Re: RE: capitalist versus socialist progress

[Michael Perelman <michael@xxxxxxxxxxxxxxxxx>]

Nathan, Bettleheim, some time ago, made the point that the urgency of war caused
Lenin to establish systems of control much like those of the capitalists.  I
don't want to get into a Lenin vs. Trotsky, etc. line, but I think it is
important to remember the context.

Nathan Newman wrote:

> >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