Let me turn to another topic about which I have so far said little. The thesis of this work is that worker-control socialism is superior to capitalist alternatives. but what about other socialist alternatives? This question too is of interest and importance.
A fundamental feature of worker-control socialism is control of the workplace by those who work there. I have called this feature "worker self-management." Commitments to liberty, democracy, participatory autonomy and the value of meaningful work all provide a basis for a commitment to worker self-management. If one calls "socialist" any economic system that prohibits private ownership of most of the means of production, it is plain that not all socialist societies are worker self-managed.
Less obvious but more significant to the model-comparison analysis we have been doing, some forms of socialism are incompatible with worker self-management. Unless major countervailing considerations can be brought to bear, these forms of socialism should be judged inferior to worker control by anyone subscribing to the values I've discussed.
One form of socialism is incompatible with worker self-management virtually by definition. "Technocratic socialism" is an economic system without private ownership of the means of production in which production units are run by more or less autonomous technical elites within bounds set by the state. If stockholders were "put to sleep" in Galbraith's Ideal Industrial state, the result would be a technocratic socialism. Also technocratic is a recent proposal by Leland Stauber to institute socialism by simply transferring all corporate stock to local-government investment funds, to be managed by experts--who would now serve the public instead of the interests of the wealthy few.
As is characteristic of a technocratic socialist, Stauber rejects
the syndicalist idea of ownership and control by firms totally or primarily by their employees . . . on the grounds that it underestimates the relevance to economic performance of professional management, particularly in large, complex organizations, and can also obstruct or retard the closing of uneconomic plants and dismissals of excess labor.
I have already discussed the thesis that technocratic control is indispensable to an advanced industrial society. As to the "obstructing or retarding the closing of uneconomic plants and dismissals of excess labor" that is a virtue of worker control, not a vice. Until the technocratic socialists confront the empirical record of successful worker self-management, I don't think more need be said.
The Soviet system best represents a second form of socialism that is difficult to reconcile with worker self-management. It is the economic form once identified with socialism: central planning by the state. a government planning board assumes control of the entire economy; it specifies for each production unit quantitative and qualitative output quotas, the inputs to be used, the prices to be charged and the wages to be paid. All economic mystification dissolves, since human agents now consciously decide what gets produced, how, and to whom it is distributed.
Unfortunately this model, so conceptually clear, is subject to serious practical difficulties--due not (primarily) to the ill-will or class bias of the planners, but to the sheer immensity of the task at hand.
"The essential point," says Nove,
is that in most instances the centre does not know just what it is that needs doing, in disaggregate detail, while the management in its situation cannot know what it is that society needs unless the centre informs it. . . . The trouble lies in the near impossibility of drafting micro-economic instruments in such a way that even the most well-meaning manager will not be misled.
Consider a single example: the production of sheet metal. the planning center must specify a quota for each factory. In what units? Suppose tons are selected. Then a manager, who has no other information upon which to base his decision, will tend to produce thick sheets, since it is more "efficient" to satisfy the quota that way. On the other hand, if square meters are selected, he will tend to produce sheets as thin as possible. of course consumer feedback will have some effect, but this is largely nonquantifiable, difficult to evaluate, and in any event an unwelcome obstacle, from the production unit's point of view, to its primary goal--speedy execution of the plan. (Nove cites a cartoon published in Krokodil, showing an enormous nail hanging in a large workshop" "The month's plan fulfilled," said the director, pointing to the nail. In tons, of course.
One must not lose one's perspective in the midst of the myriad examples of soviet inefficiency (so happily recorded by neoclassical economists). for all its inefficiencies the Soviet economy works. in some respects it works better than Western capitalist economies: there is less unemployment, less nonrational sales persuasion, (probably) less inequality; the system is better designed to decide and control the kind and rate of growth it undertakes, and it is less prone to inflation-recession instability. Micro-efficiency, after all, is but one value by which to judge an economic system; in a relatively affluent society it would hardly seem the most important.
In fact my main objection to central planning is not its inefficiency (though the demoralizing effects of waste and irrationality should not be discounted entirely), but to its problematic relationship to noneconomic values. Central planning requires centralized authority, and that leads (at least under conditions of scarcity) to a dangerous concentration of power. The classical liberal concern for liberty is not misguided here. Nor is the concern (not shared by classical liberals) for participatory autonomy. to be sure, it is possible for a centrally-planned economy to grant formal control of enterprises to their workers instead of to appointed managers--but since the planning board sets production quotas, prices, inputs and wages, there is little real scope for worker decision.
Even if some flexibility were granted in these areas, two important decision classes would almost certainly be ruled out: the choice of more leisure over more production and the choice of more "humane" but less "efficient" technology. But these choices--which serve to check compulsive consumption and work alienation--are important strengths of worker control. These are difficult to reconcile with central planning.
There is also the problem of discipline. granted, the central planners could discipline the entire workforce of an enterprise for failure to meet its quota--but such an approach would surely provoke an antagonistic reaction. It is far more "efficient" (from the point of view of the central planners) to appoint a director and make her responsible. But if she is responsible for quota fulfillment, then she cannot be accountable to her workforce--and so authoritarian structure must be imposed. this tendency toward authoritarianism seems to me almost irresistible.
