Catalyst Topic: "Socialism for Realists" by Sam Gindin, part 2
This is part two of the essay, where we get into some nitty-gritty questions, like how to get people to do work that is really distasteful or even dangerous under socialism. Interesting stuff.
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Part Two: Framing Socialism
Socialism and Markets
At the heart of finding a way to manifest social property is the tension between planning and markets. In this section we insist that that this is not a matter of planning versus markets but of discovering creative institutional mechanisms that structure the proper place of planning and markets. Marx rightly argued that praising the voluntary and efficient nature of markets apart from the underlying social relations in which they’re embedded fetishizes markets. But markets are also fetishized when they are rejected as an absolute and treated as having a life of their own independent of those underlying relations. The place of markets under socialism is a matter of both principle and practicality — and dealing creatively with the contradictions between the two. Some markets will be banished under socialism, some welcomed, and some reluctantly accepted but with constraints on their centrifugal antisocial tendencies.
Rejecting markets in favor of leaving decision-making to the central planners comes up against the fact that, as the Soviet central planner Yakov Kronrod noted in the 1970s, economic and social life are simply too diverse, too dynamic, and too unpredictable to be completely planned from the top. No amount of planning capacity can fully anticipate the continuous changes encouraged by socialism among semi-autonomous local groups, nor — given that many of those changes occur simultaneously with repercussions upon repercussions across workplaces and communities — respond without pronounced and disruptive lags. Putting too great a load on central planning can therefore be counterproductive; plans work best if they concentrate on a limited number of key variables and don’t overload themselves with too much detail.21
Moreover, the heavy hand of the “vast and complex administrative system of allocation” carries the threat, as illustrated in the former USSR, of a crystallization among those occupying the commanding heights of the economy — central planners, ministry heads, workplace managers — into what Kronrad called a self-reproducing “social oligarchy.” As that oligarchy pushes for compliance to its rigid plans it also brings forth increased authoritarianism and bureaucratization (Kronrod was not alone in this argument but was especially insistent on it). If the heavy hand is eased by instead setting “parameters” to be met, this means bonuses for conforming and penalties for underperforming. Such incentives bring market-like problems in a different form, one that may not even include some of the advantages of formal markets.
Albert and Hahnel likewise reject markets but look to planning administered from below.22 Their creative and meticulous model is based on elected representatives from workplace collectives meeting with representatives from suppliers, clients, and the affected community. The community must be there because it has a stake in workplace decisions on the consumption side but also because of the impact of those decisions on roads, traffic, housing, environmental conditions, etc. Together these interested parties develop mutually agreed upon plans and since such plans would most likely not immediately match the broader supply and demand conditions in the economy, an iterative process of repeated meetings to come closer to balance could, they argue, ultimately close the gaps.
This might work in specific cases, and perhaps become more significant over time as shortcuts are learned, computing innovations expedite the procedure, and social relations are built up. But as a general solution it is simply not viable. The context of scarcity, various interests, and no external arbiter of any kind is likely to lead to unending conflict rather than a comfortable mutual consensus. Given the larger interdependencies of production and consumption involved with their implications for a multitude of decisions being made and revised concurrently not just in sequence and each with cascading consequences, such a process could not help but lead to an oppressive tyranny of meetings.
Markets will be necessary under socialism. But certain kinds of markets must be unequivocally rejected. This is especially so for commodified labor markets. The argument runs as follows. Planning — the ability to conceive what is about to be constructed — is a universal characteristic of human labor: “What distinguishes the worst architect from the best of bees is that the architect raises his structure in imagination before he erects it in reality.”23 A core critique of capitalism is that the commodification of labor power robs workers of that human capacity. Individual capitalists plan, capitalist states plan, and workers as consumers also plan. Yet in selling their labor power to get the means to live, workers as producers surrender their planning capacities and human potential to create. This original sin of capitalism is the foundation for the broader social and political degradations of the working class under capitalism.
