Planning, Market & Unemployment
Source Michael Hoover
Date 02/07/12/14:04

below are several posts i sent to another list a few
years ago during 'market/planning' discussion...

Soviet central planning generally eliminated
long-term secular unemployment and short-term
cyclical unemployment associated with capitalist
business cycles from the 1920 onwards. While
elimination of mass unemployment was, in part,
the result of extensive industrial growth, Soviets
and other 'actually-existing' socialist states
provided job security that was perceived as
positive achievement and cannot be lightly
dismissed nor should it be sacrificed as a valued
goal. (my utopian self prefers a post-work society
but that's for another post). Doing away with
generalized unemployment gave working people
confidence and encouragment to develop abilities
and talents.

Of course, critics asserted that the type of security
existing in these economies, over time, undermined
work discipline and failed to provide incentives for
efficient and diligent work. And some people couldn't
find kind of employment for which they were trained
because of planning errors or geographical preferences
(Soviet's had hard time getting highly skilled folks to
go to frigid climare and barren landscape of Far North).
A bit of frictional unemployment (i.e., people changing
jobs and 'layabouts') also existed.

In the main, however, central planning eliminated
mass chronic unemployment as a social problem.
There was nothing comparable to working-class
districts in capitalist societies where jobless line
sidewalks, hanging out in summer and winter, in
good years and in bad, a constant feature of the
social landscape.

Yugoslav 'market socialism' provided for worker
participation in a decentralized economy, availibility
of Western-style consumer goods (and development
of Western-style consumerism among more affluent
social groups and economic regions; i.e., Slovenia &
Croatia, the first to 'secede'), room for small private
business and agriculture, and market-oriented price
and wages systems.

Costs of above included mass unemployment (up to
15% in 1980s, figure would have been higher except
for migration of 'guest workers' to West Germany,
Sweden, & Switzerland), chronic inflation, and foreign
debt. Unskilled working class and poor regions bore
brunt of joblessness, exacerbating already existing
inequalities among social strata and ethnic groups.

Opponents of central planning must consider that the
return of large-scale unemployment is a large price for
dropping that planning capacity of the political system.

Soviet central planning system certainly mobilized
human (and natural) resources for rapid
industrialization. Maximum investment was channeled
into heavy industry (steel, iron, coal, electric power,
machine building, and military). A kind of permanent
war-time economy, Soviet economic mobilization was
not directed to fulfiling individual consumer demands.
Central planning system paid less attention to efficiency
and technological innovation in pursuit of bulk output.
And it worked.

Between 1928 and 1975, Soviet growth rates averaged
4.7%/year, even including the devastation of WW2.
By the 1980s, Soviet oil production peaked, new labor
force entrants declined, and the environmental costs
of industrial 'gigantomania' were revealed. The old
extensive growth model had reached its outer limits.
Gorbachev leadership launched greater initiatives for
"intensification" of production methods and greater
reliance on market-type demands. This also meant
accepting inevitable trade-off of considerable
joblessness since any return to a predominantly
market-driven economy produces not just temporary
mass unemployment, but unemployment as as basic
feature of the social landscape, with all the
consequences that this brings for market societies.
(*real* point of my previous post)

I stated in my previous post that *job security was
perceived as positive achievement not to be dismissed
nor to be sacrificed*. I should have indicated that,
based on data collected from public opinion polls that
were introduced, this was the view of the overwhelming
percentage of working people in the Soviet Union in the
1980s. I spent some time with Soviet sociologists
engaged in this work back then and they were very clear:
professional/managerial types were more supportve of
'reforms' than was working class.

Despite acknowledged poor quality of consumerable
durables compared to capitalist West, most working
people expressed relative satisfaction in these polls.
Professional/managerial stratum expressed greatest
dissatisfaction, as did younger folks who increasingly
knew about and longed for Western consumer lifestyle.
Perestroika initiatives neither sufficiently redressed
exhaustion of 'extensive growth' model nor satisfied
new consumer demands. In fact, such policies resulted
in growing criticism and dismissal of planning system
and increasing calls for marketization and privatization.

I should have also indicated that 'frictional' unemployment
in the Soviet Union was less than 1% until 1980s.

In any event, the Soviet system mitigated against
opportunities for productive work allowing for
individual initiative, personal satisfaction, and
development of both mental and physical abilities.
So yes, data collected by Soviet sociologists I
mentioned in another post indicated that workers
opposed threats to job security and they were
alienated from the work process. Contrary to Soviet
theorists, work in the USSR did not cease to be a
source of alienation despite elimination of the
bourgeoisie. Marx, in addition to citing capitalist
exploitation, pinpointed the character of the work
process and absence of opporunity for worker
creativity and autonomy as sources of alienation.
Assembly line work and unskilled manual labor in
general was just as tedious and uninteresting in
Soviet factories as in capitalist West.

Of course, mass of people in former Soviet Union
now experience alienation and job insecurity

Planning is obviously different from metaphysical 'plan.'
Capitalism is planned, which neither contradicts Marx
& Engels with respect to 'anarchy of capitalist
production' nor obviates the condition that M called
'production without regard to the limits of the market.'

Capitalists command (term used by bourgeois
economists to describe Soviet-style central planning)
factors of production, meaning that they decide how
to employ land (natural resources), labor (humans),
and capital (goods used to produce other goods -
capitalism because capital in its money form is used
to produce more money?). Of course, bourgeois
economists further the mystification and mythification
of all this by calling capitalists 'entrepreneurs.'

If so-called marxists/socialists do not think that
conscious planning of publicly owned and socially
controlled means of production will improve upon
capitalism's clumsy and costly privatized way of
governing and correcting balance of production
between main and subsidiary sectors of economy,
then we may as well give up and become left
Keynesians (or maybe pomo leftists, abandoning
political economy and its critique).

Why go on about the failure of planning in Soviet
Union given the circumstances in which it was
attempted? And if comparative analysis 'is to be
done,' the appropriate comparison (if any exists) is
between 'actually existing' capitalism during
industrialization and 'actually existing' socialism
during industrialization (i.e., US between 1870s
and 1920s & USSR between 1920s and 1970s, fifty
year periods (long waves?) after which both
experienced generalized crisis).

Planning isn't a panacea. Nor are worker control
and worker democracy. But such decisionmaking
seems the only humane way to deal with matters
that capitalist decisionmaking and planning can
neither address nor even adequately recognize. And
such planning doesn't have to preclude using markets
and market techniques although 'the market' (note
metaphysical similarity to "the plan") would not be
the governing factor. The crucial issue for
marxists/socialists should be how to move away from
*market regulation* of economic relations. Misgivings
about Bertell Ollman's utopianism notwithstanding, he
points out the alienation of market social life and its
rule by 'violence of things.'

Interestingly, Marx's critique of market economics
in _Poverty of Philosophy_ is outlined in a polemic
against Proudhon's 'market socialism.' I've
commented several times on this list (including post
that initiated thread under this header) about the
'high price in unemployment, among other things,
of Yugoslav market socialism. And David
Schweickart's invocations of China's marketization
ring increasingly hollow in light of mass layoffs,
rural depopulation, and rising discontent (strikes and food

While *I* wouldn't want areas such as housing,
transportation, and education to be subject to
market forces, *decommodification* of labor-power
holds the key to transcending 'the market' and
assuring social access to the means of life. But I
guess these decisions would be the responsibility
of mass, comprehensive, democratic planning.

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