Global Financial Crisis 2008 – Article No 17
by Humphrey McQueen
Back to the Plan
The collapse of the Soviet Union is misrepresented as the failure of Marxism and as proof that there can be no alternative to the force of the market. The first half of that claim is wrong. The second half remains to be refuted by a real existing socialism. The crisis in capital accumulation is no reason for Marxists to swing from humiliation to hubris.
In regard to the implosion of the Centrally Planned Economies, the worst that can be held against Marx is that he did not bequeath a blueprint for building socialism. Had he and Engels attempted to do so, they would have denied the materialist foundations of their work. All socialists are utopian about where we want to go, but Marxists are supposed to be scientific about how to get there. No one can come up with effective answers to problems we have never encountered. To think otherwise is to worship the Ideal Forms of Philosophical Idealism.
Hence, Stalin’s pamphlet Economic Problems of socialism in the USSR is more useful to debates about planning than are the fifty volumes of Marx and Engels and the forty of Lenin combined.
The first five-year plan from 1928 was cobbled together in response to the chronic imbalance between rural production and urban consumption. Collectivising agriculture was an afterthought. The planners had no better guide than Marx’s account of the development of capitalism in Volume II of Capital where he tracked the interflows between Department I (production goods) and Department II (personal consumption goods). (W. W. Leontief got the fake Nobel in 1973 for turning Marx’s model into input-output tables.)
Planners did well on massive projects within Department I, such as constructing the Dniepner Dam. State planning is also fairly effective at managing scarcity through rationing. Hence, Cuba is likely to weather a global meltdown better than the US of A.
Where Centrally Planned Economies stumble is in supplying the right number of screws of the right thread to the right place at the right time. If the planners prescribe a volume of screws, they get a billion tiny ones; if they control by weight, screws arrive the size of hammers. It was no joke that one theme song of China’s Cultural Revolution was “I want to be a revolutionary screw”.
Worker control, by itself, is no answer to the problem of the millions, or the problem of intermediate goods. A meeting in a shirt factory cannot know how many tractors another factory should make to harvest cotton that wont be sown for three more years. (Capital plans through the anti-competitive device known as the firm, now the multi-divisional/multi-national corporation.)
The prospects for planning led to a technical econometric dispute in the UK during the late 1930s when F. A. von Hayek argued that no one could anticipate the needs of an expanding economy. Marxists believed that they had proved him wrong mathematically. Algebra, however, buttered no black bread.
The political fallout from the failures in socialist planning is with us as we confront systemic market failure. In the 1930s, the Left pointed to Soviet planning as the solution to mass unemployment. That promise is not going to convert anyone to socialism today. If socialists seek to replace capitalism, we have to face up to ‘the problem of the millions’.
A preliminary step thither will be to absorb the materialist precept that no human activity can be free of failure. As Engels put it: “Each victory, it is true, in the first place brings about the results we expected, but in the second and third places it has quite different, unforeseen effects which only too often cancel the first.”
Next: A Revolution is not a Dinner Party