Yet the question of reallocating labor remains and, if workers are to have the right to accept or reject where to work, this implies a labor market of sorts. But this would be a labor market of a very particular, limited, and decommodified kind. Based on the need to attract workers to new sectors or regions, the central planning board would set higher wages (or more favorable housing and social amenities), adjusting them as needed if the workforce falls short. Within the wage framework set by the central plan, the sector councils could likewise raise wages to allocate workers across workplaces or into new ones. Workers could not, however, be fired nor lose work through competitive closures of workplaces and should there be a general shortage of demand relative to supply, demand could be stimulated or worktime reduced as the alternative to the creation of a reserve army to discipline workers.
Alongside commodified labor markets being out of bounds so too must capital markets be prohibited. Choices over where investment goes are choices about structuring every facet of our lives and shaping future goals and options. Economic indices can be brought into making such decisions, but the common rationale for such indices — their ability to compare alternatives based on a narrow range of monetary economic criteria — is offset by the unquantifiable complexities of assessing what is to be valued. And though credit will exist under socialism in terms of providing credit for consumers, funds for individual or small co-op start-ups, or workplace collectives dealing with the gaps between buying and selling, financial markets based on the creation of financial commodities would have no place.
On the other hand, who can imagine a socialism without a marketplace of coffee shops and bakeries, small restaurants and varieties of pubs, clothing stores, craft shops, and music stores? If the underlying conditions of equality are established so these markets are about personal preferences not expressions of power, there is no reason to be defensive about welcoming them. It is when we turn to the commercial activities of workplace collectives that the role of markets takes on their greatest, and most controversial, significance.
In addressing the dilemmas involved in worker collectives operating through markets, it’s useful to begin with a quick sketch of a worker in a workplace collective under socialism. Outside of self-employment and co-ops with a handful of workers providing local services, workers control but do not own their workplaces. The workplaces are social property; ownership resides in municipal, regional, or national state bodies. Workers hold no workplace-based marketable shares to sell or pass on to their families — there are no private returns to capital under socialism. Though individual workers can leave their jobs and look for work elsewhere, workplace collectives cannot decide to shutter their workplaces since they aren’t theirs to close. If demand for the goods or services produced fade, the collective would be integral to conversion plans to other activities.
Workers do not work for “others” but collectively organize their labor power with the after-tax surplus shared among them. Income wouldn’t be based on receiving “the fruits of your own (private) labor” since work is a collective, not private activity. Those working get pay for their work based on hours worked and the intensity or unpleasantness of the work. Everyone, employed or not, shares in a social wage — the universally free or near-free collective services distributed according to need (e.g., health, education, childcare, transportation) as well as subsidized housing and culture. Those not in the paid labor force receive a consumption stipend set at a level which allows people to live in dignity, and the distribution of each collective’s after-tax surplus would be distributed as either additional collective services and/or individual bonuses.24
In the absence of income from capital, and with the social wage carrying great weight relative to individual consumption, the effective variation in the conditions of workers will lie in a relatively narrow, egalitarian range.25 In this context, there will be concerns that prices reflect social costs such as environmental impacts, but beyond that there seems little cause for socialist angst over workers using their individual earnings to choose which particular goods or service they prefer. Nor is there much reason to worry about the existence of credit. With basic necessities essentially free, housing subsidized, and adequate pensions in retirement, pressures to save or borrow would largely be limited to different time preferences over the life cycle (e.g., saving for a trip at retirement or wanting an appliance now). As such, workplace or community credit unions, or for that matter a national savings bank may, under nationally supervised conditions and interest rates, mediate credit flows between lenders and borrowers with no threat to socialist ideals.
Yet while the authoritarian market discipline imposed under capitalism will no longer exist, workplace collectives will still generally operate in a market context of buying inputs and selling their goods and services or, if the final product has no market price, of measurable output targets. Incentives to act in socially sensitive ways (such as operating efficiently) consequently remain necessary. This would take the form of a portion of the surplus generated by the collective going to its members as collective goods (housing, sports, culture) or income for private consumption. This brings a mechanism for bringing opportunity costs into decision-making, such as how valuable an input is if used elsewhere and how valuable others consider the final product.
