14.01.1999

After the USSR: Impossible utopia

Hillel Ticktin addressed the CPGB’s Communist University ’98 on market socialism

Market socialism as a concept only really revived with the evolution of Stalinism itself - it became particularly important in the 1970s and 1980s as Stalinism started to die. It appeared as an alternative to the complete elimination of the old system. That is, by 1989 the alternatives were either market socialism or what actually came about. In fact, Gorbachev tried to maintain the old system, but he failed and instead introduced the market.

Historically, therefore, one oughtnot to be discussing market socialism as an ongoing fact. But, as I have previously commented, it became clear that market socialism had not gone. Although it had died in a historical sense as the alternative to Stalinism in Russia and Eastern Europe, it remained as an apparent alternative to certain semi-socialist and so-called socialist circles. For instance, Robin Blackburn of New Left Review supports market socialism.

I also discovered to my surprise that it seems to be quite alive in the United States amongst some intellectuals. It is very odd that amongst the left in the USA there is a real attitude that the only alternative to capitalism is social democracy - hence market socialism is alive there. Even today it is an intellectual viewpoint.

At another level, why on earth is anybody in Britain today talking about market socialism when social democracy has so obviously died? Leaving aside America - which might as well be a different planet - the fact is that social democracy in Europe is no more. As I understand it, the government in Britain represents the big bourgeoisie, and quite obviously that has nothing to do with social democracy, market socialism or anything connected with socialism. One might say then, that is that.

However, it does seem the case that in the minds of certain intellectuals - and not just in America - social democracy is still an alternative. For that reason market socialism remains as an idea.

However, there is another reason. If one imagines that the working class has taken power - what then? There is no way that the working class can introduce socialism immediately. There has to be a transition period. Of course, as people know, I argue that we are living in a world transitionary period. But that is not the same thing as saying that the working class has taken power and is proceeding towards socialism. The transition period as thus understood, where the working class has taken power and is introducing its own forms, must necessarily begin with the existence of the market. This seems to me to be the only real period in which it would be interesting to discuss the relationship between the market and socialism. In terms of the current society that would be a real, not a utopian discussion.

The basis of the argument is clear. We start from Marxism, which is essentialist. Now there are various philosophers who argue against this fact. But it is a very hard argument to sustain, as Marx so obviously declares himself to be an essentialist, an Aristotelian, a Hegelian and so on. But there are some Marxists, particularly in the United States, who argue this way.

However, if one starts from essentialism, then it would follow that there is capitalism and there is socialism. There is an essence of capitalism and an essence of socialism. There can be nothing intermediate which is viable. That does not mean to say that you cannot get something which is intermediate. You can get various historical abortions - but they cannot last very long in historical terms.

There cannot be an alternative system. You either have capitalism or socialism and nothing else is possible. Unless you can actually develop a theory which says that there is a ‘third way’, like Blair - though that depends upon whether you think the man is a serious thinker. There is no third way. Within Marxism there is no other possibility: there is only capitalism and socialism. There is no other historical system. Of course, there have been other apparent forms - such as social democracy and Stalinism. But they do appear to me to be these kinds of historical abortions, which only existed for particular reasons - and which could not last. Social democracy is coming to an end and so is Stalinism. If one takes those as examples of historical intermediate forms (what some people call hybrids, though I do not), one can say that they provide the proof of the essentialist argument. That is the fundamental proposition.

This means that one cannot have, on the one hand, the law of value, money and abstract labour coexisting with their opposites. Clearly, if one is talking about exchange value and the law of value, one is talking about money as the universal equivalent, and abstract labour as the basis of value. It is impossible to imagine that they could coexist with the abolition of money, the abolition of the law of value and the abolition of abstract labour - which is a necessary definition of any form of socialism. A fundamental law of socialism is the conscious regulation of the economy by the direct producers.

Obviously, if you have a socialist society which is consciously regulated by the direct producers - and hence is a planned society - there will be no abstract labour. If you do not have abstract labour, there will be no law of value and no market. This is the concrete result of the essentialist proposition I outlined earlier. You have the law of value. You have the law of the plan. The two simply do not fit together.

They can only fit together if you define them differently. In fact, Ernest Mandel did define them differently. If you turn planning into a technical question, and do not treat it as a social relation whereby the direct producers consciously regulate the economy, then of course it would be possible to put them together. For that all you need is a bureaucratic government.

But that is not the real issue. The real issue is whether the workers transform the economy and completely change all social relations - not about having a government which issues orders to the workers who are told to work. Of course, if you want to argue that you can have a government issuing orders combined with the market, that is quite possible. That is basically the proposition of the market socialists.

