Letters

Market socialism

In reply to Alan Johnstone (Letters, May 26), I certainly did not mean to create the impression that the dissolution of the Constituent Assembly by the soviet government was an ideal measure.

The reason for this action was that the Constituent Assembly refused to accept the legitimacy of the soviet government. Consequently this antagonistic situation could only be resolved if this institution “unreservedly recognises soviet power, the soviet revolution and its policy on the questions of peace, the land and workers’ control, and to resolutely join the camp of the enemies of the Cadet-Kaledin counterrevolution” (Lenin: ‘Theses on the Constituent Assembly’ CW Vol 26, p383). This proposal was refused because the Constituent Assembly was unable to accept the validity of the soviet revolution. The inevitable clash of sovereignty was resolved by the dissolution of this parliamentary institution.

The specific polarisation of opposing class forces could not have resulted in any other situation. In other words, the only other option was the capitulation of the soviet government. This act would have represented a betrayal of the working class and poor peasantry. Thus civil war became inevitable. Such a development is not an ideal scenario for the present, which is why I would advocate the attempt to peacefully resolve the tension between rival forms of sovereignty.

In relation to the issue of market socialism, I concede that our aim may be a communist society without markets, wages and money. But this is a long-term goal, and what is more practical and concrete is the issue of how we promote the transition to this type of society. I do not support the type of reformist market socialism advocated by Alec Nove, and instead support the leftwing variety outlined by Tony Smith in his work: Globalisation: a systematic Marxist account (Chicago 2009). He outlines a society based on industrial democracy, in which the market has an important role.

But let me firstly establish a practical reason for my support of the market. The attempt of the Bolsheviks to develop an economy based on war communism and the suppression of the market was a failure, as admitted by Lenin. The attempt to develop a direct transition to socialism was not successful, because there were no incentives for the peasantry to provide grain for the starving cities. It was admitted that incentives had to be provided to the peasants, if trade was to occur. The economy could not develop successfully without the material rewards provided by the market. This understanding followed the onset of famine, which led to the deaths of five million people, and the widespread generation of peasant revolts.

In other words, the transition to socialism, which was to be accompanied by international revolution, required the utilisation of transitional mechanisms like the role of the market, stable money and wages. Hence the law of value cannot be administratively abolished in this transition period. Preobrazhensky outlined this contradictory process most eloquently in terms of the contradiction between the law of value and the law of primitive socialist accumulation (‘the new economics’). Unfortunately, the New Economic Policy was ended because of Stalin’s view that the kulaks were a threat to socialism. This was a myth, and Stalin’s dogmatism ended any economic rationality based on the role of the worker-peasant alliance. The generation of socialism requires the reconciliation of economics and politics rather than the imposition of inflexible truths.

Stalin’s repressive policies indicated that the attempt to prematurely dissolve the transitional mechanisms of the process to realise socialism end in the creation of a new form of exploitative regime. However, you may ask, what has this to do with the situation today? The historical lesson is that we have to recognise that the transition to socialism involves compromise and the recognition of the importance of the reconciliation of theory with the practical difficulties that may arise in the process of transition to socialism. Hence the Bolsheviks were originally misled by the view that the major aim was the overcoming of the danger of capitalist restoration, via suppressing the role of the market. This standpoint meant they neglected the task of how to realise material needs and welfare of the peasants. However, they recognised their mistakes with the introduction of the New Economic Policy.

We would do well to learn from them and understand that the market, via the relation of supply and demand, is the most efficient mechanism to allocate scarce goods. This process also provides high-quality goods because the realisation of demand is connected to the provision of the items of the highest standard. Under capitalism, the market is an imperfect mechanism to distribute goods because of low wages, which results in underconsumption, and the related promotion of overproduction because of the attempt to realise high profits. This problem can be tackled in the transition to socialism by actually making the market more efficient and able to correspond to demand more effectively. Surplus goods will also be distributed for free.

