Hi Paul, Paul Cockshott wrote: >> Joseph: >> That's not exactly true. There is buying and selling between factories > >in your system, but because it takes place as accounting entries kept > >track of by a central authority, you think it isn't real buying and > >selling. But in fact, since the economic accounts kept with these > >accounting entries determine what happens to the factories, including > >whether they stay open, it has the same economic effect as real buying > >and selling. You rename the economic entities as "projects", and you > >merge the central bank with the planning authorities, but real buying > >and selling exists. ------------------
> Paul: > The key difference is that we assume that labour credits are non > transferable and can only be held by workers, not by any other > institutions, and the credits are cancelled when they are redeemed for > goods from the state retail network. The other institutions have accounting entries which are measured in labor values. That's clearly pointed out in your book. Therefore it is an evasion to say that other institutions don't have labor credits. They have labor credits, only they call it by another name: accounting entries. > Since the labour credits do not circulate they are not money, and > without money circulating there would be no commodity circulation. The enterprises or projects have a budget denominated in labor values. The amount of their labor credits is recorded as an accounting entry in a bank-like institution. Any time the enterprises or projects employ labor or obtain raw materials or machinery, the appropriate labor value is deducted from their account. If the enterprises exceeds its budget, it may be terminated. > The projects we propose are not able to hold credits, > and have no account into which > credits are transfered when goods are produced. Really? Let's see. According to "Towards a New Socialism", the accounting agency checks whether these projects are "cost-effective" ( p. 182) Doesn't it do this by comparing the labor values of the goods and services produced with the amount of labor values expended during production? It uses "a rational system of economic calculation" in which the national budget is balanced in terms of labor values. (p.182) That means that it may decide to subsidize an important project which is losing labor values (using up more labor values than it produces). But overall, the basic criterion is that the total expended labor values should equal the total produced labor values. > Statistics would certainly need to be held on the amount of labour used > by each product, and the amount of produced inputs and other resources > used by the project to produce its output. On the basis of these > statistics, the planning agency would be able to decide whether it was > advantageous to the economy as a whole to continue the project, expand > it, or close it down. But the amount of labor used by each product (its labor-content), and the amount of produced inputs and other resources used by the project to produce its output, are the same thing. The labor content of a product is measured by by the labor content of all the inputs that go into producing it. The only way these two things could differ is if the planning agency, when it talked about the amount of labor used by each product, meant the *socially- necessary* amount of labor. That is, it meant, not the labor actually used by the particular enterprise, but, say, the average amount of labor used in producing this product, averaging all over the projects who produce it. What all this works out to is -- the enterprise actually is credited with the labor values of its outputs. It is this which is compared to all the deductions that are made from its budget for the various inputs used in producing the product. This compares the socially-necessary labor content with the actual labor used in the particular enterprise. So, in a somewhat indirect way, the projects really are credited with the labor values for what they produce. Now, suppose the project uses up its budget and goes into debt. You write that "Since the project is in no sense an economic subject (i.e. a subject of proeprty right), the issue of bankruptcy cannot arise." But you then go on to describe that the project may be closed down, unless of course the planning agency decides in effect to subsidize it. You don't use the word "bankruptcy", but you describe bankruptcy. You don't use the word "subsidize", but you describe subsidizing the project. > > In a capitalist economy the results of sales and purchases determine the > solvency of firms and ultimately whether they expand or close. A > socialist economy also has to make analogous decisions about expanding > and contracting activities. It needs some form of cybernetic feedback. > But just because a cybernetic mechanism exists, and that one effect of > buying and selling in a capitalist economy is to provide a cybernetic > mechanism, does not make all cybernetic mechanisms the same as buying > and selling. The cost-balance determines whether someone stays open or closed. The accounting entries are denominated in labor-values, which means that they are close to ordinary financial prices. The fact that you provide an indirect mechanism for registering the buying and selling doesn't mean that it isn't buying and selling. > > We suggest that the basic control mechanism of a planned socialist economy > should, with respect to internal flows, be a system of in natura calculation. There is some planning in kind in the system you propose, but it is not the basic control mechanism. Instead, its completely integrated with financial methods. Even Western capitalist economies may integrate a certain use of input- output methods with the usual financial methods. For example, a simple introduction to the use of input-output techniques is available in Miernyk's book "The Elements of Input-Output Analysis" (http://www.rri.wvu.edu/WebBook/Miernykweb/new/index.htm), which, among other things, refers to its use in various Western capitalist countries. And indeed, such methods are now routinely used for certain purposes by capitalist economists and various capitalist agencies, including the World Bank. This is especially important to note because effective environmental regulation and planning will require a good deal of planning in kind. But the implementation of such planning won't mean that the economies concerned have become socialist. This is important, because it is crucial that the working class maintain the maximum pressure on these agencies, rather than regarding them as inherently pro-worker or socialist. Moreover, "Towards a New Socialism" continually reverts to the usual financial measurements and financial methods. When one uses aggregate financial terms in input-output tables, these are not measurements in kind. Even the late Professor Leontief noted that. These terms are the usual financial way of aggregating together two things that differ in kind, such as wheat and steel, by adding together their financial value. If one adds together their labor values, it's also basically a financial measure. The abstract labor hour, which is what the labor values of products is measured in, is not a measure in kind. It combines