The Contradictions of Real Socialism

by LOUIS PROYECT

Several months ago the Crooked Timber blog held a seminar on Francis Spufford’s “Red Plenty”, a novel that was widely embraced as a kind of postmortem on the USSR. The title refers to the apparently foolish beliefs of Soviet leaders, scientists and economists in the 1950s and 60s that “plenty”—in other words, consumer goods—could be achieved through central planning based on advanced computing technology.

Using a cast of characters both fictional and real (including Khrushchev), Spufford tries to capture the heady optimism of the post-WWII period, when both the USA and the USSR were experiencing rapid economic growth. In the first chapter, the representative character is Leonid Vitalevich Kantorovich, a real-life mathematician committed to introducing scientific methods into Soviet factories, in this instance a plywood factory to which he was attached:

The management wanted help tuning the orchestra up. To be honest, he couldn’t quite see what the machines were doing. He had only a vague idea of how plywood was actually manufactured. It somehow involved glue and sawdust, that was all he knew. It didn’t matter: for his purposes, he only needed to think of the machines as abstract propositions, each one effectively an equation in solid form, and immediately he read the letter he understood that the Plywood Trust, in its mathematical innocence, had sent him a classic example of a system of equations that was impossible to solve. There was a reason why factories around the world, capitalist or socialist, didn’t have a handy formula for these situations.

For Spufford, and for the social democrats and liberals who run Crooked Timber, economics is reduced to machinery and markets. The USSR failed because the bureaucracy rejected the advice of the mathematicians and computer scientists but more importantly because it relied on central planning in defiance of the wisdom of markets. As had supposedly been proven by Von Mises and Hayek, it was impossible for planning to work since it could not set prices accurately, nor could it provide resources—whether human, machine or raw material—to factories in a timely fashion. Of course, it would be unseemly for self-avowed leftists to openly pledge allegiance to the Austrian school. Instead they refer to Soviet and Eastern European economists who after becoming disillusioned with planning began to push for market solutions using language that could have been lifted out of a Von Mises or Hayek text, even though they had the supposed benediction of being a Marxist at some point in their career. While not quite nearly so bad as David Horowitz’s Front Page, the “god that failed” theme is fairly pervasive at Crooked Timber.

Sounding like someone who has joined Marxists Anonymous, John Quiggin, a member of the Crooked Timber moderation board and the author of the weak-tea Keynesian “Zombie Economics”, confesses at the start of his “Red Plenty or socialism without doctrines”: “I was once, like most of the characters in the book, a believer in central planning.

He is much wiser now, advising us: “Hayek and Mises had the better of the famous socialist calculation debate of the 1920s and 1930s.” In making his connection between the Austrians and Kornai, Quiggin writes:

In 1956, Kruschev [sic] makes his famous promise of overtaking the US, and it seems quite credible, but a decade later, all belief in the promise of plenty has been lost. As the book ends, the mathematical programmers charged with making the plan work are pushing the benefits of prices – some at least, like Janos Kornai, would complete the journey to the free-market right, and advocacy of the ‘shock therapy’ approach to post-Communist transition.

I doubt that Michael Lebowitz, the author of six books promoting the socialist alternative to capitalism, would have bothered taking part in Crooked Timber’s seminar even in the highly unlikely event that they would have invited someone to an event stacked even more in favor of bourgeois hegemony than a League of Women’s Voters presidential campaign debate. But if he had, I am sure that he would have come out on top.

What’s entirely missing from the calculations of Francis Spufford and his friends at Crooked Timber is the role of working people in whose name the revolution of October 1917 was made. In the entire cast of characters of “Red Plenty”, there is not a single coal miner, assembly line worker, or truck driver. The only reference to working people is toward the end of the novel when bureaucrats fret over food riots that led to the Novocherkassk massacre of 1962. If I had written about such a clash, I would have been far more interested in what motivated the workers than how technocrats searched to find a permanent solution to the unrest.

When Spufford refers to the management wanting help in “tuning the orchestra up,” I could not help but think of the same metaphor used by Lebowitz in the title of his latest book “The Contradictions of Real Socialism: the Conductor and the Conducted”. For Spufford, the orchestra is primarily machinery and the factories organized around them, with the human beings who produce goods and service mostly an afterthought. For Lebowitz, they come first:

This is what we need to keep clearly in mind when we think about socialism. Social production organised by workers is a necessary condition for the full development of the producers; it is not something to be put off to some future society. “As long as workers are prevented from developing their capacities by combining thinking and doing in the workplace, they remain alienated and fragmented human beings whose enjoyment consists in possessing and consuming things.” Once we grasp Marx’s insight into revolutionary practice, the importance of that key link of human development and practice, we recognise that the process of building socialism must be one of simultaneously producing new socialist human beings—that is, two products rather than one.

Return, though, to Marx’s metaphor for the general necessity for a directing authority where many individuals cooperate—the orchestra conductor. Think about how that particular conductor enforces the division of labour of the players (including the separation of thinking and doing) in order for them to perform the predetermined score as a harmonious unit; and think about what he rejects—spontaneous creation, collective interaction among the players, jazz.

The orchestra performs the music. But what is the joint product in this process? What development of human capacities occurs in this social labour process under the direction of the orchestra conductor as described above? Certainly, this process is far more rewarding than isolated, individual activity: “When the worker co-operates in a planned way with others, he strips off the fetters of his individuality, and develops the capabilities of his species.” Certainly, too, the members of the orchestra can take pride in their collective accomplishment.

