Socialist Studies Socialist Studies

Reconstituted Socialist Party of Great Britain (1991) Socialist Education Series - Towards A Feasible Socialism.

During the 1980s, Marx's conception of Socialism was challenged by a group of academics associated with the Fabian Society. They asserted that there was no alternative to the market and the price mechanism as a basis for running an advanced system of production and distribution. They misleadingly referred to themselves as "market socialists". Market socialism is a contradiction in terms. Commodity production for profit cannot simultaneously exist with production directly for meeting human need.

The group were influenced by Alec Nove's book THE ECONOMICS OF A FEASIBLE SOCIALISM (1991). Nove was an economist who specialised on the Soviet Union (e.g. his book AN ECONOMIC HISTORY OF THE SOVIET UNION). He was also influential in Labour Party and some left wing circles.

Nove was no supporter of Western capitalism with its "...inflation, unemployment, the breakdown of social consensus, indefensible extremes in the distribution of wealth within and between countries" which he saw "promised trouble ahead" (p 49). At the same time the inefficiencies of the so-called Soviet central planning system were well known, and Nove also thought its political and social implications to be deplorable.

He described his "third way" as an attempt to construct a "feasible Socialism", somewhere between the capitalism found in the West and the totalitarianism of pre-1989 Russia. To clear the ground for a "third way", Nove had to confront Marx both on the question of planning and on what constituted Socialism. He failed on both accounts.

Nove accused Marx of failing to examine the mechanism of how Socialism would work in practice. He chided Marx for believing that:

... the planned, purposeful development of communist society would make everything clear and understandable, in contrast with the spontaneously developing market mechanism of the capitalist society... (pp. 51-52).

Marx had shown that capitalism had solved the problem of production by bringing into being techniques of production and social labour that could create conditions of abundance - that is, meet the needs of all society throughout the world.

Both Marx and Engels consistently refrained from what they regarded as a utopian exercise: the drawing up of precise and detailed blueprints "recipes for the cookshops of the future". And the Socialist Party of Great Britain agrees with them.

Socialism was to emerge from capitalism through revolution by a class-conscious working class, taking political action as Socialists. This Socialist majority would be in a position to ascertain what was and what was not possible, at the point when capitalism gives way to a system based on the common ownership and democratic control of the means of production and distribution by all of society. Socialists, at that time a majority throughout the world,-would have already seen what problems and what advantages could be enjoyed with production and distribution in common.

How could Marx, in the late 19th century be in a position to give a detailed account of the formative years of a future Socialist society, anymore than a handful of Socialists can do so in 2009?

The Rationality of Socialist Planning.

Nove's second attack is to try to show that, whereas Socialism might plan large- scale production, it was not cut out for providing small-scale production to ordinary consumers.

He agreed, for example, that a ship or a power station could be built by direct agreement with prospective users. But he then goes on to say:

...this will not be the case for, say, shoes or onions. They will not be made or grown after each user has indicated his or her desire for them. The socialist producers will therefore, to some extent, be guessing. The plan for shoes and onions cannot be known to be correct ex ante [in advance]. The same is true of Socialist restaurants. No more than their capitalist confreres can they know ex ante what the diners will ask for, or whether they will wish to dine at all. They will learn ex post [after the event] whether their preference will be for canard a l'orange or haddock and chips - though of course they can base expectations on extrapolation of past experience, as also happens today (p 44).

That argument is spurious. Nove's argument is based on a conception of capitalism with an artificial division between producers, distributors and consumers, transposed to a Socialist society.

In a Socialist society, production and distribution would be transparent because products would have lost their commodity form, and be so-many use-values that is; goods produced directly to meet people's needs. Socialism will not be saddled with the crass consumerism of capitalism with its advertising industry, and obsession for status and conspicuous consumption.

And this leads us on to the omission made by Nove. Socialism is predicated on being established world-wide by a Socialist majority. Until that majority exists there can be no Socialism and no production for meeting human need.

One of Nove's arguments was that the Soviet economy was a planned economy, and that this somehow corrupted the planning of production and distribution.

