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

TOWARDS A NEW SOCIALISM

W. P A U L C O C K S H O T T AND

ALLIN COTTRELL

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About this book Towards a New Socialism was first published in 1993 by Spokesman, Bertrand Russell House, Gamble Street, Nottingham, England, and printed by the Russell Press, Nottingham. The text is copyright W. Paul Cockshott and Allin Cottrell.

Paul Cockshott (wpc@dcs.gla.ac.uk) currently works at the Turing Institute of the University of Glasgow, and Allin Cottrell (cottrell@wfu.edu) 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.

Preface to the Swedish edition

It is now ten years since most of Towards a New Socialism was written. The developments of the last decade--less dramatic than its predecessor--do not make us wish to revise the book's main thesis. We still believe that, the Soviet experience notwithstanding, an efficient, democratic socialism is both technically feasible and desirable. We stand by our attempts to sketch in some detail what such a socialism might look like, while recognizing that they are but a contribution to discussion.

In some ways, developments of the 1990s have brought our ideas closer to reality. We talk of planning the economy using a network of computers. When we first floated this idea the Internet was in its infancy; now it is a major fact of life and the technology needed to permit large scale sharing of information in real time is a commonplace. The computer speeds we took as our benchmark in assessing the feasibility of planning calculations have (predictably) been superceded many times over. In this edition we have updated some of the discussion in chapter 3 accordingly. It is not just that technological developments have been favorable to our proposals: the Internet has also spawned a sort of cooperative culture that is essentially communist, whether or not the participants would be happy to accept that description. We're thinking, for example, of the sharing of technical expertise via Usenet, and the "open source" software movement. These developments are particularly relevant for our discussion of information and incentives in chapter 9.

In other ways, our "new socialism" may seem further removed from reality today than it was in the early 1990s. A new reader asked us recently, "Do you have any suggestion about how to reach the proposal of TNS from our present situation?" Good question. That a new form of society is technically feasible, and arguably morally superior, does not mean that it will be realized. That requires, at minimum, that large numbers of people wish very much for it to be realized--that they are ready to take the risks associated with fundamental change. It is easier to imagine a widespread desire for change emerging in a context of social misery and disruption, as in times of war or economic depression. But after a rocky start the 1990s were a decade of growth, prosperity and (mostly) peace for the major capitalist countries. The Asian financial meltdown of 1997 did not have the systemic consequences some anticipated; continuing fighting in the Balkans did not drag the major nations into war. It is not surprising that few people were drawn to discussion of radical alternatives to the existing social order.

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Although it is hard to predict the timing and nature of the next crisis that could put thought of alternatives back on history's agenda, we can identify various background conditions that have motivated us, and others, to explore and promote alternatives even in "good times" for the present system. We have updated the statistical material on inequality in chapters 1 and 2: the story is essentially the same as it was a decade earlier. The prosperity of the 1990s has been shared just as unequally as that of earlier decades of growth, if not more so. And while the Club of Rome's warnings of environmental catastrophe in the 1970s may have been premature, the early twenty-first century faces global warming as a daily reality. It is difficult to see how anything other than a socially planned response could be efficacious.

Anyway, we are very grateful to Anders Axelsson for proposing a Swedish edition of Towards a New Socialism, and giving us the opportunity to update some of our points. We have the impression that the book, while it has not exactly been a best-seller, has found some thoughtful and enthusiastic readers. We hope the new edition will help recruit more such readers, and to broaden the discussion among socialists of what exactly it is that we hope to achieve.

Paul Cockshott Glasgow, Scotland, July 2000

Allin Cottrell Winston-Salem, North Carolina, July 2000

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

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 . . . . . . . . . . . . . . . . 27

Inequalities of labour . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Differential payment for education/skill? . . . . . . . . . . . . . . 28

Specific labour shortages . . . . . . . . . . . . . . . . . . . . . . . 30

Differential payment for `personal qualities' ? . . . . . . . . . . . 32

Skilled labour as a `produced input' . . . . . . . . . . . . . . . . . . . 33

Comparison with historically existing socialism . . . . . . . . . . . . . 36

Appendix: skilled labour multiplier . . . . . . . . . . . . . . . . . . . . 38

3 Work, Time and Computers

41

Economies of time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Objective social accounting . . . . . . . . . . . . . . . . . . . . . . . . 45

Defining labour content . . . . . . . . . . . . . . . . . . . . . . . . . . 45

The problem of scale . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

The idea of complexity . . . . . . . . . . . . . . . . . . . . . . . . 48

Simplifying the labour value problem . . . . . . . . . . . . . . . . 49

The Internet and labour values . . . . . . . . . . . . . . . . . . . . . . 51

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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? . . . . . . . . . . . . . . . . . . . . . . . . . 98

Tax policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98

Ground rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100

Excise tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100

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

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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 . . . . . . . . . . . . . . . . . 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

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Contents

Democracy and planning . . . . . . . . . . . . . . . . . . . . . . . . . . 165 The acephalous state . . . . . . . . . . . . . . . . . . . . . . . . . . . . 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

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