We must be grateful to Alec Nove for keeping the controversy to the essentials, avoiding red herrings and side issues. [1] Our debate does not concern the most adequate strategy for assuring immediate rapid economic growth and increasing social equality in relatively less developed countries. Neither is its object the cause(s) of the growing malfunctioning of the bureaucratically managed economies of the ussr and Eastern Europe, and the next step forward for these countries; nor is it the determination of the way to break with capitalism in the West, or the discovery of some ‘general laws’ governing the transition between capitalism and socialism. Our controversy turns only around two questions: whether socialism as conceived by Marx—i.e. a society ruled by freely associated producers, in which commodity production (market economy), social classes, and the state have withered away—is feasible, and whether it is desirable—a necessary prerequisite for the maximum possible emancipation and self-realization of the maximum number of human beings. My answer is categorically ‘yes’ to both questions. Alec Nove’s answer is a categorical ‘no’ to the first question, and a rather hesitant ‘no’ to the second one. This does not mean that the other questions to which we have alluded are unimportant or irrelevant to the debate about the relative weight which should be given to market mechanisms hic et nunc, in the East and in the West. It is quite possible that resolute partisans of ‘Marxian socialism’ as a society without commodity production advocate an extension and not a restriction of market mechanisms in postcapitalist societies at a given stage, as did Trotsky in the early thirties. We shall come back to that question later. But it is a different question from the one whether a society without commodity production is both possible and desirable. If we don’t solve that problem first—i.e. the problem of the goal of socialists’ endeavours—we find ourselves in the unfortunate situation of Louis XVIII’s restorationist minister, the Duke of Richelieu, who didn’t know where he was going, but was absolutely adamant that he would arrive there.

Market Economy and Economic Fluctuations

Nove begins by making a statement about the lessons of the Soviet experience. He writes: ‘Mandel asks: is it appropriate to use evidence culled from Soviet experience? Yes, there were specifically Russian or Soviet factors—backwardness, “bureaucratic misrule”. But there are lessons to be learned, concerning (for instance) scale complexity, conflicts between partial and general interest, plan-fulfilment indicators, investment criteria, prices in theory and practice, labour incentives, diseconomies of scale in agriculture, the influence of user needs on plans and on output, the role of regional policy, and so on. While the Soviet record in handling these and other issues (including environmental pollution) may leave much to be desired, it would be foolish to ignore Soviet experience because of a prior decision to classify it as “not socialist”’ (p. 99).

Nobody would seriously argue that one should ‘ignore’ Soviet experience because it is obviously not socialist, i.e. has not led to a classless society. [2] On the contrary, one should indeed study that experience most carefully, if only to try to avoid the many pitfalls into which bureaucratic mismanagement has led the Soviet economy and society. Our difference with Nove in that respect concerns above all the fact that most of the lessons he wants to draw from the Soviet experience have to be seen within the framework of relative backwardness, isolation and bureaucratic mismanagement of the ussr.

The problem is to determine to what extent the shortcomings of the Soviet economy result from the ‘principles of central planning’ in and of themselves, and to what extent they are rather the products of backwardness and bureaucratic despotism, which can be avoided under more mature circumstances. To give just one example: to what extent are the famous queues in the ussr the result of scarcities flowing unavoidably from ‘central planning’, and to what extent are they the products of the wrong decision systematically to neglect investment in transportation, distribution and agriculture as compared with investment in industry, especially heavy industry? Such a disproportion in investment is neither economically rational nor an automatic product of central planning. On the contrary, it is the proof of immature, wrong, lopsided, ‘unplanned’, incoherent, wasteful bureaucratic mismanagement. It could be avoided, and will be avoided, in a democratically centralized system of workers’ management in mature industrialized countries, on an international scale.

This is not at all an argument against drawing upon concrete experience, out of some ‘socialist’ (certainly not Marxist!) dogmatism and prejudice. On the contrary. But it is an argument in favour of drawing also upon the formidable body of statistical data about consumers’ and producers’ behaviour in the most developed countries of the world—and not just in the ussr—in order to project possible patterns of behaviour in a socialist world. Indeed, it is our contention that the boot is on the other foot. It is the partisans of the alleged ‘eternal’ advantages of market economy, including of ‘market socialism’, who show an obstinate dogmatism, a growing blindness to empirical data, in the unfolding of the debate about the ‘feasibility’ of socialism, opposing less and less relevant trends (either of the past or of more backward economies) to what really has been going on in the advanced economies during the last forty to fifty years.

