Actually Existing Central Planning and the Logic of Accumulation

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Matthijs Krul in his Notes and Commentary blog has provided a very thorough and critical Marxist analysis of Seth Ackerman’s essay The Red and the Black published in the latest issue of Jacobin magazine. We’ve already posted the section of Doug Henwood’s show, Behind the News which features a long interview with Ackerman about his essay.

I believe it’s worth reading Krul’s response for those interested in thinking about what a socialist economy would look like, and the how objections to its potential are ill-founded. The post is positive about many of the points raised by Ackerman, but he highlights their limitations and does so in a much convincing way than others who have so far tackled The Red and the Black essay. I’d like to provide a large chunk which gets to the heart of his critique, but also indicates how ‘central planning’ which is seen to have failed in the Soviet Union, flourishes today within capitalist society. Krul’s argument is that this failure was a political one as the Soviet economy remained subject to the logic of accumulation.

“I would argue then, contrary to Ackerman, that the failure of actually existing central planning is not one of its potential, but historically one of its politics. The drive for accumulation for its own sake makes sense, when productivity in poor countries must be developed so that socialism can mean general abundance, not general poverty. I completely agree with Ackerman when he points to the importance of whether the supermarkets are full or empty. But there can be no market-based socialism, because capitalism ultimately does not reproduce itself in the market, but in production. Soviet central planning is in this respect a step up from that, as it socializes not only all spheres of distribution and surplus, but also consciously aims for developing productivity so that ultimately the ‘switch’ can be made towards a general needs-based society. However, it failed this test. The working class resisted this accumulation, as it represented the perpetual postponement of their personal development in the name of the general interest. This resistance took the form of a resistance to work, since this and this only was the remaining locus of capitalist logic in the Soviet system: hence the endless thefts from the workplace, the low quality of production, the shoddiness of the finished goods, the sullen, passive noncompliance with the state apparatus and its designs, and finally the fruitless attempts by the Soviet state to remedy these by draconian measures and moral exhortations. The problem with Soviet-type central planning was therefore a political, not a technical one.

Central planning is simply not the problem Ackerman makes it out to be. In fact, we see it at work even in ‘normal’ capitalism all the time. As soon as push comes to shove, and the liberal-democratic societies are threatened by total war, they approximate central planning in their production methods as closely as their political systems allow. Capitalist firms rely on high-level central planning all the time in the modern economy. Just-in-time distribution, Amazon’s on-demand system, modern supermarket provisioning, international cargo shipping, air traffic coordination: all these are examples of sophisticated and accurate central planning in the contemporary world. Our computing techniques and capacity have improved by several factors since the Cuban Missile Crisis: there is nothing technical stopping us from applying this technology in the benefit of socialist humanity rather than a small elite of owners and investors. But if we do not want to repeat the mistakes of market socialism and of Soviet planning both, we must put the conditions of production at the forefront of our transition to socialism. Let us learn all we can about logistics, about organizational theory, about planning models. Let us take the enormous technological capacities and productivity of capitalist society, “which has accomplished wonders far surpassing Egyptian pyramids, Roman aqueducts, and Gothic cathedrals”, and use it to reduce to a minimum the work expected from everyone; especially dirty, unpleasant, and degrading work. Our unprecedented expansion of free time will see not just a flourishing of culture and the intellect, but also of many more ideas to perfect the process of production and distribution to the benefit of all. Then the realm of freedom will truly begin, and with it a new, socialist, history of humanity.”

This is true too of the way that large corporations which are effectively oligopolies operate. More often than not the price of their products is determined by the corporation themselves and that many of their costs are based on products and services that they sell to themselves, which allows them to control the price of those products and services. A good example is the pharmaceutical sector. As they control patents on products there is no competition to speak of, so the price is set not by the market place but by the corporation. Other corporations use intangible assets such as trademarks or patents as a form of central planning designed to completely dominate a market and protect itself from competition. Various arms of a transnational company will sell and buy intangible assets to each other at a price determined by the corporation. The price, of course, is designed to completely avoid tax on profits which are hidden as administrative costs. But these transnational distribution of goods and services have all the hallmarks of controlled central planning.

Krul is arguing that a socialist economy must control production, and not the distribution of accumulated surplus. Nationalising all the banks and controlling the financial services sector, he says, would not bring about the aim of reducing labour time and allowing people to reach a fuller potential. Yet at the moment within capitalism the banks and financial institutions hold the most power. So, the argument appears to be that while we need to challenge the dominance of that power we should not try to replicate its dominance in any new economy.


One Response

  1. Ellie Kesselman

    April 8, 2013 12:34 pm

    I am a first time visitor, and an occasional Jacobin reader. I like your website, including the user interface (ah, WordPress dot org; a good choice). The content is a pleasant change for me. Typically, I find myself quibbling with Libertarian programmers, who claim that Marxism is the same as fascism.

    The image of an Amazon warehouse was an apt illustration. Amazon had seemed beneficent to me merely a year ago. I have a question, if you might indulge me? Your post concluded as follows:

    Nationalising all the banks and controlling the financial services sector, he says, would not… allow people to reach a fuller potential. Yet at the moment within capitalism the banks and financial institutions hold the most power. [W]hile we need to challenge the dominance of that power we should not try to replicate its dominance…

    Usually, my response to corruption and out-of-control private enterprise is,
    “Nationalize! Restore fiscal responsibility, decent work conditions, fair prices for customers!”

    Unfortunately, in the U.S.A., during the past decade, there has developed an unwholesome alliance between banking and financial services (sadly they are now the same, without Glass-Steagall). Yet I don’t believe government controls the banks. Banks aren’t even controlling the banks, per se! That wouldn’t be so terrible, as there are vast numbers of Americans who own shares of bank stock through public pension funds, who would benefit from bank prosperity. Instead, there are the philanthropist-elite of a different sort than in the past, who control banks, and government. They describe themselves as liberal progressives, eager for social justice, and maybe believe that they are. They aren’t though.

    So, my question: “Are you saying that nationalizing banks and financial services wouldn’t be especially beneficial, not under current conditions, because banks seem to have taken over government already, so nationalizing isn’t even possible?”