Yes, the direct democracy and voting on the surplus allocation is what was needed in the past Eastern Bloc countries. The technological way could be done by voting using punch cards with ballot votes. The old information processing technology did allow for collection of such information. I wonder whether this occured in any politician of that day, to implement this level of direct democracy, where everyone decides on the regulation of the economy.
Sorry for the stupid question but I cant get my head around how exactly the ratio of Workforce I(Capital) to Workforce II (Consumer) in the end determines the relative surplus produced in a socialist society, even though I understand how it works in a capitalist society. Could you give an example of such a plan?
Since I have lived in a socialist country I can tell from experience. His explanation is strange to me. We had a plan for people's owned companies to produce for the national consumption and for export. The export also was divided into export into socialist countries and block free countries. And export into capitalist countries (which seem to come closest to production for capital, since they were paid in foreign exchange and also were paying of credits and interests). I miss his explanation for the main difference in capitalism and socialism: capitalism is debt based Socialism is material based I guess what he tried to hint at is that the material based trade system of socialist countries aims at balance. They don't want to hoard capital at all. They put it to use and turn it into goods that supply the people! The capitalist trade system tries to achieve a trade surplus or a deficit to regulate its currency and the private property owners to achieve the greatest hoarding of capital that is possible. This causes purposefully dependencies by indebting the trade"partners" (which socialists want to avoid!). So there were no debts between the members of the council of mutual assistance. Only between the socialist and the capitalist countries!! With the CoCom embargo applied, the technology of the socialist means of production became more and more outdated, this resulted in less demand from the capitalist countries and therefore shrinking income to pay off the debts and exceptional high interest rates (in these foreign currencies). A capitalist debt trap! So to pay off debts more had to be exported, the lesser was available for consume! And this resulted in the big dissatisfaction.
@Paul Cockshott I have watched this video several times before and also read the literature of yours, but until now I did not realize how wrong this is (appears to me?). 6:59 "The surplus in socialism is defined by the planned net ratio of consumer goods to capital goods" This is wrong, because a part of the consumer goods are still necessary to reproduce the workforce. You can't generalize "all consumer goods are surplus", its not surplus if it goes beyond the basic reproduction of the mode of production. Same goes for capital goods. Not all capital goods are net investment, some are just replacement for worn out parts of the existing infrastructure. Dr. Cockshott, can you please explain this in detail? I already watched all of your videos and read most of your books, but perhaps there is something I do not understand here. Why is it the ratio of consumer goods to capital goods? Parts of both are used for reproduction of the existence of the mode of production, and only parts of both are actual surplus. At least, this is how it appears to me at my current understanding of the topic.
I dont understand your point about consumer goods. On capital goods, you are right that I was over simplifying in the slide. I was assuming the model of the USSR in the 1930s when it was rapidly industrialising and replacement of existing capital stock was negligible. In latter periods that no longer applies.
@@paulcockshott8733 First of all, thank you for taking the time to answer my question. Secondly, with consumer goods I mean basically the same thing. Some consumer goods are just that, surplus above the necessary production. But a significant part of the consumer goods is part of the necessary production to reproduce the workforce (food is required to keep the working class alive, so producing food to keep it alive is not part of the surplus). Perhaps this is all a misunderstanding of Marx on my side since I still haven't finished Capital. But I have understood "surplus" in this abstract sense being everything produced above the amount of keeping the current economic system alive (including the direct producers). So in Capitalism this takes the form of a wage, the wage can not really be below the reproduction levels of the individual worker. In Feudalism the lord should not take more from the peasent than the peasent needs to feed himself (and to have enough seeds for next harvest but thats capital goods again). So in conclusion I don't think its so easy to say that surplus is the ratio between all consumer goods and all capital goods, since parts of both are required to reproduce the economic infrastructure and the workforce
@@LibertarianLeninistRants From the standpoint of the Marxian theory of surplus labour, none of what is consumed by the direct producers counts as surplus.
@@paulcockshott8733 yes, that is exactly my point. Not all consumer goods are surplus, the ones consumed by the workforce to stay alive are not. Pardon my english, its not my first language
@@paulcockshott8733 Okay, one my try: Is there a distinction between consumption and reproduction? If you are saying that the surplus in socialism is defined by the net ratio of consumer goods to capital goods, this might imply that the the reproduction of the whole society is subsumed under "consumption of consumer goods". I previously was under the impression that consumer goods were goods that were consumed, but not necessarily part of the reproduction of the direct producers. So consumer goods consumed by pensioners and sick people were neither part of the surplus nor part of the reproduction. If P is the total production at a point in time, R is the amount of goods necessary to reproduce the workforce, NRCG is the amount of consumer goods used up not necessary for the reproduction of the workforce (pensioners, sick people,...), CG is the amount of consumer goods and S is the surplus, SR is the reproduction of the means of production and SI is the investment, then (in my understanding): P = CG + S = (R + NRCG) + (SR + SI) You were saying the ratio CG:SI determines the whole surplus. You admitted in the comments that CG:(SR+SI) determines the surplus as surplus is distinguished between the reproduction of the means of production and the expansion of them. My question was from the beginning (now in a new form), why is the surplus in socialism determined by CG:(SR+SI) and not CG:(SR+SI+NRCG)? Because the consumption of non-direct producers would be met from the surplus as well in my understanding. Really looking forward to your answer, I hope I was able to bring forth my problem here in enough clarity.
