AskProfWolff: How to Make Central Planning Democratic 

Local planning excels in some areas, while centralized plan excels in others. It's impossible to move everything to local planning and still have a state capable of defending itself from capitalists, just as it's impossible to keep everything centralized without realienating the masses. Khrushchev was on to something, even if his execution lacked.

Workers councils + central planning is the way to go imo

I always found the distinction between planning and market a bit too stark and artificial. In a market the capitalists also make plans. Their markets are just much smaller than that of a central planner. But, especially, since capitalism has the beautiful tendency to make monopolies, the monopolies are much more like central planners. So a monopolist is also somewhat of a planner.

I would Love 💜 to see Dr.Wolff do a video on the: "Difference Between 'Industrial Democracy' & 'Workplace Democracy'.

Dear Dr. Wolff. I believe having a Centeral committee for ruling/planning is receipe for disasters and corruption. I suggest instead of having a long term Centeral planning we should consider most decision making for local and zone area and out of the coops we have equal number of male and female to go to a Centeral gathering for 2 weeks every year to collectively make planning for the whole larger society or the country. Also representatives should be voted by coops. The candidates can not be nominated again following year. Can be nominated after few years again

In a proletarian state, economic planning would ALWAYS be not only democratic but scientific.

The material balance planning of the USSR is not the only way of planning. The lackluster performance of the Gosplan was mostly due to the difficulty in information exchange and processing. The soviet material balance sheet model could not provide timely and accurate solution in response to more varying social demands after the fast industrialization period. The rise of the Internet and powerful personal computers has brought advanced computational economic planning to a possible reality. Whether the new system is distributed or centralized should depend on how to compute most efficiently. The problem lies with how to get everyone involved into a grand planning system with both open source code and high confidentiality while maintaining a certain amount of efficiency since the information needs to be processed would grow geographically with the number of participants.

Somebody on Reddit asked what "Socialism of the 21st century is". Here I copy the response I gave them, since it also covers the topic of this video: Just as Socialism of the previous centuries, Socialism of the 21st century has different interpretations and models. There is for example the combination of direct democracy with cybernetic planning, as was described by Paul Cockshott and Allin Cottrell in "Towards A New Socialism". They want to push back on the notion that economies can't be planned, it just requires a certain amount of computation power and thought to get rid of the inconsistencies of socialist planning of the 20th century. Another interpretation of 21st century socialism is pushed forward by Richard D. Wolff. His emphasis is the democratization of the workplace. So in contrast to the Cockshott/Cottrell modell (which is macroeconomic), theworker coop model of Wolff is microeconomic, with a focus of the transformation being inside the workplace. There are other interpretations of 21st century socialism, but they do not necessarily exclude each other. So for example wrote Heinz Dieterich a book called Socialism of the 21st century, but he arrives at a similar point like Cockshott and Cottrell, but from a different starting point - the emphasis lies on the Marxist Labor Theory of Value and Democracy.

Thanks for sharing that, well said and explained!

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Important question. I've been wondering about this very issue; glad the prof is tackling it. The whole consultative process he describes here seems prone to anti-democratic distortions all along the line, but it would at least be better than the workers having absolutely no voice as is now the case.

