Seth Ackerman wrote a thoughtful essay in Jacobin on (as it were) the economics of feasible socialism, and Matthijs Krul offers a typically thoughtful response (at Kasama and his own blog.) Briefly put – though of course you should read them both – Ackerman holds that while the most typical criticisms of central planning are churlish and at odds with the facts, that system is still fundamentally unable to provide quality consumer goods, a problem that limited capital markets can solve in a way compatible with socialist goals; Krul charges that the problems with central planning under actually existing socialism were historically specific, while capital markets inexorably imply the rule of capital over humanity. John Quiggin also criticizes some of the more specific aspects of Ackerman’s proposal, most importantly for my purposes that the divorce of manager and proprietor is not efficient for all enterprises.
Said purposes are not to contest what no one has thus far – that economic recipes at the Comtist level of specificity are deranged, that Soviet central planning was in many ways successful, that Parecon is unfeasible and undesirable and so is the End of History. Nor are they to positively advocate for market socialism. But I don’t think that Krul’s and Quiggin’s criticisms quite succeed either, and to that end I want to employ a little utopianism, sketching out a Comtist recipe not as a program but as a proof of concept.
Suppose the following picture:
- All firms are cooperatives.
- The state owns all productive property, but does not employ any of it.
- Cooperatives have budgets to rent productive property in proportion to their membership rolls.
- Citizens cannot buy or sell their share in cooperatives, but they can move their membership around and split it between firms, and bet against each other in prediction markets (possibly slightly subsidized ones.)
- The state sets a tax on all firms at the centrally-determined investment rate and purchases production of new productive property at their expected (by prediction markets) lifetime rental value.
What does this feature? It features capital markets, certainly. It features incentives to rationalize. It features inequality based on differences in skill and the exigencies of luck. It features free entry and exit of firms to and from the market. It features a variable degree of separation between ownership and management (pace Quiggin.) It features the commodity form and law of value. You’d still get stuff like this and indeed market failures of all sorts. And you can graft on social insurance and provision of public goods in just the way actually existing capitalism does (so no need to be crippled by the fact that, as Quiggin also notes, the private sector on its own is terrible at innovating.)
But it doesn’t feature capital accumulation (of the sort relevant to Krul’s point,) and it does feature some degree of decommodification (of the sort relevant to Krul’s other point) because, like Yosarian’s war capitalism, everyone has a share.
Capital accumulation is present in the sense that society’s productive capacity continually expands, and in that high-return techniques will spread by emulation and recruitment. But it isn’t present in the sense that any individual or group (other than society as a whole) can just reinvest and reinvest and reinvest until it takes over the world with compound interest. To increase her income, a cooperant and her buddies must work harder or smarter. They may, of course, find inefficient techniques preferable if the extra income isn’t worth it. This tradeoff exists within capitalist markets too, of course, but since workers there are in a worse bargaining position and do not have managerial control over their enterprises, it shouldn’t be surprising that capitalist tradeoffs are the ones they are.
But they won’t be required to work at all – those who value leisure time can simply assign their membership to a capital-intensive firm and (after a fashion) classically exploit their cooperants. Thus a sort of guaranteed income is built into the system. Will this be enough to live off of, not considering any public social insurance that might exist? That’s contingent, though it wiould grow with time, and arguably at the planet’s current level of wealth there should be a social obligation to work. But I suspect that – given access to capital, a net to catch them, and the presumption of self-direction – most people would be able to find that their free self-development can also provide others with things they value, even if it does not provide a maximal income.
Sometimes, one hears the humanist demand that production should be carried out for use, rather than profit. I have to confess that – aside from the abolition of “profits” in the specifically capitalist sense, of course – I’m unsure what this could mean as a general dictate for a modern economy. Even in in-kind planning, individual producers will be carrying out their activities, if not for the sake of production itself, for the sake of planning targets arrived at by thoroughly abstract means. Only in small-scale communities is production carried out with use immediately in mind. Of course planners plan what they do because someone desires the goods in question. But the same applies to capitalist markets from the real world to Libertopia.
I don’t at all mean this to be an endorsement of market socialism tout court. Central planning has more historical evidence behind it than napkin blueprints like these, it has tools available to it that this doesn’t, and historically speaking “market socialism” has always (excepting perhaps the NEP) precipitated rapid revisionism. And I suspect that the innovation problems faced by AES were based more in factor availability, perhaps a subject for a future post. But I don’t think that some of the unfortunate features of capitalism mentioned by Krul are a necessary function of the commodity form or even capital markets per se.