This leads us to another boomerang effect of Nove’s argument. He contends that ‘an unregulated market can give rise to large-scale bankruptcies and mass unemployment, which are wasteful ways of registering error. This is why (among other reasons) I enter into dispute with “Chicago” ideologists and those infected with the disease of privatizationitis’ (p. 103). But why does Nove dismiss more than two hundred years of experience of attempts at ‘regulating’ markets, all of which have failed to prevent periodic economic crises, periodic mass unemployment? Why does he hide behind the apologetic formula that ‘an unregulated market can [!] give rise to . . . mass unemployment’, when we have witnessed that phenomenon in all Western countries based upon the market economy during at least twenty-one business cycles since 1825 and are now witnessing it for the twenty-second time? Is it logically inconsistent to insist strongly upon the need to draw lessons from 160 years of ‘real’ international market economy in the Western world?

The Limits of ‘Market Regulation’

The fact that no market economy has been able to avoid the ills of periodic economic catastrophes like mass bankruptcies (mass destruction/devalorization of capital/productive equipment), mass unemployment, periodically declining living standards and periodically increasing moral misery for millions, is of course not accidental. It is related to the very nature of that economic system.

Production for the market is production for unknown customers, in unknown quantities, and with unknown financial results. Nove contends that this is not related to the difference between ex ante and ex post allocation of overall existing social resources in relation to recognized social needs. This contention strikes us as bizarre to say the least. Isn’t it precisely the nature of the market that neither producing nor consumer units know each other’s decisions in advance, i.e. a priori? But doesn’t the axle-producing unit of a car factory know in advance exactly how many axles the factory needs for the number of cars it plans to produce?

When Adam Smith and other classics maintain that the ‘invisible hand’ of the market permits supply and demand to balance, they imply that this always happens post festum, i.e. a posteriori. If freely formed prices were not signals for ‘economic agents’ to modify their behaviour, what would be their usefulness for those who advocate market economy? But modification of behaviour implies the need to correct previous decisions (to change the quantities produced, to adapt their qualities or product-mix, to transform production techniques, to modify labour/fixed capital relations in inputs, etc.)—that is, it implies a basic indeterminacy (uncertainty) of previously taken decisions.

Nove states that the car factory’s final product is, after all, a commodity which has to be sold through the market, and that its sale is uncertain. Perfectly true. But, far from weakening it, this obvious fact strengthens our point about the basic difference between a priori and a posteriori allocation of resources, or, if one prefers, direct and market-determined allocation. If car sales go down from 2 million to 1.5 million, the market has imposed a reallocation of resources. But the market cannot impose the output of 1 million axles or 7 million wheels for 1.5 million cars. Inside the factory it is not the market which rules, but technical coefficients. Allocation of resources flows automatically and rigidly from the decision to produce x number of cars, does not fluctuate as a function of interdepartmental ‘sales figures’ or ‘profits’. At the level of society in its totality, deliberately established priorities likewise rule with a priori allocation. From uncertainty, business cycle fluctuations unavoidably flow. You cannot reduce output or introduce revolutionary labour-saving production techniques [3] without causing unemployment. You cannot provoke sharp sudden drops in prices (in profit margins and in rates of profits) without provoking a number of bankruptcies. All these unavoidable evils of market uncertainty are strongly enhanced by private property and competition. They make overshooting inevitable. Overshooting amplifies the extent of the fluctuations.

