Open Polemic has provided a valuable service to the movement by creating a forum in which the basic questions underlying the crisis in the socialist movement can be thrashed out.
One of the most striking features of this crisis is that we no longer know what we stand for. We know what we are against, but not what we are fighting for. If you listen to left polemic you hear a roaring portentous silence when it comes to socialism. It seems we no longer dare to define it.
I have taken the liberty of submitting a list of theses, which, starting with a diagnosis of the crisis, lead on to, perhaps controversial, programmatic conclusions.
Thesis 2 The collapse of previously existing socialism is due to identifiable causes embedded in its economic mechanism, but which are not inherent in all possible socialisms.
Thesis 3 The political failures of the left in this situation stem from the lack of a programmatic conception of how a socialist economy should be operated.
Thesis 4 Marxist economic theory, in conjunction with information technology provide the basis on which a viable socialist economic program can be advanced.
Thesis 5 The communist movement has never developed a correct constitutional program. In particular it has accepted the misconception that elections are a democratic form.
Thesis 6 The content of a communist program should differ radically from what the British Left presently proposes.
The crisis of world socialism is due primarily to economic failure.Bourgeois opinion is unanimous on this but it is not universally accepted on the left. An alternative view is that the crisis was primarily political. According to the latter conception it was basically the lack of democracy combined with a corrupt and exploiting bureaucracy that brought about the system's failure.
In asserting the primacy of economics I am not denying the existence of a corrupt bureaucracy, a new bourgeois class wishing to establish capitalism or conjunctural features like the rise of Gorbachov. I am asserting that these only became critical once the system had failed economically.
Proposition 1 Political corruption or oppression will not cause a thriving economic system to be overthrown.
Whilst an economic system is still capable of rapidly developing the forces of production it can tolerate a very high level of political oppression without the economic system itself being destabilised.
As an example of this consider the Stalin period in the USSR and Eastern Europe. Then, the bourgeoisie and petty bourgeoisie were cruelly suppressed. But, contrary to what one might expect, this repression did not discredit the system politically at the time. On the contrary the Communist Parties in general and Stalin personally were at the height of their popularity when at their most ruthless. The intelligentsia whose offspring are now so hostile to communism, responded at the time by prostrating themselves before the Communist Parties and participated with every apparent enthusiasm in socialist construction. Mere trepidation could not explain such abnegation; its underlying reason was the outstanding rates of economic growth produced by stalinism.
An organisation that is powerful and economically successful provokes not only fear but respect.
One can see this phenomenon, inverted and reduced in form, in that supine fear tinged with admiration which Thatcher induced in sections of our left intelligentsia. If we look to the east we see more substantial capitalist success stories, like Taiwan and South Korea, which have combined stark authoritarianism, cronyism and corruption with rapid economic growth.
When such an economically successful dictatorship `loosens up', what happens is a political liberalisation that leaves the economic foundations intact. The USSR under Kruschov or recent events in Korea are evidence of this. It is only if political liberalisation occurs in conditions of economic failure, that the crisis grows out of control to economic revolution. Proposition 2 Political repression persisted because of economic weakness.
The official justification for the Berlin wall was that it was an anti-fascist defence wall.
There was an element of truth in this, as the immediate influx of Nazi organisations which took place into the former DDR as soon as the wall came down showed. But as everybody knows, the wall also functioned to stop emigration to the BRD. The more fundamental question is: why was it the DDR rather than the BRD that had to build a wall?
Historically the answer is clear: it happened because it was the DDR that was losing population to the West. Although its fugitives might cite love of liberty as motive, liberty must it seems, be gilded to be loved. Whatever political gloss was given it, money was what was at stake. India has been `free and democratic' since the start of the cold war, but for some reason Soviet and East European citizens have not clamored for the right to emigrate there.
To return to Central Europe; in the 50's both German republics were actively suppressing their political enemies. The Communist Party was outlawed in the BRD as a threat to the state, just as actively pro- capitalist parties were in the DDR. But by the '70s the rulers in the West were confident enough to legalize the CP whilst the East remained a besieged fortress. The differences in politics flowed from relative economic performances.
Had the economy of the DDR been forging ahead of the BRD, then people would have been jumping the wall in the other direction. It would, in the end, have been the East Berlin government that was imposing unification terms on the West.
The collapse of previously existing socialism is due to identifiable causes embedded in its economic mechanism, but which are not inherent in all possible socialisms.I will examine some of the well known contradictions within the economics of previously existing socialism. The argument that these are not inherent in any socialism will be advanced in section 4. Elaboration 1 The mechanism for the extraction of a surplus product progressively collapsed resulting in inadequate investment.
