[PEN-L:28070] Re: : Market Socialism

[Gar Lipow <lipowg@xxxxxxxxxxxxxx>]

phillp2@xxxxxxxxxxxxxxx wrote:

> Gar in a recent post on Market Socialism and inequality (I
> accidently erased the wrong post) made the statement that
> inequality under market socialism would be worse than under
> planning and used Jugoslavia as an example.  Unfortunately for his
> argument, this is not in accord with the facts. Income distribution
> within the republics in Jugoslavia were among the lowest in the
> world, and far lower than in the USSR or eastern European
> command economy countries.


I have searched the literature pretty thoroughly. I can't find anyone
who says this. Everyone seems to agree that income inequality increased
pretty continuously. Um there were two periods here. 153-1963 which was
self management, but not necessarily market socialism. Because the
enterprises were still dominated by party led managers, investment was
pretty much decided by central planners, and key prices were controlled.
Still it was more "market like" than the Soviet U nion.

And secondly was period of true market socialism - 1963 through early or
mid seventies. Inflation, unemployment and rising inequality seem to be
almost universally considered side effects.

(Income distribution between
> republics were high but did not increase with the adoption of
> market socialism and, depending on which statistics and years
> you use, may have declined.  There is some evidence that they
> declined during the period of market socialism and then widened in
> the subsequent period of socialist self-management.)  An
> economist at York University in Toronto (his name escapes me at
> the moment) has published a number of studies showing the very
> egalitarian wage structure within the Yugoslav republics.  There
> was also of course redistributive taxation to provide social services
> (health, education, etc.) which further reduced real (market plus
> social wages) incomes.


I need to look at this study. The reason I'm not citing any of my
sources is that none of them give numbers - just general assertions. You
are in a similar position with a source whose name you do not remember.
What we really need is some Gini coefficients for Yugoslavia, and some
of the planned economies, year by year from 1950-1975. Failing that we
need some citations from people in a position to know what they are
talking about. And, especially given the problems that followed, I'm not
sure that low gini coefficients within regions would be relevant if they
are high between regions. At least, I consider the income disparity
between Alabama and Connecticut relevant to judging the U.S.


> 	In Mondragon, originally the wage spread was limited to 3 to 1,
> though I believe it was raised to 4.5 or 6 to 1 because the co-ops
> were simply unable to hire or retain professional workers
> (engineers, scientists, etc.) at the original 3 to 1 rate operating, as
> they do, within a capitalist market system.  Obviously, this would
> be easier in a socialist market system.


Mondragon is a different case. But one thing to consider is that
Mondragon has always hired non-member managers at the top, and a certain
amount of non-member labor at the bottom. So 3 to 1 was *never* the real
income distribution. Also Mondragon took place in a very poor area. The
value per worker produced did not vary so much  - which made a fairly
egalitarian income distribution possible (though not 3 to 1). But in
addition to pressure from foreign markets, there is also the pressure of
it's own success.  That is, as some, but not all, plants produce greater
value per worker - there is a greater value disparity per worker, which
makes  egalitarianism more difficult.


> 	Incidently, a number of my Slovenian students have lamented
> the growth of inequality  and the rise in selfishness with the ending
> of socialist self-management.  There is a real nostalgia for the
> egalitarianism of their old socialist market/self-management
> system.  This is all the more interesting since many of them were
> too young to remember the old system.


But what they are lamenting is the introduction of capitalism. I never
denied that market socialism (if it implemented in a way that is truly
socialist) is preferable to capitalism. Also, because the repression in
Yugoslavia was weaker than the Soviet Union