United Airlines and market socialism
Source Louis Proyect
Date 02/12/11/12:10 wrote:
> "Throw out all the plans and kick the people in the ass so that we might
> live to see another day" was Mr. Stalin's program of industrial
> development. Was this the wrong program for the times?

Of course it was wrong. Socialism has to be based on science. When you
throw statisticians and engineers into prisons, you undercut the ability
of a workers state to defend itself. Everytime an ostensibly
revolutionary government takes this route, from the USSR in the 1930s to
Mao's Cultural Revolution, the result has been devastating.

> The problem is the law of value. The law of value states that
> commodities - products, must in the last instance, exchange for
> equivalents amount of human labor, no matter what their price, or you
> are courting rebellion of the popular masses.

I am not sure what point you are trying to make. The law of value was
only partially in effect in the USSR. Here is how Che Guevara approached
these questions:


Che Guevara had some of the most interesting insights into the problems
of socialist construction since the days of Lenin. He is better known as
a guerrilla fighter, but his essays on planning and other economic
matters deserve to be better known.

The main importance of Guevara is that he provides an alternative to the
false dichotomy set up between Stalinist "planning" and the implicitly
capitalist logic of "market socialism". During our fierce debate over
"market socialism" on the Marxism list, any number of Guevara's
statements could have been brought to bear on the discussion.

Guevara was a stickler for accounting and controls, as was Lenin. At a
speech given to a ceremony to winners of socialist emulation awards in
the Ministry of Industry in October of 1965, he described the importance
of controls:

"Rigorous controls are needed throughout the entire organizational
process. These controls begin at the base, in the production unit. They
require statistics that one can feel confident are exact, as well as
good habits in using statistical data. It's necessary to know how to use
statistics. These are not just cold figures--although that's what they
are for the majority of administrators today, with the exception of
output figures. On the contrary, these figures must contain within them
an entire series of secrets that must be unveiled. Learning to interpret
these secrets is the task of the day.

Controls should also be applied to everything related to inventories in
a unit or enterprise: the quantity on hand of raw materials, or, let's
say, of spare parts or finished goods. All this should be accounted for
precisely and kept up to date. This kind of accounting must never be
allowed to slip. It is the sole guarantee that we can carry on work with
minimal chance of interruption, depending on the distance our supplies
have to travel.

To conduct inventory on a scientific basis, we also have to keep track
of the stock of basic means of production. For example, we must take
inventory of all the machinery a factory possesses, so that this too can
be managed centrally. This would give a clear idea of a machine's
depreciation--that is, the period of time over which it will wear out,
the moment at which it should be replaced. We will also find out if a
piece of machinery is being underutilized and should be moved to some
other place.

We have to make an increasingly detailed analysis of costs, so that we
will be able to take advantage of the last particle of human labor that
is being wasted. Socialism is the rational allocation of human labor.

You can't manage the economy if you can't analyze it, and you can't
analyze it if there is no accurate data. And there is no accurate data,
without a statistical system with people accustomed to collecting data
and transforming it into numbers."

Guevara had confidence that socialism could be built if the proper
resources and management were allocated to the task. He believed in
technology and progress. Like Lenin, he admired many of the accounting
and management breakthroughs found in the advanced capitalist countries.

Lenin was preoccupied with these matters immediately after the birth of
the new Soviet state and minced no words about the value of strict
accounting controls. In the "Immediate Tasks of the Soviet Government"
written in the spring of 1918, Lenin said:

"The state, which for centuries has been an organ for oppression and
robbery of the people, has left us with a legacy of the people's supreme
hatred and suspicion of everything that is connected with the state. It
is very difficult to overcome this, and only a Soviet government can do
it. Even a Soviet government, however, will require plenty of time and
enormous perseverance to accomplish it. This 'legacy' is especially
apparent in the problem of accounting and control--the fundamental
problem facing the socialist revolution on the morrow of the overthrow
of the bourgeoisie. A certain amount of time will inevitably pass before
the people, who feel free for the first time now that the landowners and
the bourgeoisie have been overthrown, will understand--not from books,
but from their own, Soviet experience--will understand and feel that
without comprehensive state accounting and control of the production and
distribution of goods, the power of the working people, the freedom of
the working people, cannot be maintained, and that a return to the yoke
of capitalism is inevitable."

Those with a superficial understanding of Soviet economic history might
assume that the link between Lenin and Guevara is Stalin. The popular
notion we have of Stalin surrounded by technocrats planning out every
last detail of each five year plan to the last turbine in the last
electrical generating plant is nothing but a myth. Stalin was opposed to
planning, accounting and controls.

Stalin chose arbitrary target-dates for big projects and demanded their
completion on schedule. His main interest was getting the job done, no
matter how slipshod the results. Every plan submitted to him was speeded
up. The professionals who prepared the plans were appalled. Eventually
Molotov got rid of these professionals and replaced them with yes-men.

The unplanned character of the Soviet economy forced continuous
compensations and administrative controls. If a construction crew would
not work twelve hours a day to complete a road, then additional foremen
and cops were necessary to control them. As more and more bottlenecks
appeared, more and more "interventions" were required to keep the whole
ungainly machine going. Thus a command economy built on a centralized
pyramid model grew up in the 1930s. This had nothing to do with Lenin's
original intent.