Marxist economics views the method of extracting a surplus product as being the distinguishing feature of a mode of production.
The specific economic form, in which unpaid surplus labour is pumped out of the direct producers determines the relationship of rulers and ruled, as it grows directly out of production itself and, in turn, reacts upon it as a determining element. Upon this, however, is founded the entire formation of the economic community which grows up out of the production relations themselves, thereby simultaneously its specific political form. It is always the direct relationship of the owners of the conditions of production to the direct producers - a relation naturally corresponding to a definite stage in the development of the methods of labour and thereby its social productivity, - which reveals the innermost secret, the hidden basis of the entire social structure, and with it the political form of the relation of sovereignty and dependence, in short, the corresponding specific form of state. See ,p 791In a socialist economy the extraction of a surplus product takes place by means of a politically determined division of the material product between consumer goods and other products in the state plan. This is socialism's `` innermost secret, the hidden basis of the entire social structure ''.
Its system of extracting a surplus is quite different from under capitalism in the following respects:
This innermost secret determines the relationship of rulers and ruled as follows; consider two possibilities, either the rulers and the ruled are distinct groups, or they are one and the same.
If, as in hitherto exisiting socialism, they are distinct, then whoever controls the planning authority is both the effective owner of the means of production, and a ruler. These rulers (in practice have the central committee of the communist party), though often venal, can not fulfill their social function by the shameless bourgeois pursuit of self interest. They are compelled instead, to take on the highly social and public role, of so organising the political and ideological life of the society, as to ensure compliance with the plan. One of the most effective ways of doing this is through the cult of a charismatic leader, backed to a greater or lesser extent by state terror.
Personality cults, in which the leader is presented as the General Will incarnate are no accident, but an efficient adaptation to the contradictory demands of a socialist mode of production ( which dictates the dominance of political over civil society), combined with institutions of representative government.
Some readers may protest at this point: it is bad enough that I unblushingly characterize the Leninist system as socialist, but how can I say that it had a representative government?
Representative government selects certain humans, commonly called politicians, to stand in for, or represent, others in the process of political decision making. This is just what the Leninist party does in power. It acts as a representative of the working class and takes political decisions on its behalf. As such it is no less representative a form of government than parliamentary government, there are differences over who is represented and how they are represented, but the representative principle remains the same: decisions are not taken by those affected but are monopolized by a group of professional rulers, whose edicts are legitimated in terms of some representative function. Selection of such rulers by multiple party elections can not diminish their representative character nor abolish the distinction between rulers and ruled.
The contradictory character of socialist representative government is banally evident. The representatives of the proletariat, through their control of the plan, and thus the method by which unpaid surplus labour is pumped out of the direct producers, become effective controllers, pro tem, of the means of production. As such their individual class position is transformed and their ability to go on representing the proletariat, compromised.
Only if the distinction between ruler and ruled is abolished, when the masses themselves decide all major questions through institutions of participatory democracy does the totalitarian inner secret at the heart of socialism cease to be contradictory. Only when the masses in referenda decide the disposition of their collective social labour : how much is to go on defence, how much on health, how much on consumer goods etc, can the political life of socialism cease to be a fraud. But to return to the question of surplus extraction. Under socialism this is an inherently totalitarian process, a subordination of the parts to the whole, the factory to the plan, the individual to the collective. Production is not for private gain but for the totality of society. Under a system of participatory democracy, this totalitarian conformism might take on a Swiss democratic rather than German fascist air, but it would be no less real.
Gorbachov undermined the whole surplus extraction process by attacking the totalitarian principle. One of his first measures was to allow factories to retain the greater part of their profit. At a stroke, he introduced an antagonistic bourgeois principle of surplus extraction: the pursuit of profit by individual enterprises. He threw the whole system into chaos.
The government, deprived of its main form of revenue, resorted to the printing press. The result was hyperinflation.
The factories had extra money, but, since the division of the social product was still determined by the plan, could not act as private firms would and convert this new money into productive capital. The socialist system of surplus extraction was sabotaged without a bourgeois one to replace it, and the economy spiraled into an inflationary decline.
Elaboration 2 Previously existing socialism was limited by a deficient system of economic calculation.