To make it more concrete. One can say that the aim of capital production necessarily stands more and more opposed to the needs of the individual and of society. In other words, the contradiction between exchange value and use value becomes ever more important, more real - and more threatening. Hence the idea that you can somehow put together exchange value and use value just does not stand up. There are certain obvious cases - for example, health. The idea that you can run a health service on the basis of profit simply does not work. The same with education - it just turns the educational system into a caricature of what it was.

I am personally in the throes of this myself. They are talking about abolishing my department, the department of Russian and eastern European studies, on the grounds that it makes a loss. Of course, on this basis each person either makes a profit or a loss - fortunately I am making a profit; other people are making a loss. This ends up in completely crazy results: the Cold War is over, we do not need you any more. The department of geology has been abolished, as it made a real loss of £500,000. That is the crazy logic you end up in.

What I am trying to say is not just that in the future any attempt to bring together the market and socialism cannot work, but that sort of meshing together actually exists today - and it does not work. In other words, in a declining capitalism, what you get is an increasing move towards sectors that have to be controlled from the centre, which have to be run by government, which have to be potentially planned in a needs-based sector - health and education are obvious examples, but they are not the only examples. Arms production is in a similar position: it is run by the state - it is not run in any country by the arms producers. The state buys the production and effectively plans it. You have the same kind of contradiction existing there. So, in other words, this contradiction between what Engels called the invading socialist society - the need to plan - and exchange value exemplifies itself in the modern economy. This of course reinforces the point of the impossibility of market socialism.

So, use value stands opposed to exchange value. The two poles have to interpenetrate to give rise to surplus value. But at the point where they do not interpenetrate you then have a crisis. And in certain respects this has been occurring over various periods of time. What one has to look at is the way in which capitalists have forced this interpenetration.

I have used the term ‘declining capitalism’ before and I should briefly define it. Some people simply see decline in an empirical sense. They look out of the window and see more buildings then there were before - therefore there cannot be a decline. That is a very silly way of looking at it. Or they look at Gibbons’ Decline and fall of the Roman empire and expect the same kind of thing - the vandals come in and conquer, leaving society to completely disintegrate.

Now one could argue that some parts of the world are disintegrating - and some clearly are. But one does not have to argue that. The question of decline has to do with what is happening to the law of value. Capitalism is governed by the law of value, therefore decline must be a question of the decline of the law of value. In other words, what we have seen is the growth of monopoly, the growth of a situation where private industry is able to control production, control its prices - to the point today where prices only reflect value at the point of a depression. They are pulled into line, but for long periods of time they are out of line. You can see that just by looking at any form of commodity. Take my watch - it could be worth £1,000 or it could be £2. The cost of producing any watch today is no more than £2 or £3, but they can quite easily charge £1,000. Or computers: they charge up to £1,000 or more, but the cost is only a fraction of that. And that is true of a very large number of commodities. There is a vast divergence now between price and value.

The law of value is governing over longer periods of time - compelling capitalist society to fall into line only at certain junctures. I think we are almost certainly at that juncture now. The Scotsman recently talked about a real depression coming about. I think they are correct.

The point is that there is a divergence between value and price. The fact that prices can be pushed so far out of line with value is possible because of the strong presence of very large monopolies - which means that the law of value is governing and is not governing. It is governing over long periods of time, but it is not immediately governing in the old way.

What is actually happening in individual firms is that they are able to organise production. In fact, to a considerable degree, though they have to be based on profits in the long run, on a day-to-day basis they work on something like targets rather than profits - they do not even know what the value is or what the price is. This is so for large sectors of production. The overall result in terms of the particular firm has to be in profits, but in the way they work, the way they manage, they cannot proceed on that basis.

Now this is something any Marxist would expect. It is in Capital. Marx is making the point over and over again about the contradiction between the individual factory and society - the anarchy of capitalist production and the (notionally) planned way in which the factories are actually run. Today huge firms are run like the old factories.

None of this can be undone, despite so-called Thatcherism. Remember we are talking about market socialism here - the idea that you can refine capitalism. It really is a nonsense. Capitalism itself has changed so far, you cannot break up these firms and have the form of market socialism we have been talking about. These forms of decline directly contradict the market socialist utopia.

Why? Because market socialism necessarily requires competition. Somewhat strange, you might have thought, but that is precisely the line they actually put forward. Market socialists require competition in order to ensure what they regard as efficiency. The market socialist argument is that in a socialist society there will necessarily be inefficient forms of production because workers will have insufficient incentive to work. Consequently you have to have to competition.