Hence over time, and gradually, the role of the market may be started to be overcome. But to have illusions in ‘skipping over the market’ will be to court disaster. This is because the attempt to distribute goods without the relationship of supply and demand, and without prices, or for free, is to generate a situation of the scarcity of certain items, which will lead to rationing. Such a development will only result in resentment in societies that were advanced capitalist economies. Hence, it also goes without saying, that the role of the market is accompanied by an economy based on wages, or monetary rewards. Wages will be an indicator of what it is possible to buy.

But the significance of the market will be offset by the development of industrial democracy and the effective replacement of the dominating role of capital with the importance of workers’ control of production. This situation will be reinforced with democratic planning. Hence at the level of production the role of the working class is to provide alternative criteria for the realisation of need. In this manner the objective conditions become possible for the role of the market to become transcended.

As Tony Smith comments, “It is possible to imagine a feasible and normatively attractive society combining markets with the socialisation of the means of production: that is, a society making use of producer and consumer markets after abolishing both capital markets and labour markets” (op cit p303). Hence the continued role of the market is not able to undermine the progressive promotion of socialist relations of production based on industrial democracy. Gradually the character of production will influence the process of consumption, and need will dominate what has been based on the relation of supply and demand.

But, if the attempt to skip the role of markets is tried, the connection between production and consumption is undermined. The result will be the creation of goods that are of low quality and so do not meet demand. In this situation centralised and bureaucratic planning agencies will emerge in order to impose arbitrary prices that have little relationship to market demand. The result is waste and inefficiency. Hillel Ticktin does not seem to recognise that one of the reasons for waste in the Soviet economy was the failure to develop market socialism. But this possibility was unlikely because Stalin wanted to develop an arms economy, and had little concern with the consumption needs of the population.

Alan Johnstone is not a Stalinist. He rejects the role of the market with immaculate Marxist credentials. But the point is that the very development of market socialism, combined with the lessons of the Bolshevik experience, have taught us that the approach of Marx has flaws. The point is that the theoretical and practical choice is between our emphasis on aiming to create a society in transition to socialism and communism, or adherence to dogma.

Kevin Hudis has written one of the most detailed studies of Marx’s concept of a socialist and communist society: Marx’s concept of the alternative to capitalism (Chicago 2012). He argues that a society based on concrete labour, or the production of use-values, will overcome the alienated condition of abstract labour and the production of commodities: “This much is clear: a generalised commodity - or labour market, in which the products of labour are mutually interchangeable, cannot exist if the substance of value, abstract labour, ceases to exist. A society cannot be characterised by or dominated by market transactions or a market of any kind if the conditions for its possibility are not present. And the condition of possibility for a market is the existence of indirectly social labour - a condition that is annulled in the new society” (p192).

But the point is that it requires a protracted period of transition to realise this situation. What we do know from actual historical experience is that the attempt to directly overcome the market results in economic and political problems. Marx’s texts represent no answer to concrete issues, because he could not anticipate them in the future. Instead we have to develop our own, non-dogmatic, understanding of how it is possible to develop a socialist economy. We can learn from Lenin, Bukharin and Preobrazhensky, and many other theorists. The last word is not with Marx.

Phil Sharpe
email

Nuanced

In the latest of the polemical exchanges between Arthur Bough and Mike Macnair (‘Social democratic stepping stone’, May 19), Bough accuses Macnair of simultaneously (a) claiming that gains by the working class in the centres of western imperialism during the period of the existence of the Soviet Union and its satellites were due to the latter’s presence as a “pole of attraction” for workers, who therefore had to be bought off; while (b) characterising the Soviet Union in a way that would make one think that it could not possibly have been functioning as such a pole.

I do not want to get into the debate about the precise nature of Soviet society - ‘state capitalist’, ‘ bureaucratic socialist’ or some sort of ‘frozen transition between late feudal absolutism and emergent capitalism’. Whichever such analysis one might cleave to - or if one does not take a view between them, or thinks that elements of them can be usefully fused - one can accept what one might call ‘the weak non-capitalist hypothesis’: ie, whatever Soviet societies were, within them the capitalist class had clearly been expropriated (although with hindsight we know that this expropriation was temporary).