This point is made by all right wing critics. They point out, with justification, that the price system operating in the USSR made rational economic calculation impossible. Numerous anecdotes tell of this:
Here is one of many examples. Some time ago it was decided to adjust the prices of cotton and grain in the interests of cotton growing, to establish more accurate prices for grain sold to the cotton growers, and to raise the prices of cotton delivered to the state. Our business executives and planners submitted a proposal on this score which could not but astound members of the Central Committee, since it suggested fixing the price of a ton of grain at practically the same level as a ton of cotton, and, moreover, the price of a ton of grain was taken as equivalent to that of a ton of baked bread. In reply to the remarks of the members of the Central Committee that the price of a ton of bread must be much higher than that of a ton of grain, because of the additional expense of milling and baking, and that cotton was generally much dearer than grain was also borne out by their prices in the world market, the authors of the proposal could find nothing coherent to say.So wrote Stalin in April 1952 , but some 40 years later, pricing policy had improved so little that Gorbachov could cite the example of pigs being fed bread by collective farmers, because the price of bread was lower than that of grain.
When the relative prices of things differs systematically from their relative costs of production, it becomes impossible for people to chose cost effective methods of production. This produces a general decline in economic efficiency. Elaboration 3 Unlike capitalism, previously existing socialism lacked an inbuilt mechanism to economise on the use of labour, and thus to raise its productivity.
The fundamental economic justification of any new production technology has to be its ability to produce things with less effort than before. Only by the constant application of such inventions throughout the economy can we gain more free time to devote either to leisure or to the satisfaction of new and more sophisticated tastes. This implies that in socialist production workers must seek always to economise on time. Time is, as Adam Smith said, our original currency by which we purchase from nature all our wants and necessities, a moment of it needlessly squandered is lost for ever. A socialist system will only be historically superior to capitalism if it proves better at husbanding time.
The wealth of capitalist societies is of course unevenly divided, but its inbuilt tendency to advance the productivity of labour underpins the continuing progressive role of capitalist economic relations. Had capitalism lost this potential, as some Marxists believed in the 1930's then it would long ago have lost out in competition with the Soviet block.
In a capitalist economy, manufacturers are driven by the desire for profit to try to minimise costs. These costs include wages. Firms often introduce new technology in order to cut the workforce and reduce labour costs. Although this use of technology is frequently against the direct interest of workers, who loose their jobs, it is to the ultimate benefit of society. For it is through these economies in labour that the living standards of the society is raised. The benefits of technical change are unevenly spread, the employer stands to gain more than the employee, but in the end, it is upon its ability to foster technological improvements that capitalism's claim to be a progressive system is based. The need to accept new labour saving technology is generally recognised within the Trades Unions, who seek only to regulate the terms of its introduction so that their members share in the gains.
It is a very naive form of socialism that criticises technical change under the pretext that it causes unemployment. The real criticism that can be levied at capitalist economies in this regard is that they are too slow to adopt labour saving devices because labour is artificially cheap.
A good example of this could be seen in the computer industry. In the 1950s IBM developed highly automated machinery to construct the core memories for their computers. As demand grew their factories became more and more automatic. In 1965 they even had to open an entire new production line just to make the machines that would make the computers. Still they could not keep up with demand.
The situation was becoming desperate. Then a newly appointed manger at Kingston who had spent several years in Japan, proposed that workers in the Orient could be found with sufficient manual dexterity and patience to wire core planes by hand. Taking bags of cores, rolls of wire, and core frames to Japan, he returned ten days later with hand wired core planes as good as those that had been wired by automatic wire feeders at the Kingston plant. It was slow and tedious work but the cost of labor in the Orient was so low that production costs were actually lower than with full automation in Kingston. See , p209But in this respect the USSR was even worse.
The USSR subsidised food, rent, children's clothes and other necessities. The subsidy on basic goods compensated for low money wages. But subsidies, and social services had to be paid for out of the profits of nationalised industries (which formerly met most of the Soviet budget). For these to make a profit, wages had to be kept low, and low wages meant that the subsidies had to be retained!
The worst aspect of all this was that enterprises were encouraged by the cheapness of labour to be profligate with it. Why introduce modern automated machinery if labour was so cheap? Besides, it created work and prevented unemployment: real voodoo economics. True enough, any socialism worthy of the name must prevent unemployment, but that is not the same as creating unnecessary work. Its better to automate as fast as possible whilst reducing the working week.
Elaboration 4 Nationalised ownership of industry held back international economic cooperation in comparison to the capitalist world.
Modern capitalist industry is dominated by big multinational firms. Only these have the resources and size of market to reap economies of scale and meet the heavy research costs demanded by competition. The nationalised enterprises of Eastern Europe and to a lesser extent the USSR were just too small to gain such benefits.
