Unpublished Letter

["D OC" <donaloc@xxxxxxxxxxxxxx>]

I was reading over a few past emails and noted a letter I submitted to the
Morning Star for publication. I guess it might be interesting - perhaps some
people would like to comment on it. Looking back, I would like to rewrite
the section analysing the failure of the SU's economic growth from the 1970s
onwards but that's another issue.

Basically, their main economist wrote an article advocating a Market
Socialist approach on the basis that Hayek's critique of Central Planning
was correct. This was an attempt to broaden the argument and to bring our
(possibly unique) experiences in terms of the 'social economy' to bear. It
certainly isn't a comprehensive account, rather a dipping of the toe into
the water...

A Éagrathóir, a chara,

I was reading Jerry Jones' article in which he encouraged a move towards
Market Socialism with common-ownership industrial cooperatives operating
within a democratised Market. With the right environmental safeguards he
feels that this would be capable of delivering a society where its citizens
are remunerated in proportion to their contribution or 'to each according to
their ability'. I'm sure he would include the extension of social security
benefits to ensure that those excluded by sickness, age could live decent,
meaningful lives. There is much of worth in this contribution and I myself
welcome the opening of this discussion on the issue.

The Hayek hypothesis rested upon a number of theories of information and
management indicating that the data required to run an centrally-planned
economy would be impossible to handle in an efficient or equitable manner
and that it was best left to the self-regulating mechanism of the free
market. One consideration which undermines this hypothesis is that
information which would seem impossible to handle in the 1930s and 1940s can
now be handled by a home PC. Work which took individuals years in the past
can now be done with the push of a button. As such, much of Hayek's central
argument is undermined.

Central planning is possible - indeed it already occurs all around us in the
Health Service, the Education system and other nationalised industries but
the argument remains whether it is possible to extend it to all large-scale
operations. That it is rejected in reality is due not to the strength of
Hayek's argument but due to the strength of the international capitalist
class. Indeed, the continued socialisation of the private sector involves
extensive central planning in the use of resources, a whole theory of
financial analysis and decision-making techniques are used on a daily basis
by management consultants and portfolio managers in order to make decisions
in regard to investments. I feel that to make the retreat to lowering our
aim to Market Socialism on this basis is unnecessary.

The issue of corruption needs to be dealt with by improving democratic
controls and popular involvement in the decision-making procedure -
something which the Soviet Union and other Eastern Bloc countries failed to
do. In effect, these are not structural difficulties but rather operational
ones which need amended management structures. Jerry indicates that he feels
it was the Centralised Planning system itself which was at fault. I can only
partially agree with him. The USSR experienced unprecedented growth rates in
its early years - in effect GDP grew on the basis of the re-investment of
surplus value from Agriculture. After the 1950s this growth rate fell,
primarily because this initial 'capacity' expansion period had came to an
end. What was needed now was the intensification of production, i.e.
increases in productivity. That this couldn't come about was due to two
factors: the inability to produce structural changes on a micro-scale
(caused by a lack of bottom-up, democratic decision-making) and the
extension of centralised control to the service sector.

As a solution, the Social Economy should be encouraged (financially
supported through initial Capital and subsequent Revenue Grants) to assume
control over large parts of the service industries - all the corner shops,
pubs, etc. That this is happening already on-the-ground in Ireland
(particularly in the Nationalist areas of the North which have had no
private sector investors over the past 30 years) needs to be understood -
this vision is being implemented and not on a small-scale either. The list
of social economy/voluntary enterprises goes further than the more usual
Voluntary Housing, Credit Union and Social Clubs and includes Gyms, Shops,
Community Festivals, Bus and Taxi Providers, Community Centres, Industrial
Estates, all levels of Educational and Vocational Training Provision,
Publishers, Craft Producers, Tourism Projects, Media Production Companies
and small-scale manufacturers. Scotland, too, has an advanced Social Economy
sector. Socialists in England need to be focussed on the issue of the Social
Economy and the need to 'ring-fence' funding allocations to areas
categorised as suffering from deprivation. Why should we be grant-aiding the
profits of private sector businesses when we could be putting a fraction of
that money into those areas which need service provision most. In addition
if proper Democratic safeguards are put in place (i.e. a requirement for
funding), this action will help to politicise and empower these communities
which will form the core of your social movement. Once it starts and is seen
to be successful in London, then Birmingham and Nottingham will want to
emulate these successes.

To complement this development, Socialists should call for state-owned
larger-scale manufacturing, with the safeguards that workers would retain
overall control over their management's composition. The proposed model
would involve the development of a mix between the social economy and
public-sector owned manufacturing sectors. That this is not allowed under EU
law simply clarifies the role of that institution and its place in the
dialectic of struggle.

However, this democratically-run economy would still fall short of that
outlined by Marx. Seen from above, this economy would remain outside the
control of man (essentially). An example of the concrete difficulties which
would arise include how resources would be better orientated towards
developing the third world within a market economy - perhaps this could be
addressed through some appropriate fiscal arrangement. Commodification of
the production process and of labour itself would remain. The model which is
suggested fails to meet the almost 'humanist' ideological edge of Marxism
and would, as a result of associated real difficulties, need to be developed
further. However, as a transitional programme, strategic goal and even
strategy for building political strength and ownership of the democratic
process, it would be useful.

Is mise,

Domhnall Ó Cobhthaigh.



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