As they say, prediction is hard, particularly when it is about the future. I have sympathy with Deleons idea of industrial unions as a transitional measure.
I was at one time fully a De Leonist. But I have moved on to Marxist-Leninist beliefs but I retain a tendency for De Leonism. I understand what Socialist Industrial Unionism (SIU) is about and the formation of the Congress of Labor being the economic government. But there is some ideological problems within the Socialist Labor Party of America (SLP). They believe they have the only true socialism and has alienated other Left parties calling them "reformists". They remain anti-communist and believed the USSR was never a socialist country, and that it was totalitarian which Prof Grover Furr has debunked. The Czarist regime was very brutal to begin with and there is no wonder that shards of that regime were carried over to the new socialist republic. Even though De Leon was co-founder of the IWW there has been no attempt in any further creation of the SIU by the members of the SLP. They pretty much exist as a website these days but a few (perhaps non members) are trying to develop interest in the SIU program on a few facebook pages. Problem is they are ideologically SLP. It is my belief the SIU would be better off without the SLP. The SIU program will have to be different with some modifications and be independent from any political party. What the SLP or De Leon did not take into account that workers have different political beliefs as they do religious beliefs. I really cannot work on the modifications alone but I believe that the workers should be taught that their place of work can be collectively owned if they unite under Industrial Unionism and that they could collectively plan the economy with the creation of a economic Congress of Labor. As to politics: I have to leave that with existing political parties but one thing these parties need to understand is what SIUs are about and how they can play a part in the reconstruction of society.
What role does finance play? If finance is defined as a "claim on future surplus" then one can conclude that there can both be a "public claim" and a "private claim". Is finance specific to capitalism or does it also have a role in socialism?
There was a vestigial finance function in socialist economies, since they had not moved over to labour time accounts. They still used circulating paper currency and coins. They thus needed a banking system to issue the notes and to channel payments to state enterprises which then paid workers. But whether investment had to be 'fianance' of met out of state grants was something that changed over time. A review of this is given in the following article www.bannedthought.net/USSR/MiscAntiRevisionist/RestorationOfCapitalismInSovietUnionIn1950s-Ball.pdf
So if department one is nationalized, and rate of growth is determined politically, as is the allocation of D1 surplus product, via state credit, or variable prices. Department two is mutualized, and the owners are not extracting surplus value, and D2 growth is regulated by D1 surplus allocation. Then would this schemata you have described qualify as lower stage socialism? Or to specify could lower stage socialism utilize markets in D2, if labor was allocated politically between D1and D2, and surplus product of D1 was allocated by a planned mechanism?
You can not really have a socialist economy if only a minor part of the economy is socially owned. You would need to have both sectors planned for the surplus mechanism to be socialist.
@@paulcockshott8733 Professor how do you think new technological revolutions such as the current in synthetic biology, as well that in additive manufacturing will affect the development, and execution of a socialist economy? The former could vastly cheapen, and decentralize industrial chemical, and material production, while the latter shows the promise of decentralizing, and distributing manufacturing. Could this simplify economic planning? Have you heard of a NASA concept called seed factories, and another concept called universal factories? How important is it to have a concrete theory or direction for the development of the means of production itself?
I am not familiar with that idea from NASA. The more significant development is the increasing role of information goods with very low marginal labour content for each copy.
@@paulcockshott8733 Well the concept of a seed factory is based on weight constraints during spaceflight. So the idea was to construct a factory that was light enough for transport, but could complexify, and eventually reproduce itself using native materials, like lunar regolith. The concept was quite literally based on biological seeds. The important thing I take from that is identifying the minimal industrial complex it takes to self complexify, and reproduce itself. And trying to create that industrial complex at different scales to facilitate coordination. The measurement of this minimal industrial complex would be the rate of enclosure, of self sufficiency. The key insight being the higher the enclosure rate of lower economic scales, the lower the complexity of coordination at the higher scale. So imagine when advanced robotics, ai, synthetic biology, distributed manufacturing, and open source industrial design, is implicated, and shrinks this minimum industrial complex, or seed complex. Imagine the family, or collective commune with a 50 % enclosure rate, the regional federation of communes with an 80% enclosure rate, that means only 20% of the inputs would be distributed by a plan at higher scales. The point being maybe achieving these higher enclosure rates at lower scales will deliver the withering away of the state, an a truly ecological economy.