The political failures of the left in this situation stem from the lack of a programmatic conception of how a socialist economy should be operated.The bourgeoisie internationally entered the current crisis of socialism with a well developed critique of the failings of the socialist economies. Alongside this critique went a program of economic measures to solve the crisis. Political leaders in the socialist block were at first unwilling to recognise that the societies that they controlled were fundamentally sick. Those most ready to point this out, both East and West were the intellectual and political right. They saw the chance to seize power and impose their own cure on the patient. By the time modernizing wings arose in the Communist and Social Democratic movement, their modernism consisted of little more than the adoption of some vulgarized form of right wing neoclassical economics. As Keynes said back in 1935
.. the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.So Gorbachov in his great role and Gould in his lesser one echo pro-market economists like Libermann, Sik, Nove and ultimately Von Mises. The radical movements of the '60s and '70s, whether workers and students in the West or red guards in the East were too far from real centers of power and to diffuse in their aims to pose a practical alternative.
Marxist economic theory, in conjunction with information technology provide the basis on which a viable socialist economic program can be advanced.This is obviously a complex case to make out, and I can only give a few key points here. Proposition 3 Using modern computers it is possible to efficiently plan an economy in terms of natural units without recourse to the intermediary of money or markets.
Bourgeois writers such as Nove  have argued that the vast number of different products in a modern industrial economy (perhaps 10 million) makes detailed planning impossible. Planners, he asserts, are forced to work in terms of aggregates. They can only specify general targets like 'we need 500 million screws', but they fail to say how many 5mm screws, 10mm screws etc, are needed. As a result the wrong mix of screws gets produced.
This assertion is false. The technical mathematics of the argument is complex, but Allin Cottrell and I have demonstrated ,  that modern supercomputers are capable of solving the millions of equations the equations necessary for a complete plan in a matter of minutes.
What would have been an impossibly complex problem to solve by the old bureaucratic means, has become an eminently practical proposition using modern information technology. Such a computerised planning system could respond to events far faster than any market could hope to do, thus undermining the main objection raised by bourgeois economists as to the unwieldy nature of socialist planning. Proposition 4 Socialism requires the abolition of money and its replacement by a system of remuneration based on labour time. This is the key to promoting both equity and technological advance.
It is clear both from a reading of Marx's own work, and from the whole tenor of 19th century socialism, that it was a common assumption that socialism would involve the abolition of money and the introduction of a system of payment based on labour vouchers.
..., the individual producer receives back from society - after the deductions have been made - exactly what he gives to it. What he has given to it is his individual quantum of labour. For example, the social working day consists of the sum of the individual hours of work; the individual labour time of the individual producer is the part of the social working day contributed by him, his share in it. He receives a certificate from society that he has furnished such and such a an amount of labour ( after deducting his labour for the common funds), and with this certificate he draws from the social stock of consumption as much as the same amount of labour costs. The same amount of labour which he has given to society in one form he receives back in another. See Marx qualified this as being only a first step towards greater equality, but it is far more radically egalitarian than anything achieved by hitherto existing socialism. The principle of payment in labour time recognizes only two sources of inequality in income: that some people may work longer than others, or, in a piece work system, some may work faster. It eliminates all other income inequalities based upon class, race, sex, grade or professional qualification.
Also, by forcing workplaces to pay workers the the full value created by their labour, it eliminates the squandering of labour brought about by low pay, and encourages the introduction of labour saving innovation. It provides, moreover, a rational and scientifically well founded basis for economic calculation. If goods are labelled with the labour required to make them, the arbitrary and irrational character of the old Soviet price system is avoided.
Proposition 5 Consumer goods prices should be set at market clearing levels and the discrepancies between these prices and the values of goods used to determine the optimal levels of production.
Given that supplies of and demand for goods is never exactly equal, it is only average prices that should equal labour values. Individual items in short supply would sell at a premium, balanced by those in oversupply selling at a discount. These premiums and discounts can them guide the planning authorities to decide which goods to produce more of, and which to produce less off.
Note that this does not in anyway presuppose the existence of private trade.
Proposition 6 The funding of the surplus product should come from taxes on income, approved by referendum.
In any society a certain proportion of the social product must be set aside for investment and to support those unable to work etc. In a socialism based on labour values, this would be expressed as a deduction of so many hours work a week that had to be performed for the community. If the phrase had not been purloined, one might call it the community charge.
In the countries of hitherto existing socialism the decision as to how the social working day was to be divided between necessary and surplus labour time was taken by the government. As, over time, the government became alienated from the working classes, the process became exploitative. The state as an alien power was depriving the workers of the fruits of their labour.