Our argument is not just that competition is wasteful - which it is. Why on earth do you need two companies producing exactly the same thing? Socialists have always argued against the idiocy of the duplication of resources. But what I want to argue is that it is just not possible.

Now the concept put forward in bourgeois economic texts is that of perfect competition - it is usually admitted that no such thing really exists, but it is argued that capitalism has some approximation to it. We are saying that not only does perfect competition not exist - it has never existed and could never have existed. What we now live in is a society where very little competition exists, but where on the contrary giant monopolies are able to control production in a quite different way. These firms cannot be broken up. Anybody who thinks that they can have market socialism by breaking up IBM into a small number of firms is living in cloud cuckoo land.

Perhaps the best illustration of this is what is happening in Russia. In the old system there was a relatively small number of giant trusts and giant firms. Some of these firms were five times the size of German firms. That remains true today. Soviet economists, having moved to the right, adopted the usual bourgeois logic that what was necessary was to break up these very large firms and then have a large number of small firms all competing.

It did not happen. There are no small firms and there is no sector dealing in small firms. All that you have is finance - over 2,500 banks. You do not have small firms in the sectors that count, in terms of production. It proved impossible to break them up. I mention this to show the futility of trying to introduce something that does not exist in the west - to go backwards in time, as it were, to a period 100 years ago when there were a number of competing firms.

Today, simply because of the increased socialised nature of production - a fundamental of Marxism - the existence of giant firms is inevitable. It is not just a question of monopoly. You have giant firms which are permanent. Bourgeois economics tends to counterpose monopoly on one hand and competition on the other. In fact we have now gone beyond that - giant firms which simply remain and control. Take Phillips, founded in Holland by Jenny Marx’s uncle. A giant firm which is now 150 years old. Obviously, it is not going to go under. In view of this it is impossible to imagine the forms of competition necessary for so-called market socialism.

I have already pointed out how today the law of value tends to govern in the long run, rather than immediately, because of the increasing role of large firms in organisation. But the government too plays an increasing role in this society despite the increasing level of privatisation throughout the world. In other areas the ‘internal market’ has also meant greater central control.

The idea that education or health has become more efficient is absolutely absurd - it has become very much worse. Teachers and doctors have become completely demoralised. Now Britain is not an exception - the same kind of controls are being used throughout the world. This is not happening because we are living a reactionary period - which I do not believe anyway - but because it is a necessary reaction to the growth of the public sector. The private sector, or the capitalist class, simply has to react to it or abandon its own position.

When we look at privatisation from the point of view of the law of value, the private utilities cannot actually raise the level of prices without the blessing of the regulator. It is exactly the same in the United States. The consequence of that is that the prices in the end are governed by the state. In other words, if the state agrees, privatised companies can raise profits - if it disagrees, they cannot. So it is not just a question of internally raised profits, but very much a question of how a particular utility relates to the capitalist class, the government and to the working class.

Privatisation has not removed control over these firms. Yes, it has changed the form of ownership - the reason why these firms were privatised was political. However, they are not able to act simply on the basis of maximising their profits. They are restrained. One could go through all the different aspects which government continues to control - it does not matter really whether they do it through interest rates or the banking system. However they do it, the fact is that governments continue to exert very strong control of the economy.

One is therefore talking of a system which is increasingly governed from the centre. The idea that one can simply remove this does not make sense. What the market socialists are talking about is that somehow what one would have is nationalisation of the means of production, but individual firms within that operating on the basis of profit, each competing with the other. Investment will be controlled from the centre. That is what the market socialists think. It is impossible to imagine how this could work.

But let us imagine such a scenario were to come about. You have a large number of firms, each competing. You have, presumably, an institutionalised health service which is free. What about the workers? What about the ordinary people in that society? What about the managers? The answer of the market socialists has to be that you have managers, and they have to be better paid than the workers - and that workers have to sell their labour power. And that, somehow, the workers have to be controlled, otherwise you do not have a market. If there is a market it must mean that labour power is being sold. If labour power is being sold, the individual worker is therefore alienated. If you are going to have a market, you have to have the law of value. Individual workers sell their labour power, and work under the control of people who also manage other workers. In the end work becomes abstract labour. Every group of workers has to work as hard as possible in order to compete with other groups of workers.