No business firm can afford to act from the point of view of maximizing the ‘general good’ or the ‘social dividend’. Under the pressure of competition, all are forced to increase investment ‘when the going is good’ (i.e. when the markets and profits seem to be expanding), and likewise to reduce investment when a crisis has broken out, regardless of the overall effect this behaviour has on the economy as a whole. So we periodically move from ‘too much’ investment (near-full employment, overheating) to ‘too little’ investment (massive unemployment). ‘Market regulation’, i.e. intervention by the public sector, could only neutralize these fluctuations under two sets of circumstances. It could do so after they have occurred, in which case they would not have been avoided, but only limited in time. The correction could only be effective if public investment were a huge—and growing—part of total investment, and if the public sector were largely insulated from the consequences of the business cycle, i.e. if it were essentially of a non-market nature. The second alternative would be to prevent evils like unemployment from occurring, by increasing public investment before the decline of private investment sets in. But apart from the perverse effects of such behaviour on the overall economy—unless private investment has already become marginal—it is impossible to make an exact prediction about the scale and timing of the downturn in private investment, precisely because it abstracts from the existence of real uncertainty.

So efficient ‘market regulation’ is just impossible: theoretical analysis confirms the historical record. To want to maintain a sizeable market economy while avoiding mass unemployment and numerous bankruptcies is the same as eating your cake and selling it too.

Social Priorities and Limited Resources

This is all the more the case as total resources are always limited. Any use of them by the public sector or for non-market purposes of direct need satisfaction automatically restricts their availability for marketoriented production. Now Nove himself states that ‘health, education, (public) housing, posts, urban public transport, environmental protection, water supply, street lighting and cleaning, parks, etc., are not (should not be) provided because of a desire to make money’ (p. 102). If one adds—as one should—cultural and information (communication) services and basic food and clothing to that list, one would already cover between 70 and 80 per cent of civilian expenditure in most of the industrialized countries of the world, leaving only a minor sector of the economy at the disposal of market relations, in any case. It is our strong conviction that for social and psychological reasons of overriding importance, basic food, clothing, average housing for all, and cultural goods, should be included in the list of those products and services whose distribution should be based upon need satisfaction in the form of use-values only, i.e. should be disconnected from money/market relations.

For thousands of years humankind has lived in the shadow of hunger, insecurity, illness, epidemics, natural catastrophes and fear of sudden disastrous decline in their basic need satisfaction. There are only two essentially different economic mechanisms through which economic security can be assured on a long-term basis: either through the accumulation of large sums (fortunes) of money through individual strife, or through a social set-up which automatically guarantees each individual the satisfaction of their basic needs, independently of their individual situation and effort. The first mechanism fosters social behaviour (including social values and, if one wants to use that term, a social ethos) based upon competition, egoism, aggression, universal corruption (venality) of social life, growing alienation, in short the rat race. This is not only true in capitalist society, where it obviously reaches its climax. It is also true under pre-capitalist petty-commodity production. It surely applies to post-capitalist partial commodity production, as the examples of the ussr, Eastern Europe and China strikingly confirm. While this might be inevitable as long as material conditions do not permit a radical withering away of market and money relations, it is certainly a social evil which imposes massive physical and mental hardships on millions of human beings. [4] It also leads to increasing social dislocation and global dangers.

At a time when the four horsemen of the apocalypse—nuclear annihilation of life; destruction of the eco-systems and the biosphere; hunger in the Third World; massive impoverishment among the northern hemisphere’s victims of the ‘dual society’—are breathing down our necks, humankind simply cannot afford anything like the present doses of competitive and aggressive behaviour. A social set-up which fosters the opposite ethos of cooperation, solidarity and universally applied moral rules, in the first place complete disarmament, has become a sine qua non for the sheer physical survival of humanity. Cooperative behaviour, i.e. socialism or misery and barbarism, with a palpable risk of actual extinction: this is the choice before humankind today. To believe you can foster worldwide cooperative behaviour leading to the universal respect of common moral rules, without basic material security and need satisfaction, is utopia of the worst kind. To believe you can assure need satisfaction through greed, private acquisitive drives, universal competition and strife, and simultaneously foster growing cooperation, solidarity and respect of universal ethical rules, is again a case of having your cake and eating it.

