We have arrived in Paris, exhausted and jet lagged but safe and happy. The Parisians appear to be wrapped up in their own concerns [a local police strike, for example] and it is lovely not to see or hear the name “Trump” everywhere. I am unable to report on the whereabouts of Jean Gabin and Yves Montand, the two little batobuses, because my walk this morning did not take me past their usual nighttime resting place. Stay tuned.
After reading the most recent comments, it has occurred to me that I ought to write a blog post about Marx’s conception of the way in which socialism would come to replace capitalism – what is usually referred to as the “transition problem.” I have in fact written an entire essay about this subject and archived it on box.net, but Box informs me that only 680 visits have been paid to that essay, from which I infer that there are a good many readers of this blog who have not read it. My apologies to those who have for repeating myself.
Just to be clear, by “socialism” I mean “collective ownership of the major means of production, democratically managed.” I am not talking about state-run lottery stores or state run small businesses. I am talking about major accumulations of capital, collectively owned by the population of a nation as a whole and managed democratically by a managerial staff selected by, and responsible to, the elected representatives of the citizenry. Thus I am not talking about an advanced stage of welfare state capitalism, nor am I talking about a flourishing of cooperatives and collectives running farms or urban transit systems or clothing outlets. I am all for cooperatives and collectives. I am just not talking about them here. What sorts of major accumulations of capital am I talking about? Well, General Motors, or Google, or Microsoft, or Walmart, or U. S. Steel, for example.
The standard objection to socialism, set forth almost a century ago by Ludwig von Mises and Friedrich Hayek, among others, is that at its very best, socialism would necessarily be inferior in efficiency and rationality to market-drive capitalism. Socialist planners and managers [Hayek and von Mises were looking at the early stages of the Soviet Union], it was said, would like any economic decision makers have to make a series of choices about what to produce, how, and in what quantities, and what prices [for purposes of calculation, if nothing else] to assign to both the inputs into production and the outputs of production. In a capitalist economy, the managers of capital rely on markets to guide these choices by an endless series of rapidly fluctuating signals in the form of prices and effective demands for goods. Socialist planners would have to substitute their own best estimates for these market signals. Generally speaking, their efforts would be inferior to those of the market both because they would have much less information than that provided to the market in the form of offers to buy and offers to sell by countless millions of economic agents, and because their means of processing the information they were able to assemble would be primitive relative to the processing automatically carried out by the market. Since the market’s information processing, Hayek and others argued, is perfect, the very best socialist planners could do would be to mimic the market, and in reality, they would always fall somewhat, if not a great deal, short of that perfection. The evidence of this inadequacy would be in bottlenecks in production [because of a shortage of the required inputs] or gluts [because of excesses in the production of goods for which there was not adequate demand.] Both these forms of economic inefficiency were widespread, they believed, in the Soviet economy.
The first thing to say about this argument is that, despite it somewhat overenthusiastic estimate of the efficiency of the market, it was quite correct when it was advanced. But correct though the argument was, it rested on a fundamental misunderstanding of what Marx thought [no not, perhaps, on a misunderstanding of what Stalin thought.] The key to understanding what Marx really thought about the transition from capitalism to socialism is a famous and pregnant passage in the Preface to a book that Marx published several years before the appearance of Volume I of Capital, a little work called A Contribution to the Critique of Political Economy. Here is what Marx wrote:
“No social order disappears before all of the productive forces for which there is room in it have been developed, and new, higher relations of production never appear before the material components of their existence have matured in the womb of the old society.”
Marx was thinking principally about the transition from feudalism to capitalism, about which he knew a good deal, but what he said clearly applies to the transition to socialism as well. One of Marx’s greatest theoretical contributions to Political Economy was his deep and detailed understanding of the restless and unending way in which capitalism develops new social relations of production in response to the pressures of competition. We see a good deal of this understanding in Capital Volume I, where Marx writes in great detail about the transition from the early putting out system of nascent capitalist production to the incorporation of hand-work [“manufacture”] into the factories, and the transition from hand-work, or manufacture, to machine production.
Now, the capitalism at which Marx was looking was a rather early version, so he was unable to see directly how the necessary material relations of a socialist economy might evolve and develop within capitalism. Even Hayek and von Mises, writing more than half a century later, were looking at an early stage of capitalism in England and Germany, and a really primitive form of capitalism in Russia, but we have the benefit of another three quarters of a century or more of experience, and I believe that we can actually see the objective conditions for socialism developing within the advance sector of capitalism. That is what my essay, “The Future of Socialism,” is about.
Very briefly [for I really would like anyone who is interested to go to box.net and read what I wrote], as capitalism develops in the very largest corporations, it eventually becomes impossible for the corporate managers to guide their central managerial decisions solely by market signals. I am not saying that it becomes tedious for them to be guided by the market, or that it is preferable for them to make decisions in some other way, or that these mangers have been seduced by tenured radicals at effete Eastern colleges who have filled their heads with socialist nonsense. I am saying that it becomes impossible for them to base their managerial decisions on market signals in the manner that Hayek et al. wish them to. Whether they like it or not, the corporate managers have no choice but to adopt decision making procedures that are, in their logical structure, political rather than purely market driven in nature. In effect, they become quasi-socialists whether they like it or not. But of course they serve not as embodiments of the will of the people but ether as embodiments of the will of the shareholders or, more likely, as autonomous agents merely advancing their own interests.
If the fundamental structural conditions for socialism are right now developing within the womb of capitalism, why is there little or no sign of the political mobilization that would be required to seize upon those developments and use them to carry out a transition to socialism? My answer to that pressing question is contained in the section of the paper entitled “Why aren’t we having fun yet?”
What exactly are the changes internal to capitalism that are preparing the way for socialism? My answer to that is also contained in the paper. Consider this blog post an internet advertisement for the essay.