This however also re-introduces the negative side of markets: the incentives involved imply competition, which means winners and losers and therefore non-egalitarian outcomes. Moreover, if those workplaces which earn a larger surplus were to choose to invest more, their competitive advantages would be reproduced. Especially significant, the external pressures to maximize the earned surplus or beat state-set standards affects internal structures and relationships within the collective, undermining the substantive meaning of “worker control.” Emphasis on the achievement of large surpluses as the prime goal tends, for example, to favor replicating the “more efficient” divisions of labor of old and — for the same reasons — deference to expertise and toleration of workplace hierarchies. With this comes the downgrading of other priorities: a tolerable work pace, health and safety, solidaristic cooperation, democratic participation.
Though ending private ownership of the means of production addresses the critique of the inter-class relations underlying markets (no more bosses), what remains is the intra-class conflict between workplace collectives connected through competitive markets. At the extreme, the competitiveness fostered becomes a backdoor to labor-market-like pressures on workers to conform to competitive standards.26 We turn, in the next section, to whether the use of markets can, via institutional innovations, be adapted to limit such negative thrusts of markets.
Sectoral Councils
Though planning and worker control are the cornerstones of socialism, overly ambitious planning (the Soviet case) and overly autonomous workplaces (the Yugoslav case) have both failed as models of socialism. Nor do moderate reforms to those models, whether imagined or applied, inspire. With all-encompassing planning neither effective nor desirable, and decentralization to workplace collectives resulting in structures too economically fragmented to identify the social interest and too politically fragmented to influence the plan, the challenge is: what transformations in the state, the plan, workplaces, and the relations among them might solve this quandary?
The operating units of both capitalism and socialism are workplaces. Under capitalism, these are part of competing units of capital, the primary structures that give capitalism its name. With socialism’s exclusion of such private units of self-expansion, the workplace collectives are instead embedded in pragmatically constituted “sectors,” defined loosely in terms of common technologies, outputs, services, or simply past history. These sectors are, in effect, the most important units of economic planning and have generally been housed within state ministries or departments such as Mining, Machinery, Health Care, Education, or Transportation Services. These powerful ministries consolidate the centralized power of the state and its central planning board. Whether or not this institutional setup tries to favor workers’ needs, it doesn’t bring the worker control championed by socialists. Adding liberal political freedoms (transparency, free press, freedom of association, habeas corpus, contested elections) would certainly be positive; it might even be argued that liberal institutions should flourish best on the egalitarian soil of socialism. But as in capitalism, such liberal freedoms are too thin to check centralized economic power. As for workplace collectives, they are too fragmented to fill the void. Moreover, as noted earlier, directives from above or competitive market pressures limit substantive worker control even within the collectives.
A radical innovation this invites is the devolution of the ministries’ planning authority and capacities out of the state and into civil society. The former ministries would then be reorganized as “sectoral councils” — structures constitutionally sanctioned but standing outside the state and governed by worker representatives elected from each workplace in the respective sector. The central planning board would still allocate funds to each sector according to national priorities, but the consolidation of workplace power at sectoral levels would have two dramatic consequences. First, unlike liberal reforms or pressures from fragmented workplaces, such a shift in the balance of power between the state and workers (the plan and worker collectives) carries the material potential for workers to modify if not curb the power that the social oligarchy has by virtue of its material influence over the planning apparatus, from information gathering through to implementation as well as the privileges they gain for themselves. Second, the sectoral councils would have the capacity, and authority from the workplaces in their jurisdiction, to deal with the “market problem” in ways more consistent with socialism.