This is incorrect. For Socialists, planning is the use of resources, including both production and distribution, on the basis of decisions taken collectively and democratically by all of society. This was not the case in the command economy of pre-1989 Russia, where decisions were made by a bureaucratic elite, a minority, to the exclusion of the majority. Bureaucrats can no more "plan" commodity production than capitalists can be sure of finding buyers on the market for their commodities.

As the Socialist Party of Great Britain showed, Russia was a capitalist country, with the State taking the employing role in more privately run industries than in the West. Russian capitalism under the Bolsheviks was not an alternative to capitalism: it was capitalism. The law of value held there. The working class had to sell their labour power to a State employer and, in some cases, to private employers, for a wage or salary. Workers were exploited within the wages system. And Russian capitalism was not immune to the vagaries of the world market. More importantly, the workers did not own the means of production.

Nove's main criticism of Marx was to deride his belief that the forces of production under Socialism would create conditions of abundance. Nove agrees that abundance would remove conflict over resource allocation on the grounds that there will be enough for everyone. However, he believes that this is Utopian.

Nove offers a number of reasons to support his view. First, most of the population is poor and there is no productive capacity to raise production to allow everyone to have a decent life. Second, absolute scarcity would always exist such as finite fish reserves, and the quality of land in some parts of the world as opposed to others. And, third, he stated that the human condition had changing needs which develop and change over time, and a society that did not meet them would be uniform and dull.

The first point can easily be repudiated. Capitalism does not use the productive forces to its full capacity and does not produce in order to meet human needs. This is one of the powerful reasons for Socialism. It might take time to realign production and to extend it to meet the needs of the world's population but at least the Socialist framework would be the right one to adopt to meet this challenge. World poverty is the outcome of capitalist production for profit, not of scarcity.

And Socialists can draw upon remarks against Nove made in the BBC NEWS series, PLANET UNDER PRESSURE (24 November 2004). Alex Kirby, News Online environment correspondent, looked at the question of feeding the world. He stated that "hunger and malnutrition killed 10 million people a year, 25,000 a day - one life extinguished every five seconds". However he went on to say, significantly:

The world does produce enough to feed everyone. But the food is often in the wrong place, or unaffordable, or can't be stored long enough. So making sure everyone has enough to eat is more about politics than science.

So a potential abundance exists now, not in the lifetime of a child born today - Nove's litmus test for a feasible socialism.

Capitalism as a fetter on production

In THE COMMUNIST MANIFESTO, Marx wrote:

The productive forces at the disposal of society no longer further the development of the conditions of bourgeois property; on the contrary, they have become too powerful for these conditions, by which they are fettered

Also, in his Preface to the CONTRIBUTION OF THE CRITIQUE OF POLITICAL ECONOMY, he wrote that:

At :a certain stage of their development, the material productive forces of society come into conflict with the existing relations of production. From forms of development of the productive forces these relations turn into their fetters.

These passages call for comment. We often read about the European Union with its grain and meat mountains and its wine lake. Economists claim that this was a result of overproduction and the impression is given that overproduction takes place under capitalism. Yet this was not Marx's view. In the COMMUNIST MANIFESTO he said that one of the first tasks of Socialists after establishing Socialism was to increase production: "to increase the total of productive forces as rapidly as possible". And in Volume III of CAPITAL he wrote:

There are not too many necessities of life produced, in proportion to the existing population. Quite the reverse. Too little is produced to decently and humanely satisfy the wants of the great mass. There are not too many means of production produced to employ the able-bodied portion of the population. Quite the reverse...
On the other hand, too many means of labour and necessities of life are produced at times to permit of their serving as means for the exploitation of laborers at a certain rate of profit. Too many commodities are produced to permit of a realization and conversion into new capital of the value and surplus-value contained in them under the conditions of distribution and consumption peculiar to capitalist production, i.e., too many to permit of the consummation of this process without constantly recurring explosions..
Not too much wealth is produced. But at times too much wealth is produced in its capitalistic, self-contradictory forms
.(Ch XV, p.257-8)

In fact, capitalism does not produce enough. The only people capitalists are interested in producing for are paying customers. If millions are starving or die of hunger, this does not concern the capitalist. He only produces commodities for a profit.