The same social-priorities argument against market mechanisms applies to the case of producers’ private initiatives raised by Nove: ‘Any citizen or group of citizens that wishes, at their risk, to provide a good or service which they believe to be needed, should be in principle free to do so, be able to obtain the required material means and to derive an income (profit) if they succeed. That should be an integral part of their rights and freedoms as producers, rights which would be infringed if a “socialist police” were ordered to stop them. If the goods and services in question were satisfactorily provided within the public sector, the profitable opportunity would not exist’ (pp. 101–102). One is rather amazed that after two hundred years of socialist criticism of wagelabour, Nove, following here the liberal (neo-liberal) credo, fails to make the obvious connection between the various mechanisms which enable ‘free enterprise’ to function in a satisfactory way for some, a small and declining minority that is. [5]

The real history of capitalist ‘free enterprise’, with high technology and wage labour, is not the history of more and more people getting the ‘required material means’. On the contrary: it is the history of more and more people being cut off from the ‘required means’ of producing their livelihood on their own account, and in the first place from free access to land. ‘Free enterprise’ with wage labour for the benefit of the few was established by destroying ‘free enterprise’ without wage labour, for the benefit of the many. Before economic mechanisms—the specific laws of product appropriation and revenue redistribution of the capitalist mode of production—normalized the reproduction of massive wage labour, this came about by violence, war, conquest, plunder, robbery, piracy, widespread oppression. The substitution of economic compulsion for direct physical violence does not change the unjust nature of the process, all the more so because economic compulsion itself cannot function durably without the periodic intervention of physical repression.

What was true yesterday would also be true tomorrow. No large-scale reintroduction of a real labour market in a socialized, not to say socialist commonwealth would be possible without economic and political compulsion against the mass of producers. As long as these were all guaranteed an adequate average level of consumption—the satisfaction of all basic needs and a growing level of comfort and culture—neither the means nor the incentives would be available for providing the ‘required material means’ for capitalist ‘free entrepreneurs’, operating with wage labour, as opposed to individual entrepreneurs working with their own hands.

No ‘socialist police’ would be necessary to ensure that rule. In a socialist commonwealth, a sum total of social institutions and values would of course strongly condition people against the pursuit of individual enrichment. But the strongest safeguard would be the actual power of the free associate producers over all the production units manufacturing means of production, their a priori decision to guarantee a decent minimum income (consumption level) to all. Would-be capitalists would have to offer wages substantially above that guaranteed annual income. There wouldn’t be many offers; there wouldn’t be many takers. Only if you destroyed that freedom from want for the great majority would you assure the freedom for a few entrepreneurs to have a large number of wage labourers.

Is this ‘majority despotism’? You can call it that if you want to, as you can call all majority rule ‘despotic’ from the point of view of the minority. But the ‘hardship’ imposed upon the would-be capitalist entrepreneurs would be mild, to say the least, compared with the hardships that capitalism imposes on the unemployed and the poor. They too would enjoy the guaranteed standard of consumption. They would just have to forego some additional luxuries. They would also be masters of more and more free time, which they could use for any form of individual or cooperative activity—including production—in which they wished to engage. As the alternative despotism of wage labour, with its disruptive and destructive logic, imposes much graver hardships on much larger numbers, ‘majority despotism’ certainly appears a lesser evil in the search for a just society than ‘minority despotism’, including market despotism.

Money, Consumer Satisfaction and Social Priorities

Nove maintains that market relations could only be eliminated for social services and a few homogeneous goods like water and electrical power (p. 102). He ignores our argument that they could likewise wither away for all goods whose elasticity of demand is falling towards zero or has even become negative. The fact that there are dozens of varieties of bread, or hundreds of patterns of socks, does not make overall consumption of these goods less predictable in the light of existing statistical evidence. And if their output no longer takes place for profit but is based upon consumers’ choices and orders—with public and contradictory quality control in addition—the result will be much greater consumer satisfaction and variety than are current under the market system. We can give many reasons for this; we shall concentrate on a few.