For Michael Lebowitz, socialism is not just about “efficiency” or GDP or other conventional economic indicators that are the daily bread of bourgeois economists and even some socialists. He stresses throughout all his books the need for overall development of the human being under socialism, and in particular the “combining of thinking and doing” as Marx put it. For the disciples of both Von Hayek and his ostensible adversary John Maynard Keynes, not to speak of the bureaucracy featured in “Red Plenty”, the worker will always be a “doer”, not a thinker. The criterion favored by all of them is whether consumer goods get produced in a cost-effective and timely manner–Spufford’s “plenty” so to speak.

For Lebowitz, automation is no panacea. What the Soviet scientists of “Red Plenty” failed to realize is that the “information society” model puts the conductor on top of the orchestra as a supreme authority on what gets produced and how it gets produced. Those at the bottom are simply information providers that help planners make decisions. In other words, the distinction between doers and thinkers remain.

For the vanguard to be able to direct the economy as a single nation-wide “factory,” it must be certain that all the information it requires for planning is transmitted accurately from below and consolidated and that all its decisions on production (sectoral distribution and growth) be transmitted accurately downward to each unit of production. And all of this must be done in a timely manner without the individual players being able to deviate from the score. But this requires the perfection of the specifically vanguard mode of production—a computerized, cyber-netic economy, “computopia”!

In short, the development of a single automated system of control is the condition for the perfection of direction from above of the national factory. In the fully developed vanguard mode of production, other than individual consumers whose atomistic decisions are reflected in inventory movements, only the vanguard has the power to use its discretion. Only the vanguard can make decisions with respect to the plan (and that includes a political decision not to follow the effect of consumer preferences—that is, politics are in command). In short, the ultimate decisions are made at the top. Once made, the mechanical orchestra will carry them out—the conductor will have the perfect orchestra

Much of “The Contradictions of Real Socialism” is a close examination of Janos Kornai’s evolution. Starting out as a market-oriented “reformer” in Hungary, he finally ended up on the Harvard University faculty in 1986, only to return to his native land in 2002 to become part of the elite, both as a Central Bank administrator and a professor. He is now 84 and remains committed to free market institutions despite the fact that Hungary is a basket case like most of Eastern Europe. Under similar conditions in the 1930s, Kornai joined the Communist Party after reading Marx’s Capital. It must be assumed that many young Hungarians will be going through a similar evolution today, but hopefully not by affiliating with a party that has outlived its usefulness, if it ever had any.

After leaving Harvard, Kornai took a post at the Central European University, an institution created by George Soros, a fellow Hungarian who provided an endowment of $880 million, making it one of the wealthiest in Europe. In the 1980s Soros lavished gifts on Eastern European dissidents, at one point supplying 200 Xerox machines. One imagines that they were greatly appreciated, as well as the conferences devoted to the benefits of the free market that they were able to attend at places like Harvard University—airfare and hotel accommodations compliments of George Soros. Lest anyone conclude that a charge of bribery is being raised here, I can only state that Mr. Soros would have been found guilty of nothing but breaking down an open door since most of these dissidents had converted to one form of bourgeois economics or another.

The basic problem that Kornai was trying to address when he was still a functionary in the Communist Party was shortages. This was a problem that existed throughout the socialist world (such as it was) and presented a serious challenge to those in charge. It was reflected across the board, both in labor shortages as well as capital shortages. The underlying cause was hoarding, deemed necessary by factory managers who felt it necessary to supply a cushion in order to meet quotas assigned by central planners.

For Kornai, the power of the manager over both resources and the workers was a given. Rather than trying to come to grips with an obvious flaw in the system, he saw the omnipotent factory manager as a key element in the socialist system.

Kornai’s main explanation for the shortage economy became the expansion drive centered in individual enterprise managers. In particular, he emphasized the manager’s “identification” with the job: “on average a firm’s manager tries to do his job properly.” He “endeavors to secure subsistence, survival and viability of the unit put in his charge.” He wants to guarantee a smooth working process. “He wishes to avoid confusion and disorder. If only for that reason, he strives for the largest possible security: procurement of more input and larger reserves.” The manager further wants to “win his superiors’ acknowledgement, avoid their anger, and to fulfill their expectations: not only their instructions but also their wishes.”

As the crisis of the Hungarian and Soviet economies deepened, the tendency of people like Kornai was to cede more and more authority to the manager, eventually coming to the conclusion that the contradictions of an economy resting on both public and private interests (expressed fully by the bonus system) could only be resolved by terminating the public part.

Lebowitz characterizes the Soviet model as resting on “vanguard relations of production”, a term used by Kornai to describe what Trotskyists call a bureaucracy and what others might describe as state capitalism. Despite the ideological differences, there is general agreement that socialism does not describe the system that prevailed.

It is the hope of Michael Lebowitz and many others on the left that a 21st century socialism will result in a new kind of society in which workers are the real rulers and in which the distinction between knowing and doing will be resolved as rapidly as possible.

One of the main values of Lebowitz’s research project is to reinvigorate a movement that has been far too reconciled to an interpretation of Marx’s writings that places little or no emphasis on human development. To some extent, this is a function of Marx’s emphasis on the worker as worker, rather than the worker as human being capable of being transformed into something more than an agency of proletarian revolution. Lebowitz argues that this dimension found its fullest expression in Marx’s early writings, the ones often disparaged as “early” and overly philosophical. I, for one, was always partial to an early work that contained an observation that I was always sure to put on my cubicle walls as long as I was a wage slave (I am now retired.)

“…the worker feels himself only when he is not working; when he is working, he does not feel himself. He is at home when he is not working, and not at home when he is working.”

Economic and Philosophical Manuscripts of 1844

Louis Proyect blogs at http://louisproyect.wordpress.com and is the moderator of the Marxism mailing list at http://greenhouse.economics.utah.edu/mailman/listinfo/marxism.

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