To prevent this, it is essential, that the division of the working day between social and necessary labour, be decided by the working class itself; rather than by a government which claims to act in its interests. There should be an annual vote by the working population to decide on the level of the 'community charge'. A multiple choice ballot could allow the people to decide between more public services or more consumption. Only when the surplus product is provided voluntarily does it cease to be exploitation.
The communist movement has never developed a correct constitutional program. In particular it has accepted the misconception that elections are a democratic form.Proposition 7 Soviets and elections on universal suffrage are both ultimately aristocratic forms of government.
Aristocracy means rule by the best.
In a feudal society, landowners are self evidently the best, most honorable, most noble elements of society. But this does not limit aristocracy as a principle to feudalism. Aristocracy simply means an elitist system of government.
Aristotle argued that any political system based upon elections was an aristocracy. (See  pp 286). It introduces the deliberate element of choice, of selection of the best, the aristoi, in place of government by all of the people. What he implies, as would be evident to any Marxist, is that the 'best' people in a class society will be the better off. The poor, the scum and the riff-raff are of course 'unsuitable' candidates for election. Wealth and respectability go together.
In a bourgeois parliamentary system this aristoi is comprised in the main of men of high social status: lawyers, business men etc. In a soviet system the aristoi who get elected onto the local soviets, and still more those who get promoted from the local to the supreme soviets, are initially the elite of the working class. They are the politically active, the class conscious, the self-confident, in short, activists of the Communist Party.
The leading role of the Communist Party, translates it, in an electoral mechanism with a purely proletarian constituency, into the aristocracy of labour. As such it becomes prey to the characteristic corruptions of aristocracy. Soviets, based as they are on the electoral principle, transform themselves from instruments of proletarian democracy into their opposite.
This degeneration is not accidental, not to be explained away by historical contingencies, but inevitable . Elaboration 5 Democracy is an ancient term for a type of popular rule based upon mass assemblies and selection of officials by lot. What has come to be termed democracy in the 20th century has almost nothing in common with this original meaning.
The political systems that currently label themselves democracies are all oligarchies. The fact that they can still get away with calling themselves democracies is one of the most remarkable confidence tricks in history. (See  ).
In his dsytopian novel '1984' Orwell makes ironic reference to Newspeak, a dialect of English so corrupted that phrases like 'freedom is slavery' or 'war is peace' could pass unremarked. What he was alluding to is the power of language to control our thoughts. When those in authority can redefine the meanings of words they make subversion literally unthinkable. The phrase 'parliamentary democracy' is an example of newspeak: a contradiction in disguise. Go back to the Greek origins of the word democracy. The second half of the word means 'power' or 'rule'. Hence we have autocracy ; rule by one man; aristocracy, rule by the aristoi the best people, the elite; democracy meant rule by the demos. Most comentators translate this a rule by the people, but the word demos had a more specific meaning. It meant rule by the common people or rule by the poor. Aristotle, describing the democracies of his day was quite explicit about the fact that democracy meant rule by the poor. Countering the argument that democracies simply meant rule by the majority he gave the following example:
Suppose a total of 1,300; 1000 of these are rich, and they give no share in office to the 300 poor, who are also free men and in other respects like them; no one would say that these 1300 lived under a democracy(Politics 1290).
But he says this is an artificial case, "due to the fact that the rich are everywhere few, and the poor numerous." As a specific definition he gives:
A democracy exists whenever those who are free and are not well off, being in a majority, are in sovereign control of the government, an oligarchy when control lies in the hands of the rich and better born, these being few.In the original meanings of the words what exists even in countries that are termed parliamentary democracies is oligarchy not democracy. In its origins,'democracy' meant rule by the working poor. In modern language : workers power or proletarian rule ( the proles being the latin equivalent of the greek demos). We can see how far a parliamentary system is from a democracy in practice by looking at the actual institutions of the demokratia .
The second important institution were the peoples law courts or dikasteria. These courts had no judges, instead the dicasts acted as both judge and jury. The dicasts were chosen by lot from the citizen body, using a sophisticated procedure of voters tickets and allotment machines, and once in court decisions were taken by ballot and could not be appealed against. It was regarded by Aristotle that control of the courts gave the demos control of the constitution.
There was no government as such, instead the day to day running of the state was entrusted to a council of officials drawn by lot. The council had no legislative powers and was responsible merely for enacting the policies decided upon by the people.
Participation in the state was restricted to citizens. This excluded women, slaves and metics or in modern terms resident aliens.
Only where skill was essential, as with military commanders, was election considered safe. The contrast with our political and military system could not be more striking.
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