First, under a commercial system, distribution costs are artificially blown up at the expense of the consumer, by the fact that the various intermediaries each interpolate their profit margins and that advertising costs—whose effect is very often to mislead, manipulate and frustrate the public—are imposed on the consumers too. Recently, the Belgian Trade Association of hotels, restaurants, cafés and bars (horeca) admitted that in a cup of coffee costing 35 francs ($1.00) in a bar the price of the actual coffee was only 0.5 francs, i.e. 1.5 per cent. Reducing the distribution costs to the material outlays and the consumer income of those occupied in that sector would make possible a substantial increase in distribution units, much easier access by individual consumers to these outlets, and a greater feedback between consumer wishes, distribution access and production variety than under the profit system, at less cost to the community.

Second, under the profit system, it is not the average cost but the margin of profit which determines whether a good is produced or not. Nove imprudently takes up the question of the publication of New Left Review—i.e. of the freedom of the press—which ‘requires the acquisition and use of material inputs, means of production that have alternative uses’ (p. 102). But surely if the state can today decide a priori to devote 6 per cent of its resources to the production and administration of arms, or if in Nove’s ‘market socialism’ the collectivity decides to devote x or y per cent of national resources to education, health, public transport, public housing, etc., why should the allocation of resources for a free and varied press be left to the market? Why can’t the community decide a priori to devote say 0.5 per cent or 1 per cent or 1.5 per cent of the available resources to ensure that there are enough print-shops, printing workers, newsprint and newstands to give every set number of consumers the daily, weekly, monthly papers of their choice—with this set number much lower than under present commercial circumstances, in order to make possible much greater diversity (plurality) of the press than exists today? The alternative is precisely a growing curtailment of press freedom through centralized control, by either big capital, the state, or both. A couple of years ago, the implications of the market system for the freedom of the press were ominously illustrated in France. A decline in the print-run of hardly 5 per cent by one of the world’s greatest newspapers, Le Monde, threatened to deprive more than one million people of their preferred daily reading. Was that really the best way to ensure consumers’ choice and diversity?

Third, under profit-oriented market production, monopolistic or oligopolistic firms often have an interest in substituting the output of one commodity for another, if the second one promises to increase profits, regardless of consumer preferences, and even if the first commodity is still profitable. So the consumers might see themselves deprived of a wanted commodity just because it is no longer produced. This is what has already started to happen with the move from long-playing records to Compact Discs.

It is rather significant that neither Nove nor any other of the proponents of ‘market socialism’ has much comment to make on the inevitable tendency of market competition to cut out the weakest competitors, i.e. to lead to monopoly, which in turn leads to competition between the monopolies on a higher level, which in turn leads to even larger (today essentially multi-national) monopolies. These processes of concentration and centralization of capital have regularly accompanied the development of market economy since the days prior to industrial capitalism, i.e. for at least four hundred years. Can that practical experience of ‘actual existing market economy’ be dismissed out of hand? [6] It is just not true that market relations ensure greater consumer sovereignty in a richer community, once basic elementary needs have been satisfied. The very opposite is the case.

Nove again and again makes the point that ‘money . . . provides an indispensable measuring rod, for assessing . . . the intensity of wants’ (p. 103). But does it really? Even from the individual’s point of view, the proposition is dubious, to say the least. If one spends additional income on a more expensive holiday rather than on a piano for one’s child, this is a function of many factors, in which the cost of production of different goods plays rather a key role.

If the proposition is already dubious at a micro-economic level, it is thoroughly wrong from a macro-economic point of view. As long as purchasing power—aggregate demand—is unequally divided, output will go where the more money and the quicker profits are to be found, not where want is more intense. Surely, nobody will seriously argue that the need for second residences is more intense than the need for housing of the homeless. Yet second residences (and luxury houses) are built on a large scale, while there are still millions of homeless in the richer countries, not to speak of the rest of the world. And what about the ‘intensity of need’ for food among the Third World’s hungry people, as against the need for a second television set or home computer among the affluent middle classes of the West? Yet far more resources are devoted through market mechanisms to satisfy the latter need than the former.

If the proposition is wrong in macro-economic terms, it is even more wrong from a macro-social point of view, which aggregates all social costs of certain allocation choices imposed by market forces, and their implications for various simultaneously existing wants, i.e. raises the problem of social priorities. Here, money is not a rational measuring rod—unless we accept the ultimate inhuman logic of monetary ‘cost-benefit’ analysis, by computing the ‘value’ of the lives and deaths of thousands of human beings based upon the capitalization of their future ‘earnings’ (including those of children whose future professions are still unknown!).