together qualitatively different things, just as money does, rather than keeping track of them in kind. And the labor theory of value shows that measurement in abstract labor hours and pricing things in dollars are, at bottom, the same. And if anything, you have been arguing that the labor value and ordinary financial prices are even closer than what others say. Again and again, in "Towards a New Socialism", aggregate financial terms are used, slightly disguised by being measured in labor values. Thus there is the the "Gross Value Product" of the economy,the "Net Value Product", the (total) "Depreciation", etc. (Ch. 7, p. 90) These aren't measurements in kind. > This could either use Kantorovich's algorithm, the Simplex algorithm or > some interior point algorithm like our 'Harmony' algorithm. Kantorovich's methods require financial terms and "shadow prices". The point of his method was to find the proper shadow prices that would make enterprises seeking profitability do what the planners wanted. > But all of these depend on the existence of the 'plan ray', or a > Leontief final consumption function which the planners optimise subject > to constraints. The question then is how does the planned economy arrive > at its plan ray. We say that in par this can be done by political > decisions, with the public as a whole voting on it. I presented a paper > with Karen Renaud last year to the BCS conference showing how such > voting could be arranged (http://eprints.gla.ac.uk/25753/1/25753.pdf). > But such votes can only handle the broadest outline of resource > allocation within the economy : how many working hours per week do you > want to allocate socially to education, health, defence, scientific > research, providing for the retired etc. Actually, one has to allocate raw materials, machinery, and so forth, as well as the amount of labor. And of course, the labor values in the your system are used to measure raw materials, machinery, and so forth. The budgets which projects or enterprises receive measure in labor-hours the raw materials, the used-up machinery, and so forth. Thus the budgets are not set in kind: they are set in aggregate terms, essentially in financial terms. > If one is to arrive at a detailed consumer goods bundle, we think that > information on the purchases of different types of consumer goods is an > essential source of information, and it is vital that the mix of > consumer goods production is adjusted in line with actual purchases. With regard to consumption, "Towards a New Socialism" introduces all the well- known capitalist features such as tax and rent. > But this only requires a single agency able to perform sales - a state > retailing network, and a single class of agency able to make final > purchases : the individual consumer. In your system, there is the state and the consumer. On the grounds that supposedly the state can do whatever it wants with its property, there is no serious consideration to the relationship between different state enterprises, or the actual economic limits on state action. For example the book states that the state "can never really run short of labour tokens..., since these are simply accounting entries created in the name of the workers (or possibly in the name of the commune of which the workers are members...)' (p. 92) So here is a basic idea of the book: the state can do whatever it damn well pleases. But of course, that's only true in the sense that I can walk anywhere I like, even right across six lanes of freeway traffic--I could do that, but it would be the last thing I ever do. Similarly, the state could print as many labor tokens as it likes, but if it does so, they won't really represent the amount of labor-hours worked. Well, you sort of recognize that. The book goes on and states that "There is, however, a real issue of macroeconomic balance. If sufficient consumer goods are to be available to meet the demand forthcoming, without an inflationary depreciation of the labour token, the state must ensure that it claws back (in effect, cancels out) the right proportion of the tokens it issues to the workers in the first instance." (p. 92) But you don't see that this means that the state isn't really free to issue as many labor certificates as it wants. Legally the state can print whatever it pleases. But economically, it has consequences. Legality is everything for how the economy is described in "Towards a New Socialism"; the underlying economic reality is nothing. Or it's just a technical correction, a matter to be handled by clever administration. Legally, workers are given labor certificates whose value is worth exactly the amount of labor they have done. I presume that this is a very important principle of the system. It is a symbol of the moral superiority of the new system over capitalism. Unfortunately, however, this means that there is no economic surplus left for things other than immediate consumption. Therefore there have to be taxes, and the book discusses income tax, ground rent, excise tax, etc. So the worker doesn't really receive labor certificates to the value of one's labor. That's because the state, which gives the labor certificate, takes so much back in taxes. What's the difference between getting a 20-hour labor- certificate for 40 hours of work, or getting a 40-hour labor certificate for 40 hours work, but having to refund 20-hours worth through taxes? The difference is that one preserves the legal fiction that one has received labor certificates equal to the total labor that one has done. The paper legality is everything; the reality is nothing. Finally, you repeatedly make use of the distinction between the producers of goods, which are state enterprises, and the consumers, to say that the various capitalist categories that appear in the book are all restricted harmlessly to consumption. But in fact, not all the producers in "Towards a New Socialism" are state enterprises. There are also communal enterprises, and the self-employed. This means that there has to be a method of exchange of goods between all three sectors (state, communal, and individual producers), and this exchange has to include the means of production used by the communes and the self- employed. Thus, "communes may own buildings and those means of production that are suitable for domestic production". (p. 155) Indeed, depending on how communes are organized, "the labour performed by commune members is treated as the property of the commune" (p. 152). The commune will then issue its own labor cerificates ("work-units"), which may or may not exchange at par with the national labor certificates. They may also "rent land from the public land agency", and they "must be able to enter into contracts to supply labour to the national economy" (p. 156) Indeed, the state may even subcontract out whole enterprises or projects to the communes (p 156) Thus, in "Towards a New Socialism", labor values become a general form of money for binding together the three sectors of the economy that produce goods and services. This is very much a picture of what happened in various state-capitalist economies, only labor-values are used rather than ordinary money. -- Joseph [email protected] _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