Key here is a particular balance between incentives, which increase inequality, and an egalitarian bias in investment. As noted earlier, the surpluses earned by each workplace collective can be used to increase their communal or individual consumption, but those surpluses cannot be used for reinvestment. Nationwide priorities are established at the level of the central plan through democratic processes and pressures (more on this later) and these are translated into investment allocations by sector. The sector councils then distribute funds for investment among the workplace collectives they oversee. But unlike market-based decisions, the dominant criteria are not to favor those workplaces that have been most productive, serving to reproduce permanent and growing disparities among workplaces. Rather, the investment strategy is based on bringing the productivity of goods or services of the weaker collectives closer to the best performers (as well as other social criteria like absorbing new entrants into the workforce and supporting development in certain communities or regions).
That partiality to equalizing conditions across the sector would no doubt lead to resistance from some workplaces. Crucially, it would be backed up by the central plan and the conditions that come with the center’s investment allocations to the sectors. The tension between the need for incentives and commitment to egalitarian ideals would reflect practical realities. It would be conditioned by the extent to which socialist ideals have permeated the workplace collectives and sectoral councils and the self-interest of some workplaces opposed to intensive competition. But this would be balanced by ongoing concerns about efficiency and growth. Over time, to the extent that the ideological orientation is strengthened and material standards rise, this would be expected to facilitate a greater favoring of equality.
Closing the performance gap between workplace collectives would especially be reinforced by significantly centralizing research and development (though some might still be workplace specific) and sharing the knowledge across the sector rather than seeing it as a private asset and source of privilege. As well, regular sectoral production conferences would take place to share techniques and innovations, cross-workplace exchanges would be facilitated to learn best practices, and teams of “fixers,” including both engineers and workers, would be on call to troubleshoot particular problems and bottlenecks in workplaces and among suppliers.
What distinguishes the socialist workplace from its capitalist counterpart is therefore not just that there is no private owner and delegated managers, but that workers don’t live under the external threat of compete or die. There are no omnipresent threats of job loss and layoffs, the high level of universal benefits leaves people far less dependent on earned income, and the sectoral councils regulate disparities between workplaces. It’s only in such a context, where the competitive pressures to conform to standards of surplus maximization are alleviated, that worker autonomy and control can have a substantive rather than only formal meaning.
Without employers pushing workers to maximize the surplus and/or lower costs, and with the market pressures for workers to police themselves significantly eased, the space is established for workers to make choices that can demonstrate what everyday worker control and decommodification might genuinely mean.27 Inside the reincarnated workplace, basic rights do not vanish when the border into the workplace is crossed. The rigid division of labor, including the rigidities built in by labor in its self-defense, becomes an open field of experimentation and cooperation. Hierarchies can be flattened — not by dismissing the importance of those with special skills but by integrating them as mentors (“red experts”) committed to democratizing knowledge and making complex issues understandable. With workers given the time, information, and skills to regularly participate during worktime in planning production and resolving problems, it becomes possible to finally imagine a decisive blurring of the historic separation between intellectual and manual labor.
The culture of rights and responsibilities that can emerge in this context, especially the new self-confidence of people seeing themselves as more than “just workers” could not be confined to the workplace. It would flow into the local community and beyond, raising democratic expectations of all institutions, especially the socialist state. This new social authority of the working class, materially reinforced by the weight of the worker-led sectoral councils in influencing and implementing the national plan, corrects a previously missing check on the central planners and establishes the footing for assertive initiatives from below. In this world without capital or labor markets, with tight institutional constraints and countermeasures against subsuming labor power to the discipline of competition, it could credibly be argued that the commodification of labor would be effectively done away with.
Layers of Planning
The introduction of worker-elected sectoral councils as powerful new institutions outside the state suggests reframing how we think about socialist planning. Debating “the plan” vs “decentralization” is not all that helpful. The decentralization involved in the formation of sectoral councils also includes the consolidation or centralization of workplaces into sectors. And, as we shall see, though there is a degree to which the central plan is sharing its power with other structures, this does not necessarily mean a loss in its effectiveness as a planning body. It therefore becomes more useful to contemplate a system based on “layers of planning.” These interdependent layers include the central planning board of course, and the sectoral councils. They also include markets as an indirect form of planning and, with the critical role of the sectoral councils in constraining market authoritarianism, planning also extends to internal workplace relations. And they include a spatial dimension supplementing the sectoral emphasis.