The most devastating example in that respect is the privately owned motor car which, as a means of transport between home and workplace, home or shopping centre, is a source of economic waste of monstrous proportions. [7] Here you have a fleet of tens of millions of cars with four or five seats, but which only transport one or two persons each, which do not run more than one to two hours a day and obstruct our cities for eight, nine or even twenty-two hours, making traffic slower and slower if not paralysing it altogether, and simultaneously polluting town and countryside under an increasingly murderous cloud of poisonous exhaust. In addition, this irresponsibly and unprofessionally conducted fleet is an instrument of mass murder on a scale only comparable to big wars. In fact, in the last three decades more people have been killed and maimed worldwide by the motor car than in the whole of World War I! [8]

Would it not be preferable from a macro-social point of view, to have the thoroughfares of all cities covered by a fleet of small buses passing, say, every three minutes, which would guarantee all prospective passengers a comfortable seat and reduce parking problems and pollution to ten per cent of today’s levels—especially if they were electric buses—and would reduce energy expenditure by the same order? And would not such a needs-satisfying system cut across the so-called ‘acquisitive instinct’ if it was free of charge for all citizens, i.e. if the community decided a priori to allocate two or three per cent of its available resources to guaranteeing that free service to all? How many people would, under these circumstances, still buy private cars and pay privately for petrol? You wouldn’t need any ‘police’ to ‘forbid’ such purchases. Cost comparison for the consumer would do the job for for the majority, and prohibitive parking tickets would also contribute.

Even if this was accompanied by diseconomies of scale in the output of buses and cars, and even if publicly owned factories were micro-economically less efficient than today’s private auto corporations—an assumption which we do not consider proven at all—the overall results from this radical reduction in the daily mad rush towards polluting immobility would still imply a huge saving in material resources and human lives. Consumer satisfaction—i.e. need satisfaction—would be on the rise. Money would play exactly the opposite of the role generally attributed to it: that of a deterrent, not a stimulant. Again: by what right would any tyrannical advocate of ‘market socialism’ forbid a community to decide by majority vote in favour of such a free, comfortable and efficient public transportation system, administered in a largely decentralized communal way, and needing no pyramidal bureaucracy whatsoever, or certainly far less than the huge monopolies of today?

Utque Tertium Datur!

Contesting that there is a viable and desirable alternative to both bureaucratic centralization and ‘market socialism’, Nove rejects the ‘tertium datur’ on the grounds that centralized allocation of resources (essentially material inputs) is unavoidable in a contemporary economy: ‘Even quite simple products require large numbers of sometimes highly specific inputs, and how can one ensure that the meetings of delegates in respect of each of thousands of inputs result in input–output coherence, without a hierarchical pyramid of authority—unless inputs can be purchased and the pyramid rendered unnecessary? Alas, tertium non datur.’ This is just a return to square one, as if all the previous discussion had not taken place at all.

In the first place, the market does not automatically lead to ‘input–output coherence’. Overcapacities and scarcities exist side by side periodically. The latter explode into booms, the former into busts. Economic fluctuations, tied for two centuries to the ‘actually existing market economy’, are proof of huge ‘input—output’ incoherences.

In the second place, most of the ‘thousands’ of inputs are not dependent upon price fluctuations. ‘Purchasing’ is only formal, not choice determining. Inputs are made to order, generally with no price competition at all, and are dependent on previously established technical specifications. Only in the case of grave failure (bad quality, non-respect of delivery times, flagrant overcharging) will there be any serious dispute.