As we automate less labor accomplishes so much more. How do we create a fair system of dispersing cash if we have less employment as a country? Planning. At 18 I worked at a cheese facory that produced 10 000lbs of cheese a day. I worked there 2 years. At 40 I returned and that same factory produced 80 000 lbs average daily. Due to automation the staff was the same or less compared to when I was 18. Now I am 52 no longer working at the cheese plant. The company moved operations to a plant that produces 400 000 lbs of cheese daily with a few less employees than we had when I was 45. These are fairly accurate real numbers and each upgrade produces less waste per lbs of cheese and more cheese per unit of milk. It all sounds good so far. Now we have wage disparity. Fewer earners. If the classes of people in poverty grow and the income earning dwindle the country matches the economic picure of the 3rd world. I'm in Canada. We have manufacturing in the east and resources in the west. Two sectors compliment Canada cause if one is down and out the other thrives. Problem is Canada is about 40 million people. 30 million+ are in the east. A few million are employed by resource sector. China undercuts our eastern manufacturing greatly. The problem of a few needed to work and nothing for others to do but stand ready when necessary. This is why capitalism has to employee socialism. In the past though, the freemarket thinktank made a fascinating use of word play when they employ socialism. Take Katrina for instance. New Orleans destroyed. Its a military type operation. This is really socialism disguised. Insurance capital is only paid to upper class and lower class is moved out. Its condemned to sell water bottles as price gouging. Capitalism would say its good to sell at highest price but they are morally drowned out. No selling necessities they are freely given away. Every crisis we are drawn to social aid which is socialism. Governors call for a atate of emergency. That is actually socialism. Farmers corn production in America is socialism. The police force is socialism. Public School as well. If you don't agree you won't understand the video. The above things I am calling socialism is as far a change as is being talked about in the video. Not dropping everything you know for communism just expanding current culture of what already exists. For Canadians half of us don't even know we are socialists. Its just life doesn't go down that far. In winter you're dead without shelter in minutes. We require and expect a minimum level. Life gets stupid fast without a soft landing. As for the videos your word choice is wrong. Technically correct. Using the word socialism scares Americans stupid. Its a buzz word. They feel terrorised by it. They don't see past dictator enslavement tortured and godless. We mean state of emergency followed by a department of wellness. You keep your freedom and expanded to less stress with happier times. Change wording and enjoy less hard labor. Pick up a hobby that you enjoy that fulfills life. Big change eventually making life better.

Very interesting and something to think about

Blockchain powered decentralized government is the answer.

Prof Wolff is a gift to this country. It's so hard to find a compassionate and intelligent pundit in the self-absorbed opportunistic social media paradigm. Truth is hard to find in our post-truth hyperreality. The only boomers you can trust are those who say all the other boomer mucked-up. Thank you, Prof Wolff, for being a fountain of information necessary for democracy, and an inspiration to young truth seekers and tellers.

Very interesting!

Yeah you're right, the soviet union had markets and paid wages. That's the problem.

thanks

aristotle gave us, "who decides?" and mao reminded us, "political power grows out of the barrel of a gun." politics is the exercise of power without immediate violence, but there must be the potential of violence, to make real the talk. if you want democracy, first you must get it. because you haven't got it, unless you are swiss. how do you get it? by asking those who have power to hand it over, or else. the 'else' must be a large body of people prepared to shoot. the simple truth is, if you won't fight or can't fight, an elite will rule you- and you won't like the result.

those state officials who oversaw the factories and industries, what if they were elected by the workers? what if the minister of steel was elected by the steelworkers? its what john mcdonnell was entertaining when he was part of the front bench.

How about if we, say every few years vote on plans, like one can vote on budgets? We could maybe even log in and make our own plan suggestion to varied details, and a computer system could work out the resulting "compromise" plan, by analyzing the different suggestions, and give them "weight" in accordance to how many support these suggestions. Direct democracy, where everyone could participate in significant decision making. This is in line with what Allin Cottrell and Paul Cockshott suggest in their book "Towards a New Socialism". It'd be very interesting to know if you have read this book and if so, your thoughts on the ideas which are presented. It'd be also interesting to hear a more in depth discussion on centralization and de-centralization. Are there any good "management theories" on this topic? I do agree that should not build "upside down pyramids" by concentrating power, but it is also clear that some things are to large projects to be undertaken when de-centralized, and I believe that USSR tried de-centralization but suffered even more from inefficiencies during that phase. Even in my line of work, which is not economical or political per se, but has political and economical implications (as all work does) centralization is a hot topic. To a large extent it is about centralization of competence in some fields. It is from a pragmatic point of view, clear that some parts of my work field need to be centralized, else we can not maintain the necessary competence, but centralization of the "bread and butter" fields have been very harmful. So it'd be interesting to know if there are models that can describe if centralization/de-centralization is in the interest of the people who will be affected.

This seems so obviously better than what we have. Think about it.

Interesting how “socialism of the 21st century” involves models akin to those of classic anarchism / libertarian socialism ...

central planning has its place for management of economic cycle, public education, health, environment/energy, labor relations, consumer protection, foreign relations, banking, social housing and perhaps some others. The unfree market can deal with the rest.

Mass line!

I was surprised that you didn't address the technological advances that have occured since the 20th century experiments in centralized planning. Economic modeling is used in capitalist markets today, and could be used in centrally planned socialism as well. How do you see the tools of 21st century technology being used to create a democratic and efficent model of socialism?