Your idea only makes sense in a closed economy that is completely autonomous. The problem was actually the dependency on the capitalist price dictate of the world market because of US containment and rollback additional to many other factors. To allow the people to vote over using the surplus to invest or consume would have severe consequences in the defense against the aggressions of private property owners. Also, it surely would make the masses feel good, but cause big economic problems. Take Gorbachevs idiotic idea in agricultural sector to vote the leader of the farming cooperatives. The leaders that promised the least work load got voted in position and this lead to a catastrophic result and famines that we, the members of the council of mutual assistance, had to bail the soviets out of!! This is a terrible idea. Also one misconception is the phrase "owning class" in socialism, since the extremely high percentage of people's owned property of the means of production (>90%) the "owning class" is all the citizens of the socialist country, the soviet union in this case! Since I have lived in a socialist country I can tell from experience. his explanation of planning production for either consumption or capital is partly strange to me. Maybe it's the translation into English... 🤔 We actually had a plan for our people's owned companies and cooperatives to produce for the NATIONAL CONSUMPTION and for EXPORT. The export was further divided into export into socialist countries + block free countries. And export into capitalist countries (which seem to come closest to production for capital, since these exports were paid in foreign exchange and were therefore used to pay of credits and interests in these foreign capitalist countries). I miss his explanation for the main difference in capitalism and socialism: capitalism is debt based Socialism is material based I guess what he tried to hint at is that the material based trade system of socialist countries aims at balance. They don't want to cause dependencies to subdue the other! They also don't want to hoard capital at all. They put it to use and turn it into goods that supply the people! The capitalist trade system contrary to this tries to achieve a trade surplus or a deficit to regulate its currency (nominal and real value) and the private property owners to achieve the greatest hoarding of capital that is possible. This causes purposefully dependencies by indebting the trade"partners" (which socialists want to avoid!). So there were no debts between the socialist members of the council of mutual assistance. Indebting only occurred in trade between the socialist and the capitalist countries!! With the CoCom embargo applied, the technology of the socialist means of production became more and more outdated, this resulted in lesser demand from the capitalist countries and therefore shrinking income of the socialist countries to pay off the debts and exceptional high interest rates (in these foreign currencies). A capitalist debt trap! So to pay off debts more and more had to be exported, the lesser was available for consume! So you see now why it was not a matter of voting for or against consume of the surplus. It's a cute idea but going completely against the bitter reality of the bitter western aggressions in the cold War.
The USSR was not state capitalist? What would you say to the many authors and Trotskyists who say otherwise, including Lenin and Engles? They say that the surplus was appropriated by the bureaucratic class called "Bureaucratic Collectivism." I would argue that markets and money dont necessarily make a mode of production capitalist. If there are NO markets and no money but there are slaves working on a plantation owned by the state, that still counts as capitalism. Because the political class are appropriating the surplus product of the slaves.
I would not agree with you there. A system of slaves production is not capitalism, it is the slave system of production. You should not assume that all economic systems in which there is a class of owners appropriating a surplus is capitalism , since that is a common feature of pre-capitalist economic formations. You have to track where the surplus goes. In the USSR the surplus went mainly to : defence, investment in new means of production, pensions. That does not amount to appropriation by a bureaucratic class.
The surplus goes to a capitalist class under slavery, Slavery is capitalist behavior because it is extraction for personal or class gain. Capitalist behavior can be found in all non socialist systems of production. How is not? Your definition of capitalism is simply money and markets. That means market socialism is not really socialism. When Imperial nations came and stole land and appropriated the natural resources as private property how was that not capitalist? Or when you earn capital gains by speculating in the stock market. That is also capitalist behavior.
Exactly, in the USSR the government was acting in its own self interest and the political class interest not necessarily in the interest of the lower classes. All decisions were made by the politburo and why the standard of living for the average person was still low compared to Western countries, except for the political class who had access to foreign luxury goods
Here is my definition of capitalism: Capitalism is simply the use of property (a legal system in slavery) as capital and leverage to extract profit from a market or a subordinated class of people for personal or class gain. According to your logic the USSR even in theory could not be capitalist
No that is not the case. The politburo did not consume more than a tiny fraction of the surplus. It was attempting to raise living standards of the population as a whole. The main reason why the standard of living was below that of the UK or USA was that it started so far behind - on a level with Brazil not with western Europe. The 'Western Countries' that are the appropriate frame of reference were Brazil, Ecuador, Columbia etc, not the USA, UK and France.
