative of the peasants, of the small producers, and even of the bourgeoisie, and by allowing private accumulation, we also placed these people objectively in the service of socialist state industry and of the economy as a whole. Freeing the commodity turnover, we made it possible to awaken the interest of small, private producers; we stimulated an expansion in production; we placed the individualistic stimuli of backward strata of the proletariat (who were motivated by noncommunist ideas and private interests) in the service of socialism; and by formalizing the previous wage system, by introducing piecework, and so on, we encouraged these strata to work in such a way that their private interests would promote an upsurge of social production. Our former view consisted of thinking it would be possible to introduce a planned economy almost immediately.
Now we see things differently. We control the main commanding heights, we organize what is essential; then our state economy, by different means, sometimes even by competing with the remnants of private capital through market relationships, gradually increases its economic might and, in diverse ways, draws the backward economic units into its own organization, doing so, as a rule, through the market. -------------------------------------- Jim Farmelant http://independent.academia.edu/JimFarmelant
---------- Original Message ---------- From: Julio Huato <juliohuato at gmail.com> To: Marxist Debate <marxist-debate at googlegroups.com>, Lbo Talk Lbo Talk <lbo-talk at lbo-talk.org>, pen-l at lists.csuchico.edu Subject: [lbo-talk] On socialism Date: Fri, 2 Dec 2011 09:34:36 -0500
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>
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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.
T ; . . 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.
Julio ___________________________________ http://mailman.lbo-talk.org/mailman/listinfo/lbo-talk
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