RE: capitalist versus socialist progress

["Nathan Newman" <nathan.newman@xxxxxxxx>]

>On Behalf Of Louis Proyect
> These achievements were so remarkable that even Western
> economists began to
> speak of the "North Korean Miracle." In fact, according to the economist
> Joan Robinson, writing in 1965, "All economic miracles of the
> postwar world are put in the shade by these achievements."

If true, and likely so in light of impressive state mobilization of the
economy in Russia and other countries, the question becomes whether state
planning is effective in mobilizing labor and capital when raw quantitative
production is needed, but has serious deficiencies that ultimately become
fatal when qualitative gains are needed and innovation is at a premium.  The
argument is that planning can easily monitor quantity of production, so its
greater efficiency in mobilizing resources wins out.  For early stages of
development (to put aside critiques of that model for a second), such
quantiative gains are at a premium, so planning can rapidly outdistance more
market-oriented regimes.  But the argument is that the market is a better
monitor of quality,  so state planning (at least of the Stalinist variety)
ultimately fails when quality rather than quantity is the decisive issue of
production - increasingly true at later stages of development.

Questions raised are whether there are ways to better encorporate such
qualitative measures into state planning.  I would argue that without
democracy as an alternative "feedback" loop to the market, undemocratic
state planning must by nature ultimately fail.  In that sense, democracy is
not a human rights issue but a core concern of socialists.  It if frankly
easier to envision a successful undemocratic market system in a developed
country than to see a way for a planned socialist system to succeed with
neither a market nor a democratic monitor of quality by the citizenry.

For socialists, it also raises good issues for where planning makes sense
and where market mechanisms should be harnessed.  The waste of markets makes
little sense in areas where quality makes little different (raw commodity
production, many utilites in many cases) or where quality is unlikely to be
accurately judged by the population in markets (health care is the obvious
example), but should include market mechanisms where quality is a large part
of product differentiation.  Advanced electronic goods are an example of the
latter case.

None of this addresses the issue of how best to allocate capital - whether
through planning or through private capital sources. However, if the best
monitors of quality and production were assured (planned or market), then
social capital could easily follow the best production units as evidenced by
success.  The arguments for private capital control are relatively weak,
usually piggy-backing on the success of markets as monitors.

Now, there are both left socialists and conservative free marketeers who
argue that goods markets and private capital control are irresistably
intertwined, but for those who see tensions but nothing oxymoronic in market
socialism, it seems like many of the failures of the later stages of Soviet
and other Stalinist planning systems could have been addressed through an
expansion of both democratic and market processes without sacrificing social
control of capital sources.

-- Nathan Newman