T O W A R D S A N E W S O C I A L I S M

1 towards . A NEW. socialism . W. P A U L C O C K S H O T T. AND. ALLIN COTTRELL. i About this book towards a New socialism was published in 1993 by Spokesman, Bertrand Rus- sell House, Gamble Street, Nottingham, England, and printed by the Russell Press, Nottingham. The text is copyright W. Paul Cockshott and Allin Cot- trell. This digital version was prepared by Allin Cottrell using LATEX. Besides pagination, it differs from the Spokesman printing only in respect of the correc- tion of a few typographical errors and some minor reorganisation of Tables and Figures. No attempt has been made to update the book at this point. Paul Cockshott currently works at the Turing Insti- tute of the University of Glasgow, and Allin Cottrell in the Department of Economics at Wake Forest University, North Carolina. The authors wish to thank Maria Black, Ron Buchanan and Greg Michaelson for useful discussions of the ideas in this book. Allin Cottrell also wishes to acknowledge assistance in the form of research grants from Elon College, North Carolina, and the Kerr Bequest at the University of Edinburgh.

2 Ii Contents Introduction 1. Why is social democracy inadequate? .. 2. In what sense was the USSR socialist? .. 3. What can be learnt from the failure of Soviet socialism ? .. 5. What is the theoretical basis for a new socialism ? .. 7. Synopsis of the book .. 8. 1 Inequality 11. Sources of inequality .. 11. Exploitation .. 12. Unemployment .. 15. Infirmity and old age .. 17. Women's economic subordination .. 18. Summary .. 21. 2 Eliminating Inequalities 23. Benefits of income redistribution .. 25. How much would one hour's labour produce? .. 26. Equality more effective than growth .. 28. Inequalities of labour .. 29. Differential payment for education/skill? .. 29. Specific labour shortages .. 30. Differential payment for personal qualities' ? .. 33. Skilled labour as a produced input' .. 34. Comparison with historically existing socialism .. 36. Appendix: skilled labour multiplier .. 39. 3 Work, Time and Computers 41. Economies of time .. 41. Objective social accounting .. 45. Defining labour content.

3 45. The problem of scale .. 47. The idea of complexity .. 48. Simplifying the labour value problem .. 49. High tech and intermediate tech solutions .. 50. iii iv Contents 4 Basic Concepts of Planning 53. Planning and control .. 54. Capitalist goals second order .. 56. What would be first-order goals? .. 57. Levels of planning .. 58. 5 Strategic Planning 61. Planning the industrial structure .. 61. The environment and natural resources .. 64. The time dimension of production .. 67. Market and non-market distribution .. 69. Rights of citizenship .. 69. Freedom of choice .. 69. Coping with scarcity .. 70. Costs of metering .. 70. Agriculture .. 70. 6 Detailed Planning 73. Planning in the USSR .. 78. Detail planning and stock constraints .. 80. A new plan-balancing algorithm .. 81. The harmony function .. 82. Stages of the algorithm .. 84. Economic cybernetics in Chile .. 86. 7 Macroeconomic Planning 89. Macro accounting in labour-time .. 89. Household saving and credit .. 93. Interest on savings?

4 98. Tax policy .. 99. Ground rent .. 100. Excise tax .. 101. Taxation and Accumulation .. 101. 8 The Marketing of Consumer Goods 103. Market-clearing prices .. 104. Consumer goods and the macro plan .. 105. Comparison with capitalist markets .. 108. Conclusion .. 109. conc1 .. 109. 9 Planning and Information 111. Information and property .. 111. Requirements of a statistical service .. 112. Product coding .. 112. Unified stock control .. 113. Contents v Standardised message formats .. 113. Obtaining technical coefficients .. 113. Information: social problems .. 114. Information, performance measures and incentives .. 114. Evaluating the performance of enterprises .. 115. Statistical assessment for producer goods enterprises .. 116. Against monopoly .. 117. Rewards and sanctions? .. 117. 10 Foreign Trade 121. Technology and trade patterns .. 125. Low wage and high wage economies .. 125. Advantages of trade deficits .. 127. International trade in context of socialism .. 128. State demand for foreign currency.

5 129. Alternatives to foreign exchange .. 130. Exchange rates, tourism and black markets .. 132. Policy instruments .. 135. Unsold Exports .. 136. Improved terms of trade .. 136. 11 Trade Between Socialist Countries 139. Trade and property .. 139. Less developed countries .. 140. What we advocate .. 143. Significance of national sovereignty .. 145. 12 The Commune 147. The activities of urban communes .. 148. Housing .. 148. Food preparation .. 149. Childcare .. 149. Some leisure activities .. 150. Helping senior citizens .. 150. Basic rationale in terms of efficiency .. 150. Systems of payment and external trade .. 151. Distribution of tasks .. 155. The legal status of communes .. 156. Public policy .. 156. 13 On Democracy 157. Democracy and parliamentarism .. 157. Direct democracy or soviet democracy? .. 159. Institutions of classical democracy .. 161. Democratic centralism' a dead end .. 163. Is democracy possible today? .. 163. vi Contents Democracy and planning .. 165. The acephalous state.