This minimalist position, is enough to explain, at least partly, the concessions made to the working class in the western imperialist centres while the USSR stood: Soviet propaganda about the USSR was sufficient, given what in fact the USSR was, for the bourgeoisie to take seriously the idea that enough workers in the west would buy it and try to achieve something similar, to pose a threat to capitalist class rule in the west.

I think that this point by Bough is a good example of his rather mechanistic and black-and-white approach. One could paraphrase it as: ‘If Soviet society was not ideal, its existence cannot possibly have had any positive effect on the wider fortunes of the working class during its existence.’ This contrasts with the much more nuanced position I have laid out above as more or less being Macnair’s.

Sean Thurlough
London

United States

Irving Welsh sums an abstention case (‘However we vote, the elites will win the EU referendum’ The Guardian May 30), when he says: “Whether you back red or black in the tawdry, crumbling casino of neoliberalism, and whatever the slimy croupiers of the mainstream media urge, it’s the house that invariably wins.” At the crooked wheel keep your money in your pocket and not on red or black.

I enjoyed the analogy, but it doesn’t really cut the mustard. There is much more to this than gambling on June 23. It is better to start with the medium and long term, where the working class can be next year or in five years time. There are two different debates that socialist should have.

First is the argument between reactionary, conservative and revolutionary views of the future. Then there is the immediate vote for ‘leave’, ‘remain’ and abstain. Of course, the Tories have only offered people a binary choice between ‘remain’ and ‘leave’. The media national debate is between these two. However, millions of people will not vote and, the larger the abstention, the worse it gets for those who own the crumbling casino. Those calling for abstain [or boycott] are demanding that workers do not simply follow in the choices the Tories have given us.

The big picture is that the European Union is in crisis and cannot stay as it is. It will have to break up or become more fully integrated. It is a ‘halfway house’ - neither fish nor fowl. In the next year or five years the EU may break up and Europe disintegrate. Alternatively the EU may become or be part of a United States of Europe, a federal republic of Europe.

A United States of Europe is a realistic possibility, because it is rooted in the real world of capitalism and is the logical extension of the process of European integration that has been going on for the last 50 years. It is revolutionary, because it requires a break with the present. Of course, it is no more than an idea and many kinds of United States are possible. It only becomes a revolutionary reality by the intervention of people and social classes.

Boris Johnson has talked about the future of the EU with a sense of history and a longer-term perspective. Therefore he better understands the present choices. He rejects the United States of Europe and elaborates the reactionary case for taking the UK back to the past as an independent, ‘sovereign’ country. He omits to mention this would be in the pocket of Washington, continuing our role as the 51st state of America.

Of course, Johnson presents himself as the progressive leader of the British freedom movement engaged in national liberation struggle against the evil empire. He declares he is not anti-European and even sings in German. If Hitler tried to unite Europe under the jackboot, Boris is full of the Dunkirk spirit and ambition to lead Dad’s Army.

So what about the conservative future for the EU? Carry on as before, but try a bit of change? This is the best conservatives can offer - remain and tinker about with petty, fogging reforms. In essence neither forward nor back. In the conservative centre, Cameron and Corbyn are together in an unhappy Viennese waltz, pulling in different directions. Cameron wants to take one step backwards and Corbyn one forward. But get real. Cameron is in charge of this little dance.

Voting in the Tory referendum is really a strategic choice between reactionary and conservative options. These are the only two on the ballot paper, hiding under the words ‘leave’ and ‘remain’. But in reality Cameron has not given us a conservative option, because we are voting on his reactionary negotiated ‘dirty little deal’. Those socialists backing reaction or conservatism are not facing reality. They are in fantasy land.

Steve Freeman
Left Unity and Rise

It’s imaginary

According to Michael Roberts, the fall in the price of oil from over $100 per barrel in 2008 to around $40 per barrel today cannot be explained in terms of changes in supply and demand. Any attempts to explain the fall in this way is “superficial at best” (‘Consistent, realistic, verifiable’, April 28).