When the Cuban revolution was in its infancy, economists in the Soviet
bloc were grappling with the aftermath of Stalin's command economy.
Their tendency was propose that markets be introduced in order to make
these top-heavy economies more efficient. They thought that the market
could make better investment decisions than a bureaucrat.

In many cases, the market socialists took inspiration from the NEP of
the early 1920s. Wlodzimiers Brus, a Polish economist, wrote the following:

"The adoption of the New Economic Policy partially changed the situation
among theoreticians. It became necessary to work out theoretically the
function of the forms of market relations between city and countryside,
along with the consequences stemming from the resurgence of the
commodity-monetary economy in the socialist sector itself (economic
accounting). Analysis of the market and of the conclusions for planning
was to occupy an important place in both economic policy and theoretical
discussions. The question of money was taken up.

The first signs began to appear at the time of a change in opinion among
Marxist economists on the relationship between the plan and the market.
For some, the idea that the market and commodity-money forms were the
opposite of planning began to be transformed into the conception of the
market as a mechanism under the plan."

Guevara resisted the temptation to adopt NEP-like mechanisms. He saw the
consequences of market reforms in Eastern Europe in the mid- 1960s and
understood their underlying capitalist logic. On a trip to Yugoslavia in
1959, he characterized the situation as one in which, "In broad strokes,
with an element of caricature, you could describe Yugoslav society as
managerial capitalism with socialist distribution of the profits." The
model for Cuba would not be the NEP or current- day Yugoslavia or
Poland, but the original vision Lenin had for the Soviet Union: planning
within the context of a socialist and egalitarian society.

Guevara laid out his main ideas on socialist construction in a so-called
"budgetary finance system." According to Carlos Tablada, author of "Che
Guevara: Economics and Politics in the Transition to Socialism", Cuba
would draw upon the following measures to make a planned economy work:

--advanced accounting techniques that permitted a better system of
controls and an efficient, centralized management; as well as studies
and practical application of methods of centralization and
decentralization by the monopoly corporations;

--computer technology applied to the economy and management, and the
application of mathematical methods to the economy;

--techniques of programming production and production controls;

--use of budgetary techniques as an instrument of financial planning and

--techniques of economic controls through administrative means;

--the experience of the socialist countries.

Che summed up the spirit of the system as follows:

"We propose a centralized system of economic management based on
rigorous supervision within the enterprises, and, at the same time,
conscious supervision by their directors. We view the entire economy as
one big enterprise. In the framework of building socialism, our aim is
to establish collaboration between all the participants as members of
one big enterprise, instead of treating each other like little wolves."

If accounting and controls was all there was to Guevara's concept of
socialism, we would be unimpressed. After all, isn't what the United
States and other advanced capitalist countries going through today
nothing but an exercise in bottom-line mentality. Wouldn't Guevara's
seeming obsession with efficiency and control crush the human spirit? At
the same time he was writing articles on the necessity to introduce
technology into the Cuban economy, students at Berkeley University, many
of whom were sympathetic to the Cuban revolution, were demanding not to
be "mutilated, folded or spindled." The mid-1960s were a period when
large-scale computing had begun to be felt everywhere, including the
liberal arts universities.

Key to understanding the relationship between the overall goal of
efficiency and the importance of putting people first can be found in
Guevara's approach to the Marxist category of value. It would be value
that would mediate between society and the economy.

Simply put, Guevara believed that the law of value operates as a "blind,
spontaneous force" under capitalism. Socialism, on the other hand, would
allow conscious action upon the law of value in accordance with an
understanding of the greater needs of society. In his Manual of
Political Economy, Guevara spells out the way the socialist state can
make use of the law of value.

"We consider the law of value to be partially operative because remnants
of the commodity society still exist. This is also reflected in the type
of exchange that takes place between the state as supplier and as the
consumer. We believe that particularly in a society such as ours, with a
highly developed foreign trade, the law of value on an international
scale must be recognized as a fact governing commercial transactions,
even within the socialist camp. We recognize the need for this trade to
assume a higher form in countries of the new society, to prevent a
widening of the differences between the developed and the more backward
countries as a result of the exchange. In other words, it is necessary
to develop terms of trade that permit the financing of industrial
developments even if it contravenes the price systems prevailing in the
capitalist world market. This would allow the entire socialist camp to
progress more evenly, which would naturally have the effect of smoothing
off the rough edges and of unifying the spirit of proletarian

"We reject the possibility of consciously using the law of value in the
absence of a free market that automatically expresses the contradiction
between producers and consumers. We reject the existence of the
commodity category in relations among state enterprises. We consider all
such establishments to be part of the single large enterprise that is
the state (although in practice this has not yet happened in our
country). The law of value and the plan are two terms linked by a
contradiction and its resolution. We can therefore state that
centralized planning is the mode of existence of socialist society, its
defining characteristic, and the point at which man's consciousness is
finally able to synthesize and direct the economy toward its goal--the
full liberation of the human being in the framework of communist society."


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