6 167. 14 Property Relations 171. Who owns what? .. 171. Encoding property rights .. 172. What can be owned? .. 173. Pure capitalism and mixed capitalism .. 173. The Soviet model .. 174. The enterprise as focus of contradictions .. 175. The proposed communalist model .. 177. Individual property rights .. 177. Rights of Planning and economic projects .. 178. Self-employment .. 183. Property in land .. 184. Digression on the Ricardian theory of rent .. 184. Ownership of natural resources .. 186. Separation of control from benefit .. 188. 15 Some Contrary Views Considered 189. Distribution, values and prices .. 189. Market socialism ? .. 192. Diane Elson: the socialised market? .. 192. Aganbegyan: administrative and economic methods .. 196. References 199. Introduction socialism has been tried. Seventy years after the Bolshevik revolution, history's verdict is that it has failed.' All those still inclined to call themselves socialists in the 1990s are obliged to offer some response to this widely held view.

7 This book is our response. It may be useful first, however, to distinguish our view from some responses to be found among the Left in the West. Presumably, most socialists will wish to say that the sort of social system they seek is substantially different from the Soviet model. But the grounds for this claim may be various. The first distinction to make is between social democrats and those we might call idealist marxists'. The former might argue that the failure of Soviet socialism has little to say about the future of, say, Scandinavian-style social democracy. This may be true. It so happens that the period of crisis of Soviet socialism has coincided with an onslaught on social de- mocratic ideas and institutions, particularly although not exclusively in Britain and the USA, but one might argue that this connection is, if not fortuitous then at any rate less than logically necessary: even if the crisis of the Soviet system is terminal, that is, one can imagine the political pendulum' swinging back to- wards social democracy in the West.

8 As we shall see, however, there are some grounds for doubt on this score. Idealist marxists, on the other hand, tend to claim that failure in the Eastern bloc should not count against Marxism, since the Soviet system represented the betrayal rather than the realisation of Marx- ian ideals. While the social democrats say that Soviet socialism was not the kind of socialism they wanted, these marxists say that the USSR (post-Lenin, perhaps) was not really socialist at all. Social democrats may accept that the Soviet system was indeed Marxist, and they reject Marxism; idealist marxists cling to their theory while claiming that it has not yet been put into practice. Our position is distinct from both of these views. First of all, we argue that social democracy sells short the historic aspirations of socialism ; it represents an insufficiently radical solution to the ills of modern capitalist societies. In contrast to the social democrats, we believe that there is much of value in the classical Marxian project of radical social transformation.

9 On the other hand, we reject the idealist view which seeks to preserve the purity of socialist ideals at the cost of disconnecting them from historical reality. We recognise, that is, that the Soviet-type societies were in a significant sense socialist. Of course, they did not represent the materialisation of the ideals of Marx and Engels, or even of Lenin, but then what concrete historical society was ever the incarnation of an Idea? When we use the term socialism ' as a social-scientific concept, to differentiate a 1. 2 Introduction specific form of social organisation by virtue of its specific mode of production, we must recognise that socialism is not a Utopia. It is quite unscientific to claim that because the Soviet system was not democratic, therefore it cannot have been socialist, or more generally to build whatever features of society one considers most desirable into the very definition of socialism . Our view can be summed up as follows: (1) Soviet society was indeed socialist.

10 (2) This society had many undesirable and problematic features. (3) The problems of Soviet society were in part related to the extremely dif- ficult historical circumstances in which the Bolsheviks set about trying to build socialism , but that is not all: important policy mistakes were made (just as possible in a socialist society as in capitalism), and further- more the problems of Soviet socialism in part reflect serious weaknesses in classical Marxism itself. (4) The failure of the Soviet system is therefore by no means irrelevant to Marxian socialism . We must reflect carefully on the lessons to be learned from this failure. (5) Nonetheless, unlike those who delight in proclaiming the complete historic rout of Marxism, we believe that a different type of socialism still recog- nizably Marxian, yet substantially reformulated is possible. The Soviet Union was socialist, but other forms of Marxian socialism are possible. (6) This claim can be sustained only by spelling out in much more detail than hitherto both the sorts of economic mechanisms and the forms of political constitution which socialists consider both desirable and feasible.