Every time soaring oil prices lead to a collapse of demand, which turns into a recession - ie, a slowdown in economic growth - out come the Marxists with their labour theory of value to explain the crisis. Marxists usually relate most crises to the labour theory of value and this happened in the early 1970s, when Opec started a global recession by raising oil prices. The crisis, we were told by leading Marxists, resulted from the falling rate of profit, which occurrence is related to the law of value expounded by Marx. Since for Marx the law of value is “the pivot on which a clear comprehension of political economy depends”, it behoves us to look closer at the labour theory of value.

One of the great historical ironies of political economy is that the bourgeois classical economists, like Smith and Ricardo before Marx, opted for a labour theory of value around the same time as the industrial revolution had begun to transform the role of workers from skilled artisans to machine operators and supervisors - a process which still continues today. Consequently, by the time Marx came on the scene, the labour theory of value established by the classical economists was already facing problems. Although a labour theory of value is not needed to explain the exploitation of the working class - for instance, if a group of workers produce 100 TV sets and are paid for producing 50, the additional 50 forms the profits of the capitalists - Marx nevertheless latched on to the labour theory of value because it was convenient to do so. As a result, Marxist economic theory was based on something which has no corporeal existence, a theory which, like time, only exists in the human mind.

The classical economists claimed that the value of a commodity was determined by the labour time necessary for its production. So, in the labour theory of value we see that value is closely linked to time, or labour time. As time has no reality outside the imagination, value must be of the same nature: a complete abstraction. This, in fact, is how Marx presents it in Capital volume 1, where he derives the value of a commodity not from concrete, particular labour, but abstract universal labour, which disregards the concrete form taken by labour.

The truth is that the abstract labour from which Marx derives the value of a commodity can only exist in the human mind as an abstraction. So we have a failure of dialectics here on the part of Marx. The term ‘abstract’ includes the meaning, ‘having no material existence’, just like the value of a commodity, which Marx derives from abstract labour. What Marx is doing in Capital volume 1 when he discusses the nature of the commodity and its two opposed sides expressed through value and exchange value - that is to say, abstract and concrete labour - is to relate ‘value’ to universal abstract labour, or labour in the abstract: that is, independent from its concrete form, from which use-values are produced. Marx uses dialectical logic to explain the two opposed sides of the commodity, but fails to grasp that abstract labour, as a category, can only exist abstractly, in the human mind.

So, according to the argument of supporters of the labour theory of value, or the law of value, as Marx called it, the value of a commodity comes from abstract universal labour, which like time, can only exist in the imagination. It is impossible to grasp Marx’s error without understanding that the abstract, including what Marx calls abstract labour, can only exist in the imagination. It has no corporeal reality because real labour is always concrete and particular, with a defined purpose. In the labour process the universal is immediately turned into its opposite, the concrete particular, negating its existence as actuality. Marx’s error consisted in not taking into account the transformation of the abstract into its opposite, the concrete.

Thus Marx’s theory of value is based on separating the abstract from the concrete, and viewing the two in rigid opposition. This is a mistake in dialectical logic, and so his theory of value results from this mistake. Therefore, to defend Marx’s version of the labour theory of value it is necessary to abandon dialectics. This is because not only the conflict of opposites, but also the unity of opposites and the transformation of opposites into each other, is essential for grasping the modus operandi of dialectical thinking.

If the value of a commodity does not come from abstract, universal labour, which exists only in the imagination, where does it come from? A clue is found in Marx, when he argues that no commodity can possess value unless it simultaneously possesses use-value. It is indeed remarkable that Marx could argue that without use-value a commodity cannot possess value, but then proceeds to develop a theory of value which disregards use-value. How is it possible to argue that use-value doesn’t count when discussing value? This is Marx’s failure of dialectics - the elevation of abstract labour over concrete labour and deriving value from the former, while claiming nothing can have value without use-value.

