R48G: the issue of markets, planning and a socialist starting point

Source: Ernest Mandel: In Defence of Socialist Planning (September 1986)

We linked to this already today and it is invaluable to have a critique by someone like Mandel of the trend toward ‘market socialism’ that arose in the wake of the ‘calculation debate’ ignited by Von Mises and which was critiqued by a whole series of socialist counterarguments in what seems in retrospect something of a stalemate. A good example of the genre is:
The Economics of Feasible Socialism Alec Nove

Click to access nove91.pdf

which Mandel discusses at length.
A useful summary is Marx to Mise by Steele, a book that seems to be overwhelmed by the question and not quite able to counter the Misean legacy.

It is interesting that Mandel attempts to argue with Nove, not Mises, et al.
But I have to wonder if anyone has arrived at answers here but overall the capitalists claim to have won the argument and we have lived in neoliberal land since the time of Hayek et al, who spring directly form the Misean attack, which was a timely (1921) counterattack in the context of the Russian revolution which coincided with this introduction of the whole, partly sophistical but also in part cogent, Misean argument about markets. Mandel’s excellent critique of the socialist responses to Mises, viz. market socialism. Given the nature of Mises’ prediction and the outcome of bolshevik economic madness/idiocy, it is not surprising that socialists have been on the defensive, and almost nettled by the play of sophistries. That neo-classical economic theory deserves an equal share of critique, if not ridicule, but clarity tends to be lost in the confusion of debate (mastery of the field with its mathematical confusions is almost impossible using the texts of the subject, cf. e.g. Krugman/Wells and their college textbook(s) ). That equilibrium theory was in part the invention of socialists is a further irony. It is fair to say that all parties are confused to some degree. But a defense of planning by Mandel is entirely apt in the seeming partial rout that produced so many leftist students of market socialism.
The scale of the problem is mind-numbing:

How many small businesses are there?In 2010 there were 27.9 million small businesses, and 18,500 firms with 500 employees or more. Over three-quarters of small businesses were nonemploy-ers; this number has trended up over the past decade, while employers have been relatively flat (figure 1).

To bring planning to this is an olympian task.
A pioneer in the computational economics sphere is Cockshott’s classic:
Toward a New Socialism

Our own view is a mixture of paired opposites: our ecological socialist ‘Democratic Market Neo-communism’. This perspective says that we must do four or more things at once:
resolve the political question, resolve the market/planning question and resolve the nature of expropriation, demanded from the revolutionary (or even electoral) left: the creation of a Commons, which is different from state capitalism.
Our model does not fully resolve the economic question but creates a mixture of both planning and market sectors that can construct a new form of communist system where markets coexist with planning, but with post-capitalist corporations that license resources from the Commons. Properly realized such a mixed system has a larger potential than one pole of the dilemma. We can see a broad field of planned economics, and a parallel field of modified market entities. And a possible third ‘anarchist sector’ below an indifference threshold allowing small scale entities free to do as they please. The mixed system as noted is like a reserve genome of social dna and moves into the future but still preserves its historical forms (in the third sector). This system is different from market socialism.
It is a seemingly contradictory/dialectical combination of opposites that must mediate themselves with checks and balances, and experimental trials of potential solutions. Noone has that solution yet.
The nature of an international remains as a further challenge where this DMNC model attempts first a ‘socialism’ in one country and doesn’t as such or at first attempt the immense problem of global system which would immediately become a reverse socialist imperialism (??).
It is hard to know exactly how this would play out but we must suspect that its strong control mixed with flexibility could stage the kinds of experiments that would evolve to a solution the problem that has bedeviled the left from the time of Marx. Failure to define some kind of workable system has put the socialist left into the limbo it finds itself in.
But the situation is rapidly changing: the claimed victory, in part sophistical, of the Misean wing and the neo-liberals is proving pyrrhic: we now face the reality even if we can’t solve the problem of socialist economics we will have to anyway: the capitalist system is producing devastation and will end by destroying a planet. And the further peculiar situation has arise of rightist/fascist/ irrationalism that simply denies the issue of climate calamity on its way: the ideological hold of capitalist ideology is proving to be a form of near psychosis. So we have to trot out the whole flea market of socialist ‘told you so’ but still clunky economic ‘solutions’ to postcapitalist inevitability.

The ecological DMNC is designed to be able to remorph a liberal system into a (neo-) communist (we can hardly use old terminology of Chinese, North Korean, etc, monstrosities monopolize the terms) one and then proceed with enough probable viability to start to allow thence experimental upgrades, a sort of permanent revolution. It is not simple matter to deal with such complexity even if we begin to suspect that the planning option has some resolution, viz. technological, computational, and soon AI angles of attack.

Our solution with three sectors (and a double political system with both democracy and strong presidential authority, the latter however a revolutionary party to guard the Commons,but few other powers) (cf our various manifestos) allows both centralization and distributed powers of economic control and let go, and while it remorphs a liberal system is also open to many of the goals of classic left discourse, e.g. worker cooperatives, etc… But in a Commons worker cooperatives can control but not own the resources they use, etc…
This kind of system can start immediately, today/tomorrow and then inch its way forward.
It has strong control and an anarchic side, planning and a new kind of market, ecological imperatives and associated ecological courts and law and many possible versions of ’emergency mode’ alternates. It must satisfy the demand for a robust economic populism with economic rights to employment, health care, housing, etc…
Noone has found a solution to the economic question but this DMNC can with confidence stage a beginning evolution that is functional day one toward a more sophistical outcome.
Noone has won the arguments here and we can’t expect to be able to fully resolve but we do have a plan/procedure and revolutionary (or evolutionary) project to set in motion, one that can reconcile many opposites in a pressure cooker of social equalization moving from the relative starting point of mixed opposites…

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