Market vs, planned socialism

Andrew Hagen hagena at
Thu Nov 10 01:48:41 MST 1994

On Mon, 7 Nov 1994, Justin Schwartz wrote:

> [...]
> a. It's not undemocratic to discuss how a hypothetical system would work.
> [...] But to discuss in detail what might be on
> the menu is not to limit the choices.

Right. But it's rather hard for me to just produce a "model" of my
proposed "system" as antithesis to capitalism when nothing like that
exists, other than what you're advocating.

Furthermore, one point which I'm trying to advance is that coming up with
a model or a system is antithetical to the process of overcoming the
hegemony. Not only are models useless in particular social/cultural
contexts but also they have great difficulty adopting to new historical
contexts. For example, capitalist economics. From Smith to Ricardo,
Marshall to Keynes, Friedman to Galbraith, the models had to be revised

Instead of setting up boundaries to what is possible, which is what
models do when they make assumptions about the contexts of their
applications, we should attempt to tear down the walls of impossibility
that limit our choices. For example, instead of seeing scarcity as a
given, create ways of eliminating it. Find ways to overcome problems of
centralization vs. freedom. etcetera.

> b. A main obstacle to radical organizing today is that ordinary workers
> who are dissatisfied with the way things are do not see a feasible
> alternative which would be better. [...]


> Answering these questions requires modeling, precise, specific, and, yes,
> abstract characterization of your preferred alternative, and argument that
> it would avoid the problems with Stalinism and capitalism.

Why? If we desire rule by the proletariat, are we going to demand that the
proletariat comes up with feasibility studies before implementing their
"dictatorship?" (which of course, would not really be a dictatorship since
it would be rule by the proletariat, which is by definition many people

> Of course, once
> drawn into the process, ordinary workers will suggest or demand
> modifications in the models. But no one will even consider alternatives
> to capitalism unless these are placed on the table in enough detail to
> have a sense of their dynamics, advantages, and disadvantages.

Ok, ok, here's my "model": replacement of property rights with property
charters; abolition of the division of labor; making holidays of voting
days; reducing the terms of elected officials; increasing the number of
issues decided upon by referenda; guaranteed allowance of a particular
standard of living to every person; new cultural, historical, social,
economic, and political contexts wherein culture assumes the roles
previously played by the others; challenging of most intellectual
traditions; and reparations to women and persons of color, and other

> 2. Tom and Andrew both think that markets cannot be honestly regulated by
> the government, that they "naturally" tend to take over the state and
> prevent any restriction on profitability.

Well, maybe I was wrong. There probably is a possibility, however slim,
that one day capitalism can be reformed to such a great extent that it no
longer needs changing.

> c. Tom and Andrew both hold up an idealized and unspecified democratic
> planning in opposition to the problems they see with MS. It is presumed
> without argument that no groups in DP will have an anti-social interest
> and that democracy in DP is unproblematic and will fix all problems. Of
> course this is all false.

Of course I disagree.

> The planners, to start with, have an interest in
> their own power and prestige;

Automatically? In every possible context?

> they may favor regions or ethnicities they
> like, never mind family, and will be further corruptible by both the
> managers in important industries who misappropriate parts of their product
> for their own ends and by wealthy participants in the black markets which
> will burgeon in response to planning failures.

You assume that there will continue to be "industries," and that there
will be a need for black markets because of planning failures. Why won't a
planning failure engender a new method of planning, instead of reversion
to the dead, old system of markets?

> Andrew claims that democracy guarantees that there will be no black
> markets, but fails to see that even if the popular will is clearly
> expressed, the calculation problem raises questions about whether it can
> be implemented. The Mises-Hayek critique is thus a difficulty for
> democracy under DP.

Again, I'm unfamiliar with the MHC. But how significant is the critique?
Does it not assume that societies to survive must have X and must have Y,
and thus because of their reductionist proofs this is impossible under
their pre-conceived notions of planning, which undoubtedly covers all
possibilities of planning regardless of the fact of the futility of wisdom
especially in an age so filled with lies about human history, because
there is no way to have both X and Y? Maybe it does better than this, but
I'm quite skeptical.

The problem with assuming *anything* other than its opposite relation to
capitalism about "planning" is that you then must assume that the
revolution is just not going to go too far. But it _is_ going to go very
far if it is to be successful.

> And finally, expressing the popular will is not so
> easy.

Democracy does not require the concept of "popular will." Better
concepts will emerge.

> 3. Andrew worries about Keynesian measures in MS. Will there be business
> cycles? Can they be offset by countercylical financing? Where does the
> government get the money? Won't printing money be inflationary? How bad is
> that anyway? These are good questions, pitched at the right level of
> detail for discussing models of socialism. I wish pro-planners would
> specify their models in enough detail to allow such questions to be asked.

Me too. It is difficult to come up with such "models," though, when you
demand that our models meet particular criteria unrelated to their
possibility of success.

In sum, I'm all in favor of market socialism. I feel, though, that it is
at best social democracy on steroids and thus it is not my top choice.

Andrew Hagen                              hagena at
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