In the third place, central allocation of resources—which is indeed unavoidable—is not identical with detailed allocation, as little as decentralized allocation is identical with allocation as a function of price fluctuations, i.e. through the market. Nove does not answer our argument that articulated self-management is perfectly possible. A national (or international) congress of delegates only has democratically to decide what part of gnp is devoted to each of say twenty or thirty key industrial-social branches, choosing between different coherent input–output variants. [9] Then it delegates more detailed planning of, say, the steel or leather industry or education to representatives of these industries and services gathering in other congresses (including consumer representatives). These then delegate still more detailed decisions to regional, local and enterprise councils. Alternative demands on limited resources are neither ignored nor hidden. They are democratically settled at different levels. No rigid hierarchic structures arise from such institutions. This expressly guarantees producer/consumer sovereignty—i.e. self-determination, freedom in the real sense of the word—against both the tyranny of blind market forces and the tyranny of arrogant technocrats or bureaucrats. Surely this is entirely feasible? [10] Would it lead to excessive politicization? Perhaps. But politicization in a free society, with political pluralism, free access to the media, constant publicity and public control, is certainly a lesser evil than huge waste as a result of massive unemployment or bureaucratic mismanagement.

Alec Nove’s belief in the need for ‘market socialism’ arises in part from the idea that the self-administration of citizens in a complex modern economy is somehow unrealistic. But the socialist argument for self-administration presupposes ancillary social conditions not considered by Nove: freely available higher education, a radical shortening of the working week, a diffusion of information technology among groups of producers and consumers, wide access to the media of communication. Conflicts of opinion and interest would no doubt still arise but that is why socialists must be committed to a pluralist democracy.

The issue becomes clearer if we go back to the basic definition of exploitation as institutionalized inequality. The proponents of ‘market socialism’ generally concede that market relations will systematically generate inequality; indeed in the Soviet Union and China today are to be found advocates of marketization who proclaim the necessity of inequality, often doing so with even less qualification than Alec Nove. In the final analysis exploitation means that many have to work long hours so that a few can consume more and live better. The majority have to be coaxed into consenting to exploitation. If they gradually see through the coaxing, they have to be coerced. If they end by rebelling against ‘purely economic’ coercion, then they have to be persuaded by extra-economic coercion. That is how the state arises in the service of exploitation. So we can conclude with a warning. Some opt for ‘market socialism’ out of ferocious opposition to bureaucracy. But they are fated to end up reinventing the state as an apparatus of repression, set apart from the mass of citizens. Those who believe that the withering away of commodity production is utopian, will find themselves forced to conclude that the withering away of the state is utopian too.

Of Human Freedom

Here we are back at the heart of the debate. It is our contention that this essentially concerns not the greatest possible economic efficiency (is that measurable at all, without a much more precise definition than economists generally offer?) but the greatest possible human freedom, or emancipation from externally imposed constraints on individuals, whether these are economic or political or socio-cultural. It is a debate about self-determination as the goal of human existence.

It is self-evident for us that without satisfaction of the basic human needs for all, freedom and self-determination are impossible. Economic efficiency as a means to guarantee the satisfaction of these basic needs without distinction or discrimination, therefore makes perfect sense within that conceptual framework. But as a permanent goal of human endeavour superimposed upon all other considerations and motivations, it becomes irrational and increasingly self-defeating.

So the real debate turns on this precise question: once basic needs are satisfied, should the goal of the greatest possible economic efficiency, regardless of its individual and social costs, continue to reign supreme, or should it be subordinated to such goals as a radical reduction of the working week (the working time during the whole adult life), a radical reduction of the social division of labour between administrators and administrated, an explosive expansion of creative leisure, the safeguarding of the natural environment, the struggle against physical and mental afflictions, etc.?

Those who contend that all this is utopian are in reality saying that humankind is condemned to submit to the tyranny of ‘objective economic laws’ and social inequality under whatever circumstances. They add that a refusal to accept these constraints would lead to unacceptably low standards of need satisfaction. This is just a rehash of the superstition of original sin. Linked to that prejudice there is the myth of the homo oeconomicus, which is nothing but an attempt to generalize for human existence throughout time and space what is the behavioural pattern of competitive bourgeois (big ones and small ones), acquired relatively recently in human history. There is no scientific basis for such contentions.