Michael Roberts does not dissent from Paul Mattick junior’s view that Marx’s theory of capitalism is a value theory, and most Marxists will agree with this. Yet value, as conceived by Marx, is an abstraction with no substance. In other words, Marxist economics is based on a theory of value which has no material existence. Those who argue that the value of a commodity is based on the labour time socially necessary for its production, are in fact putting forward a time theory of value: in other words, value comes from the labour time necessary to produce something. But if time is illusory how can value come from an illusion? And how can the development and decline of capitalism be determined by illusory time which determines value? It is not clear why labour and its duration in ‘time’ should determine the value of anything outside of an agreement that it should do so. And if this is the case, it is obviously not a objective law of capitalism, but something completely arbitrary and subjective.

The Marxist theory of capitalism is based on the law of value, a value which Marx derives from abstract labour time. But Marx’s argument that no commodity can possess value without having use-value and that value has no relation to use-value is a classic example of cognitive dissonance, which means holding two incompatible views simultaneously.

The collapse of oil prices in recent times has nothing to do with a labour theory of value, but rather a collapse in demand brought about by the slowdown in the global economy, itself resulting from triple-digit oil prices. The industrial revolution, and modern society in general, was a result of cheap energy. This cheap energy has lasted for most of the period of modern society. The end of cheap energy will signal the end of the present society if no cheap substitutes are available for capitalism. In a similar way, the end of cheap energy signalled the end of feudalism, although in this case a cheap substitute - coal - was found, which further undermined feudal society by powering industrial capitalism.

A society based on cheap energy cannot survive if cheap energy not only comes to an end, but its cost constantly rises as a result of depletion. In this scenario, the only thing which can temporarily keep energy prices down in the short to middle term is a permanent economic slowdown, or depression, or what Richard Heinberg is calling the “end of growth” and James Kunstler “the long emergency”.

Tony Clark
Labour supporter

Talent

I don’t agree with very much of the letter from Victor Jenkins (May 26). To contextualise his points about the Weekly Worker, the Socialist Party produces an absolutely unreadable weekly paper that looks terrible, from a much larger resource base. The issue of poorly produced newspapers is one endemic to the left in its decline (although Socialist Worker and the Morning Star have professionalised their output - proof that you can at least try and shine shit). People in glass houses really shouldn’t throw stones. Actually, in direct contradiction to Jenkins, most CPGB members I speak to are usually honest that their paper doesn’t have the highest production values.

I do agree with his point about the badly-presented typography arising from excessive tracking and leading, which makes the text look either squashed or stretched. The routine of thinking you can just fit any amount of text onto a page without some heavy-duty cutting or rejigging the layout is one that needs to be ditched. However, it’s not impossible to fix these things and pick better/more meaningful pictures - and soon.

I also think Jenkins misunder-stands the point about using contributors who are not CPGB members or supporters. The comrade clearly has a template in mind whereby leftwing newspapers present one undifferentiated view-point of this or that sect and send their readers rapidly to sleep. I think it’s genuinely great that the WW has a diversity of voices and I’m always grateful when my stuff gets used. The point about Mark Fischer’s ‘Party notes’ of the past was not that it was meant to merely sum up some facet of the CPGB’s politics by imposing some kind of spurious sect order on the ‘chaotic’ debate in other areas of the paper (as Jenkins seems to imply). Rather, it highlighted the CPGB’s outlook through attention to the process of debate and clarification that informed the organisation’s understanding of events in a highly entertaining manner.

If all comrade Fischer did was to pedantically sum up the CPGB’s line in the manner of, say, Alex Callinicos in Socialist Worker, then no-one would have read it, much less remember it. However, the fact that comrade Fischer, the best journalist in the CPGB by a country mile, was only ever marginally involved in the paper suggests a real problem in recognising and using talent to its full ability.

Lawrence Parker
email

Toilet paper

Victor Jenkins obviously cares enough to write such a tirade to the paper. As someone who once worked in the printing industry myself, I can certainly commend your printer. My eyes are quite settled by the paper layout.

As for the quality of the paper on which the Socialist Party print The Socialist each week, it’s the cheapest imaginable. It’s quite good as toilet paper (especially when the articles are by Peter Taaffe).

Elijah Traven
Hull