There's no qualitative difference between being an "employee of the state" and an "employee of a co-op". In both cases your "employer" is a collective that your nominally have democratic control over. The term "state capitalism" is therefore misleading, since the mechanism by which a higher official within a large co-op can "exploit their workers" is the same as that of a state official, and is not reliant on statehood. I'm split on how useful it is to speak of classes in such contexts. I'd say they are de facto classes but they hinge on somewhat quantitatively variable practical implementations of democracy rather than qualitative ownership. If I were to venture a guess as to a qualitative criterion for implementing a functioning democracy, I'd pick the original criterion of democracy only using representation when randomly selected, NOT elected (which was considered oligarchical or aristocratical until Liberalism).

Very skeptical to everyday planning. There are those of us that really enjoy spontaneously making plans for the day or weekend. There is a certain freedom in it. We aren't that good as individuals to predict our own needs even for the very next day. Any ways around this?

Hooray, this sounds good to me, but there is still a question of markets. Somenmarkets could still exist. Then there is taxation.

Check out Paul Cockshott for a very detailed treatment of democratic planning using modern computer technology.

The most successful examples of central planning in history (hopefully co-opted in the future through some Dual Power strategy) are the incredibly agile and entirely integrated internal supply chains of modern giants like Walmart or Amazon. Based on those models, central planning should NOT and CANNOT be democratic and be successful on a large scale. It just needs to be reactive to popular demand and NOT try to wag the dog a la 1962 dairy & meat price failure (great book rec: "Red Plenty" by Francis Spufford). From personal experience in the oil & gas logistics space, I'd say the BEST you could /vote/ on is monthly demand of essential goods (e.g. "my household will consume 4 loaves of bread, a gallon of milk a week, and 100 diapers), probably averaged out by metropolitan region, but actual production should still be based on 7- or 14-day average demand (special consideration always taken of course if a hurricane is coming or it's a holiday weekend).

the coops are great but somebody has to be in charge and decide. even in the coops Otherwise workplace democracy would run the enterprises into the ground

There’s an inherent problem with the centralism involved here. Those people in the central agency would inevitably hold enormous power. Also, their job is likely so complex that you need to be trained for it, making rotation impossible. Here’s a more decentralized approach: use a clever combination of the banking system and the fact that stores are co-ops. 1. the retailers make their economic plans based on the wishes of the local customers in a combination of day to day business decisions and decisions made at assemblies. 2. the local retailers have their bank accounts at local banks and give those banks insights in what products they order. The banks can then determine which industries can be given loans because they know in advance that these industries will make money. 3. The loans needed for production and investment are given to the industries as a whole by lending to the banks representing the individual industries. Those banks don’t have individual depositors, only companies of the industry in question can have bank accounts there. These companies are at the same time the owners of those banks, where votes in bank decisions depend on the number of employees in the company. 4. the industrial Banks will distribute the incoming loans according to what the industry itself with its specific knowledge thinks is the best use of the money. This doesn’t need to coincide with what companies are most profitable at the moment, it can also be used to have companies that use outdated technology to catch up. The rules how the bank distributes the loans and what bankruptcy looks like are completely up to the workers, only the total amount of money coming in is constrained by the customers.

It would be awesome to see Professor Wolff and Paul Cockshot have a talk about central planning assisted by advanced computing.

I emphatically disagree with Wolff's final comment about too much centralized state control. He must have missed the lesson. The problem IS NOT centralized state control, the problem in state capitalist communism was AUTHORITARIANISM. No democracy, accountability, socialist governance, or constitutional court. State control is not a problem. The state is just a tool. The only problem is non socialist governance, no democracy, or accountability to a socialist constitution. Again, state control is NOT the problem. Quit giving credence to libertarian and anarchist baloney. Socialism with centralized state control is good and subjects society as a whole to socialist ideology. We can have state socialism without the authoritarianism. Was centralized state control a problem when the state used its power to end slavery? Jim Crow laws? Civil rights laws? End child labor. Environmental pollution? The New Deal? Social security? Universal healthcare? Sovereign wealth funds? Quit the nonsense liberals

A few areas such as, for instance, health insurance, banks, national fiscal policy, and national regulatory matters should be in the hands of the central government. The rest can be handled by the cooperation of private enterprises and national and local governments. Central planning is too slow in many areas of the economy given the velocity of market interactions and the huge number of such interactions.