‘Marxian socialism’ as both Nove and myself understand it means just that: the emancipation of the freely associated producers from the obligation to use material and human resources according to some ‘eternal economic laws’. It is a society in which these producers/consumers freely determine their priorities, social as well as economic. If they want to forego the second television set in exchange for more leisure or less strenuous and less monotonous work, they have the perfect right to do so. Nobody should dictate these preferences to them, neither markets nor experts, nor scientists/philosophers, nor charismatic leaders, nor parties, all of whom history has proven to be anything but omniscient. But they should have the right to make these decisions freely, by the light of their own consciousness and sensibility. That is what human freedom is all about. That is what socialist planning is all about. 

Notes

[1] All references to Nove are to Alec Nove, ‘Markets and Socialism’, NLR 161, January–February 1987, pp. 98–104. 

[2] The question of whether one should stick to the classical Marxist (even pre-Marxist) definition of socialism as a classless society without commodity production, or whether one should adopt the ‘reductionist’ definition which equates socialism and the disappearance of private property of the means of production, has been dealt with in our article ‘Bureaucracy and Commodity Production’, Quatrième Internationale No. 24, April 1987.

[3] Incidentally, these nearly always imply a substantial medium-term and long-term increase in the volume of output which has to be sold at the average rate of profit. Hence the dual nature of any adequate theory of crisis (of the business cycle), which has to examine not only value production but also profit realization, not only the value (labour quantities) stream and structure, but also the monetary demand (purchasing power) generated by that production stream and its class structure, and the proportionate (or disproportionate) relations between them.

[4] The Sunday Times, 28 February 1988, quotes the deputy chief justice of the People’s Republic of China, Lin Zhun, as stating that in 1987, 5,200 ‘traders of women’ were brought to trial—150 per cent more than in 1986—but that figure only represented a fraction of the number operating. So you have white slavery under ‘market socialism’, and to a growing extent! Is that surprising when the average wage is around £20 month, but the sellers of young girls from impoverished regions and strata into prostitution can get as much as £5,000?

[5] We just stress that independent producers and entrepreneurs are now down to less than 10 per cent of the active population in the USA, Britain and Sweden, and to less than 15 per cent in several other countries.

[6] Cases of monopoly are on the increase with regard to commodities which have to cover key social consumer needs—the contrary myth notwithstanding. Their implications and potential are ominous. Prof. M. F. Perutz, writing in The New York Review of Books, 3 March 1988, reveals that while in 1964 twelve firms made vaccines in the USA, by 1984 that number had shrunk to five. The contraction came at a time when advances in molecular biology were leading to the development of vaccines against malaria, hepatitis-B, cholera, and other diseases that affect the greatest number of people in the world, and when there is a desperate need for a vaccine to stem the aids epidemic. This near monopoly position has enabled the few remaining firms to increase the price of a vaccine against diphtheria, tetanus, and whooping cough from 16 cents to 10 dollars, a sixty-fold increase, using various excuses like the rising costs of litigation.

[7] The privately driven car is an instrument of autonomy (freedom) in the realm of leisure. But this function can be fulfilled by a fleet of cars not privately owned but put at the disposal of those who actually use them when they need them. This would still involve a big macro-economic reduction of resources devoted to that function.

[8] A splendid overall socialist critique of the private motor car is given in our friend Winfried Wolf’s magnum opus: Eisenbahn und Autobahn, Hamburg 1987.

[9] How such social priorities impose themselves even under capitalism is strikingly revealed by the current preparations for the ‘free common market of 1992’ among twelve nations of Western Europe. They concern among other things the establishment of 300 ‘internal market directives’ which will govern the daily lives and commerce of 350 million people, involving such different phenomena as veterinary controls, cosmetics, pesticides, cranes, the quantity of water, the depth of tread in tyres, lorry weights, toys’ safety, life insurance, car exhausts, asbestos pollution, mobile telephones, lawnmower noise, insurance regulations, educational qualifications, etc., etc.

[10] The computer age—i.e. the third technological revolution—greatly facilitates workers’ management: ‘In a manufacturing plant, you suddenly have information in the hands of the people who run the machines; it’s no longer reserved for people two or three rungs up the hierarchy’, Mr Eberle (Proctor & Gamble’s former vice-president of manufacturing) said. ‘The first-level supervisors don’t appreciate the power of this information until it gets in the workers’ hands. Then their resistance is enormous’ (International Herald Tribune, 15 February 1988).