If technocratic and centrally-planned socialism stand in conflict with worker self-management (and the value of participatory autonomy), no such conflict exists between self-management and a participatory "pure market socialism"-- a laissez-faire economy in which workers, not stockholders, have full legal control of their enterprises. Discipline, for example, is no problem, since an impersonal market imposes discipline. Enterprises are constrained by the necessity of economic survival, but within this constraint they have a range of options concerning distribution of income, labor-leisure tradeoffs, goods to produce, and technologies to employ.
Unfortunately, a pure market socialism with worker self-management is economically unsound. Its difficulties trace to two basic factors: first, the workforce of a labor-managed firm is disinclined to expand; second, investments are in no way coordinated or controlled. With pure market socialism we get anarchy of production, replete with unemployment that has no tendency to diminish, widespread and growing inequalities, consumption and production externalities, an unplanned growth, and inflationary and recessionary instabilities.
(This "anarchy" is somewhat different from capitalist anarchy, since enterprises are less likely to be expansionary. This might count as an improvement, since competition would be less ruthless and consumption less compulsive, but, on the other hand, with profits either consumed or invested in one's own firm, economic development is in no way directed to the general needs of the community. Not even the admittedly imperfect profitability criterion is employed, much less conscious social planning, with respect to society-wide investment opportunities.)
Against this background of alternatives, the essential strengths of worker-control socialism come sharply into view. By planning investment--but not the whole economy--the basic virtues of central planning are (approximately) achieved. by relying on the market to coordinate the daily activities of existing firms, the micro-efficiencies of the market are preserved, the economy is decentralized, and a structure prevails that is fully compatible with worker self-management. Thus the strengths of both plan and market are maintained, and the weaknesses of each minimized. This, in my view, is a remarkable accomplishment.
It is not good enough for some socialists. A Tradition rooted in the New left rejects both central planning and the market, and all combinations of the two. Central planning, these theorists agree, has all the defects I've described to it, but the market is also proscribed, on the ground that
it involves as motivations only the maximization of personal immediate consumption pleasure and profit (per worker). The market involves a continual possibility of competitive failure, and thus creates basic insecurities, which themselves elicit defensive behaviors counter-productive to societal well-being. . . . Markets simultaneously require competitive behavior and prohibit cooperation as irrational. For markets create a direct opposition of interests between those who produce a certain good and those who consume it. . . . As an economic agency, markets establish the opposite of solidarity--they declare the war of each against all.
But if neither the market, central planning nor some combination of the two is acceptable, what is the alternative? Albert and Hahnel don't flinch at the question. democratic councils and iterative planning, they reply. each workplace and each neighborhood is to be organized as a democratic council, responsible for the day-to-day activities of that unit, and for initiating and revising proposals concerning what it will give to society and what it will take. these proposals, via a "back-and-forth iterative procedure," will generate an economic plan.
And how will this happen? Let me quote:
Each council would have to estimate past experience the kind of efforts required by others to supply a list of proposed inputs, and the uses to which others would put a given list of proposed outputs. Then, learning the results of all units' first proposals, each council would get much new information to work with.
Stop! Consider for a moment some numbers. there are more than 200 million persons in the United States. place each in a neighborhood of say 2000, and a workplace of similar size. that gives us 100,000 neighborhood councils and 100,000 work councils, each which is to draw up a proposal to be read by every other council. (Even if a council reads only the reports of those it affects or is affected by, the numbers are staggering.)
Consider also the construction of each proposal. each member of each neighborhood unit estimates the kinds and quantities of goods he would like to consume during the next year. this information is somehow collated, and, in addition, estimates are made of the kinds of effort required to produce all these things. (How much effort went into producing the book you are now reading? How many books, and of what types would you like next year? How many paper clips, 12-penny nails, and cans of chicken soup? and what effort goes into producing them?)
To call this "alternative" mind-boggling is an understatement. To call it preposterous is not unfair.
Such silliness need not be taken seriously.
And yet . . . And yet there is something right about the critique that prompted this proposal. So long as one's material well being is tied to the production of things that one must sell on an open market, one is inhibited from experiencing one's activity as part of the collective, cooperative labor of society. One is tempted to deceive or take advantage of others (especially one's customers and competitors). The antagonistic relations generated by the market serve to promote an efficient allocation of goods, but they also promote suspicion, insecurity, duplicity, an selfishness.
It has long been the socialist dream to abolish this contradiction of capitalism, along with the many others. it has long been the dream to eliminate money, economic competition, and all the attendant "fetishisms." Worker-control socialism does not.
To a considerable degree it softens the antagonisms associated with the market, but it does not dissolve them. It is my belief (widely though not universally shared on the Left) that the objective conditions of contemporary society, even allowing the considerable change of consciousness that can be presumed to accompany the advent of socialism, render the abolition of the market unfeasible. To replace it by centralized planning is undesirable; to replace it by "democratic councils and iterative planning" is fantasy.
Source: Capitalism or Worker Control: An Ethical and economic Appraisal. NY: Praeger, 1982. Excerpt from Chapter 7, "Concluding Remarks: How, Which, And Then What?"
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