While i like Prof. Wolff's ideas in general, i am worried about innovation. Capitalism with all its flaws is a great driver of innovation, because innovation is one of the things that ultimately can make people rich. You need innovation incentives build into the system. I am sure that can be done differently, but it needs a lot of thought.

This video isn't really technical enough, but hey we can't expect Richard to be a scientist as well. How can an individual worker vote on how many shovels and hammers to produce given a finite amount of iron? They can't, it's a mathematical problem of optimisation that requires big data, supercomputers and mathematics of linear programming. The problem of economic calculation is covered well by this video. The optimisation mathematics wasn't really developed until the 1940s I believe, and the kinds of computing power to account for millions of products wasn't really available until the 1960s. So the original critique that socialism cannot calculate planning was a valid one. Can we do it with todays computing power? Pfft, no problem. ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-cI01-5zhwdA.html Of course, the worker still has a say in what he wants as an individual, as an input to the big data. And modern socialism would use the same methods and technology as marketing does today for that. And the worker still has a say on the conditions of labour. But the question of how much to produce given finite resources, where to produce it, how to transport it efficiently. These are all mathematical questions that require a central planning authority.

@Martien de Jong. Your binary logic is stupid. Market vs. planning is a FALSE dichotomy. Just like the distinction of freedom vs. control is a false dichotomy. In reality they are both a SPECTRUM. There is a huge gap in between a laissez faire market and the input/output planning of the SU. There are all kinds of policies which we can use to control and direct the market toward socialist goals, such as simple rules and regulations, socialist governance, social contracts, coordinated collaboration, planned structures and organization, economic bill of rights, centralized economic democracy, democracy in the workplace, corporatist arrangements, centralized wage bargaining, a publicly determined income distribution, nationalization, anti trust laws, etc. just to name a few. So unless you are a liberal nut job wants everything decentralized and privatized such as education and healthcare, there are plenty of options for the state. All of which can be governed according to socialist principles and can be democratically accountable. So the right wing fear mongering of state socialism is inherently authoritarian is FALSE! Please dont listen to Mexie and her decentralization nonsense, she know nothing about the political economy of state and society relations. She probably also wants to decentralize the Canadian healthcare system.

Michael Parenti and his boiis got triggered as fuck when he dropped the "state capitalist" term on the USSR.

Dear Prof. Wolff, you are talking about majorities, which decide over planing. Assuming you speak and understand German here an advise from Friedrich Schiller: Was ist die Mehrheit? Mehrheit ist der Unsinn, Verstand ist stets bei wen'gen nur gewesen. Bekümmert sich ums Ganze, wer nichts hat? Man soll die Stimmen wägen und nicht zählen. Der Staat muß untergehn, früh oder spät, wo Mehrheit siegt und Unverstand entscheidet. The political situation in the US demonstrates exactly that.

Central planning cannot react quickly to disasters or large changes in demand. It is physically impossible for a group to throw the on switch.

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@Constitutional Socialism, I am supportive of your approach and agree with most of what you said, but don't think it is sufficient to resolve our core issues. Of all the doctrines, I most closely subscribe to scientific structuralism, when it comes to organizing and managing the economy. This approach does not have a political, or moral orientation, but is primarily rooted in scientific rational of sustainability. Even though I think policy solutions directed at fostering collective wellbeing and workplace democratization, rooted in Marxists teachings, are much more sensible and morally superior to capitalism, they are not sufficient to avert ecological collapse, changing climate, and to achieve sustainability (they can, however, dramatically reduce economic inequality). Humanity's most pressing problems are technical in nature (not political), e.i. finding the optimal way to distribute resources to everyone without degrading the biosphere, and sychronising economic flows with natural flows. To achieve this, we need collectively owned super computers, smart grids, and a massive array of environmental sensors, to measure everything from pollutant concentration to rates of consumption. Distribution can than be solved with the help of science of human needs, and by using the latest and most efficient logistics systems. Neither capitalism nor socialism offer a full solutions toolkit to achieve this. Please check out Peter Joseph, who is the leading thinker on scientific structuralism out there. Hope you are well, and stay safe!

Richard has done an excellent job manufacturing consent for the World Economic Forum's Great Reset. We Billionaires thank you for helping us to increase profits. 😀

Democratic centralism!