Then you have to ask: why would one want such a society? What is so good about it? You have got workers as they are today, controlled. We have managers who are better paid. The incentive for workers to work harder is that they will get paid better - and if they do not work harder they will get fired. What they do have is a guarantee of employment one way or another - and a national health service and an education system.

But then one has to call into question - what would happen to the health service and the education system? Can you actually have a private or semi-privatised sector and a public sector? Can they actually work together. No, they cannot work together - and what we actually see is that they do not work together. Automatically the interface between the two gets corrupted.

We can easily see that the managers, the executives, sometimes the skilled workers are much better paid than the ordinary workers. Unsurprisingly, these people in the public sector get corrupted one way or another. Perhaps not directly corrupted - as in the US construction sector which often works for the state. What tends to happen is that they bribe the officials who give the contracts. Of course you do not have to bribe - you just have to know the right people and make the right contacts. Again, we know the way in which government ministers very easily move into various positions in the private sector. One of the reasons they are able to do that is because companies want the contacts that give them business. Then one has to say - is that corruption?

The point I am making here is that this is a necessary feature of a division between a public and private sector. It will necessarily be the case when you have a market sector, driven by profits, that it will make money and be better paid than the people in the public sector. Consequently, they will corrupt the public sector.

What will also necessarily happen, as we have seen, is that there will be an attempt to try to control that public sector - on the grounds that the public sector will tend to expand without limits, which is of course true. It is necessarily the case that if you have a needs-based sector, like health, it will expand and expand. Now in a socialist society it will be different - there will be full employment, preventive medicine and so on. But we are not living in that kind of society. So in a market-driven society it will necessarily be the case that the health sector will expand and expand, and absorb all available resources. The public sector itself will expand. Consequently it will have to be controlled - along with the workers.

If you have a market socialism, you will get that division - as you have it today - but multiplied. You will have a war going on between those sectors. And you will immediately have a war between workers and management. In a society where - apparently - you do not have a capitalist class any more, you have to ask - how can the mangers sustain their position? How can the workers not be controlled?

What you will immediately have is a situation where workers will demand higher wages, better working conditions and that the whole form of production be changed. On the other hand, the managers will demand the exact reverse. There is no intermediate position. This would produce a highly unstable society, where you have a division between the managerial group and the workers, between the public and private sectors, and indeed between all the different sectors of that society.

So the natural result of introducing market socialism, if indeed you ever could, is that it would break down - it simply could not work. You are, as they say in Russia, trying to fry ice.

Market socialism is a nonsense, but it remains an apparent alternative - even to people like Robin Blackburn. How can Marxists - or former Marxists - even talk about market socialism seriously? This all points to the low level of Marxist culture. Any real Marxist culture would rule out market socialism as an option. This shows that Marxism has not sufficiently penetrated the intelligentsia or intellectuals.

Postscript: end of counterrevolution

In the ensuing debate members of the Spartacist League described Hillel Ticktin’s views as “anti-Soviet” and “standard anti-communist stuff”. Comrade Ticktin replied:

The Spartacist League has consistently denounced me for at least 18 years. I remember the remarks made by them in San Francisco in 1981 (interestingly, one of the people who denounced me then is now on the right). Nevertheless, at least the SL is still around - unlike a number of other left groups. However, you ought to take account of something very simple. You are extremely isolated. I do not actually think that that is a good thing. It would be a good thing if the left could talk to each other in a reasonable fashion and actually develop, rather than repeating the same old slogans. I was denounced in 1981 for exactly the same thing - and I am prepared to repeat it 100 times over.

The problem with your analysis is not just that you have no analysis, but that it is not based on reality. Just reply to these simple facts. How many workers in the Soviet Union supported the regime? How many workers could possibly have supported Stalin under the post-1929 conditions? They did not - they were totally opposed to the system. And just consider the world around you. How many people outside the Soviet Union actually support what existed there? Very few.

Why isolate yourselves like that? If you are socialists, be socialists - do not go and support something which was an absolute horror in the world and which even today is retarding the possibility of socialism. What you are doing by saying these things is putting people off, avoiding the possibility of socialism and failing to see the nature of the period. For you it must be a period of reaction. But for me it is not a period of reaction. The end of the Soviet Union is a victory. I am sure you will denounce me for saying these terrible things - but I am prepared to be denounced.

It is critical that the Soviet Union has been removed. We are in a completely new period now, a period of the possibility of change. It is not a reactionary period. Trotsky talked about a period of counterrevolution. We have come to the end of that period. The end of the counterrevolutionaries saw the end of the counterrevolution. That is what we are talking about.

We have to analyse this new period, not repeat old slogans