So what does the capitalist mean by overproduction? In the 1980s, when there was a boom in trade, Rolls Royce had no difficulty selling cars. There was a report that the company was deliberately restricting the manufacture of this luxury car to just 8,000 a year. During the last depression, Rolls Royce could not sell its cars and laid off hundreds of workers . Did this mean that hundreds of workers and capitalists throughout the world who wanted a Rolls Royce had one?

The same argument applies to housing. For instance, in the current depression, a large housing site outside Bracknell in Berkshire was "moth-balled" and hundreds of contractors were laid off. The developer said that too many houses had been built and they could not sell the ones already completed. Did this mean that the working class had been adequately housed? Not at all. There is a tremendous unfulfilled need by workers for housing, witness the growing numbers of the homeless. What the developer meant was that they had no buying customers, willing and able to buy these houses, not that there was overproduction caused by the needs of all society being met.

Overproduction in Marx's sense means that the productive forces are not used to their full extent by the capitalist class to meet human needs and this leads to the contradiction that, despite wanting to produce for a profit, capitalists periodically curtail production, destroy capital in the form of factories and finished commodities, and lay off workers. In Britain, between 1979 and 1993, 300,000 capitalists went bankrupt and unemployment was at over 3 million for a number of years. Today, about two million workers are unemployed and this figure is expected to rise again to 3 million by the end of 2009.

And this contradiction can also be seen in war: in peace time, houses and factories are built, only to be destroyed in capitalism's wars. Capitalists are not particularly bloodthirsty, and they would rather be selling commodities and making a profit than being faced with war and disruption to trade. But capitalism - i.e. commodity production and exchange for profit - causes war because of international rivalry and protection of trade routes, competition for scarce resources, and the need to secure strategic spheres of influence. The First World War cost the capitalist class $196. 5 billion and the Second World War cost them $2,091.3 billion (www.cwc.Isu.edu - figures adjusted for 1990 dollar values). And 55 million lives were lost between 1939 and 1945 which could otherwise have been exploited to realise profits for the capitalist class (loc. cit.).

It is in the sense of Marx's understanding that capitalism is a fetter. Why does capitalism behave like this? Under capitalism production takes place for a profit. Each individual capitalist tries to sell their commodities at as high a price as possible. But they are faced by competition on the market both from capitalists at home and from abroad. Capitalists can not just do as they like. They have no control over trade depressions and they cannot meet the needs of all society.

Severe limitations are placed on the forces of production by what Marx called the 'social relations of production'. And it is these limitations which give rise to both economic crises and the class struggle. The world - divided as it is into competing capitalist nations - gives the world wars, death and destruction.

Abundance is possible

What of the insatiability of human needs? Marx noted that: "man is distinguished from all other animals by the limitless and flexible nature of his needs" (CAPITALVOLUME Volume I Appendix, Penguin edition, p 1068). The development of the productive forces involves the expansion of both human powers and human needs.

But Socialism will not be the crass consumerism of capitalism, with its obsession for designer clothes, celebrity and mindless consumption of life-styles and trivial fashion. Abundance must be associated with reasonable needs and behaviour. There are basic needs for human activity to be possible; food, clothing, shelter, heating, light, education, transport, and so on.

In a Socialist society, these goods and services would be provided freely and directly (this is not the same as Nove's concept of "zero price"). Socialism would mean production and distribution, for use not for profit, without exchange, and so without a price mechanism.

What of variations within the basic needs provided by a Socialist society? Education for science, engineering or architecture involve more resources, than mathematics which is generally the provision of a piece of paper or computer. Highly skilled labour would have to be trained, maintained and reproduced like the provision of doctors, nurses, chemists and physicists, mountain rescue teams, and so on. What of different housing styles, variation in food, and clothes design? These are needs, and would be important needs, to counter the charge of uniformity and greyness. "Man does not live by bread alone"!

The basis upon which Socialist production and distribution would take place would be one of common ownership and democratic control of the means of production by all of society. Democratic decision making of a future Socialist society would have to answer these questions

Perhaps the most important point is the one made by Marx that in Socialism labour will become one of "life's prime wants" (CRITIQUE OF THE GOTHA PROGRAMME). Among the central features of releasing and expanding the forces of production would be to minimise the necessary labour time, and to ensure human activity is as creative as possible: as Marx put it, "social production controlled by social foresight" (INAUGURAL ADDRESS OF THE INTERNATIONAL).

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