Market socialism--a question for Proyect et al

Robert Peter Burns rburns at
Wed Nov 8 11:31:32 MST 1995

A question for Louis Proyect and other supporters of a
marketless socialism: what's your response to the following
post <I sent it awhile back to the Progressive Economists
list when Louis launched a short-lived and abortive attempt
to critique market socialism.  Louis didn't answer it then,
will he or someone else step up to the plate this time?>

Peter Burns SJ
<hey, I am a Scot--why am I using baseball metaphors?  I've
obviously been living in the USA too long.>

> Market socialists are NOT against planning things like water,
> sanitation, education or health care.  Nor are they against
> planning in the areas of energy provision, transportation
> systems, or environmental protection.  Nor are they against
> economic planning more generally, especially to combat
> unemployment.  Most market socialists
> are in fact IN FAVOR of quite extensive planning.  Nove is
> one example.  David Schweickart is in favor of planning
> the aggregate level and composition of investment across
> the whole economy.  Even John Roemer is on record in his
> latest book <A Future for Socialism, Harvard, 1994> as being
> in favor of investment planning, not to mention planning
> in the traditional public sector areas. <I don't favor Roemer's
> model of socialism in general for other reasons, but it would be
> false to say that he is against planning>.
> What market socialists generally want to avoid, though, is
> a totally planned economy without any significant function
> for market pricing or individual enterprise autonomy, an
> economy in which everything from shoes to toothpaste tubes
> to machine tools to eggs, and all intermediate inputs, and all
> incomes, are planned prior to actual production by an
> overarching planning authority.  Not because it is
> theoretically impossible for such an economy
> to produce a desirable amount and assortment of goods and
> services, but
> 1> because *in practice* the information needed
> to plan with this aim in mind is difficult to collect
> and coordinate without the use of market prices,
> 2> because relative demand for varied goods and services
> is constantly changing, and planning processes can't keep up
> 3> because it is hard to calculate costs in a non-arbitrary
> way without market pricing--how do you decide how to cost
> shoe leather, and how do you decide what to pay shoemakers,
> while simultaneously deciding all other costs and incomes
> and 4> because, most importantly of all,
> without some element of competition and some element of hard budget
> constraints, producers face little effective incentive to economize
> on inputs while meeting output targets.
> What if actual production fails to meet plan targets?  Suppose
> the shoemakers fall short of their planned production targets,
> or meet them but at the expense of quality, variety, and so on,
> year after year, without any adverse income consequences for
> themselves?  Or suppose they do meet their production targets,
> but only by wasting an awful lot of shoe leather, and electricity,
> and tools.  This will create bottlenecks elsewhere in the economy
> --more trucks will have to spend more time on transporting shoe
> leather, and less time transporting other things; less electricity
> will be available for production elsewhere; more resources will have to
> be devoted to making shoemaking tools, with less available for other
> purposes.
> Now theoretically all workers might work conscientiously out of
> a sense of socialist solidarity and altruism--and I'm not denying
> that these motives are often possible to inculcate.  But is it
> realistic in practice to think we can *simply* rely on moral
> incentives?  Why not add in a profit-motive to reinforce them
> --what's so unsocialist about workers getting the profits, instead
> of capitalists?--until such times as we can progressively reduce
> the need for market distribution of shoes and the like, and make
> these things available to people in the same way that places
> like Scandinavia have made available things like education,
> health-care, child-care--that is, freely available at the
> point of delivery and financed out of taxation.  <In this
> way, more and more personal income would become an accounting item,
> appearing on paychecks but actually transferred to an ever-expanding
> welfare state.>  But in the meantime, we must proceed more cautiously.
> Let's incentivize workers to produce such things to the requisite
> degree of availability in return for enjoyment of the profits
> of doing so.  When shoemakers indicate that they want to provide
> shoes in the requisite amounts, quality and variety, for the same
> sorts of rewards as are available to public schoolteachers, nurses
> working in socialized health-care systems, officials working in
> government departments, etc, then that will be the time to abolish
> markets and commodities altogether.
> Peter Burns SJ
> rburns at

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