The dominant anxiety over organizing the material conditions of life and the practical fact that so much of social interaction occurs through work (all the more so if workers are intimately involved in planning that work) gives a special weight within the layers of planning to the economy. But the importance of the social and cultural, of the urban and its relationship to the suburban and rural, demand a spatial layer of planning. There is, in this regard, a history of on-again off-again experiments in the former Soviet Union with regional decentralization. The devolution of the spatial to the regional and sub-regional, like the devolution of ministries to worker-controlled sectors, would allow the otherwise overloaded center to concentrate on its own most important tasks and bring planning closer to those most affected by, and most familiar with, local conditions. Along the way it would vastly multiply the numbers potentially able to participate actively in planning.
This distinction between the production and spatial/consumption side of planning would likely bring new tensions, and not just between different institutional groups but even within individuals since these individuals are always workers, consumers, and participants in community life. Some of this might be eased by including community representatives in the sectoral and workplace planning mechanisms. In the service sector in particular, and to some degree also in the case of some local manufacturing, the “municipalization” of the ownership of hospitals, schools, utilities, energy distribution, transportation, housing, and communications opens another possibility. The creation in these cases of local “community councils” might facilitate bridging the everyday tensions among the various dimensions of people’s lives. As socialism matures and productivity is increasingly expressed in reductions of working hours and increased leisure, the role of such councils — with their emphasis on rethinking streetscapes and city architecture, expanding the provision of daily services, developing sociality, encouraging art and cultural expansiveness — would, in line with the ultimate goals of socialism, be expected to gain in comparative prominence relative to the more narrowly conceived demands of economic organization.
Such transformations in the relationship between the central plan and the rest of the economy/society would bring both supports and mutual checks among the layers of planning extending across workplace collectives, sectoral councils, regional councils, markets, and the modified central planning board. To this would be added the role of political mechanisms to establish national goals: ongoing debates at all levels, lobbying and negotiating between levels, and contested elections revolving around future direction which — because of its importance and genuine openness to public direction — would hopefully bring the widest popular participation.
This decentralization of power and increased spaces for participation would be a powerful check on the “social oligarchs” that Kronrod and others have been so concerned to limit, but it would not necessarily mean a weakening in the significance of the central planning mechanism. In the spirit of Kronrod’s critique of excess planning, it may leave planning less intrusive but more effective. And the very dispersal of power makes the importance of a coordinating body, even if less directly hands on, even more critical. In fact, even as the planning board sees some of its functions shifted elsewhere, this may lead to the board having to take on certain new functions such as monitoring and regulating markets, introducing new mechanisms for revenue generation in the unfamiliar world of extended markets, and transforming education curriculums to incorporate developing the popular capacities essential for the explosion of active democratic participation in planning. It will likely also be the case that, since the central planning board will still control the allocation of investment resources to the sectoral councils and regions, it will be able to leverage the administrative capacities now existing outside the formal state to help implement the central plans.
Reflecting the priorities established democratically, a list of the reformed central planning board’s roles might entail the following:
- Guaranteeing full employment, universal access to necessities, and a living income.
- Setting the relationship between presentand future consumption through determining the share of gdp to be allocated to investment and growth.
- Allocating investment to sectors and regions, which they in turn reallocate within their respective jurisdictions.
- Generating the revenue for its activities.
- Curbing impediments to society’s solidarity and equality goals not only across individuals/households but across workplace collectives, sectors, and regions.
- The constant development, through educational institutions and at work, of popular functional skills and democratic and cultural capacities.
- Governing the pace of decommodification through the distribution of expenditures between collective and individual consumption.
- Regulating the production-leisure trade-off by influencing the share of productivity that goes to producing more vs producing the same with fewer hours of work.
- Enforcing the stringent adherence to environmental standards, with the state ownership and pricing of resources, as well as allocation of investment, being critical here.
- Navigating the relationship with what will likely still be a predominantly capitalist global economy.28
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