We live in a world where the market decides what we produce, how we produce it, and how products are allocated. How else could we resolve these issues, if not through the market?
It’s important to stress that the market allocates resources and values things very badly.
Control over the productive resources of society is concentrated in the hands of a small number of people. This infamous “1 percent” dominates the big corporations, banks and states.
Different units of the capitalist system compete with each other for profits and power. So ultimately priorities emerge as the outcome of a blind process of competition.
Vast amounts of resources are wasted along the way. Think, for example, of the value that has been destroyed in the present global economic crisis.
This process of competition is guided by fluctuations in prices. But from the point of view of any genuine system of valuation, the results it produces are absurd.
Worthless individuals like hedge fund bosses are paid many times more than useful ones like nurses and teachers. And the price system fails to register many important costs, such as those of the destruction of the planet by industrial capitalism.
In a democratically planned economy, decisions about the allocation and use of resources would be made on the basis of discussion and voting by those directly affected.
Today economic processes are treated as if they were governed by laws of nature known only to a handful of “experts”. Instead we would subject them to collective democratic debate and decision.
Is it possible to plan a modern economy democratically? Isn’t the system too complex for every decision to be voted on?
A democratically planned economy would be based on the principle that the decisions are taken by those directly affected.
This would require a massive decentralisation of power—something that would happen anyway through the revolutionary process that got rid of capitalism.
As far as possible decisions would be taken at the local level by workplace and neighbourhood assemblies, or by the councils of delegates elected by those assemblies.
More complex and large-scale decisions would require different methods. There could be delegate bodies at the city, regional, national and global level to take broader strategic decisions about how to allocate resources.
Mainstream politics is conducted on the basis that most people are passive and that issues are remote from their concerns. But if people win power over their daily lives, we can expect a huge increase in democratic participation.
Aren’t planned economies inefficient? Isn’t that why those in Eastern Europe failed?
A lot of planning already takes place under capitalism. Complex, interconnected economies can’t function without a lot of effort devoted to coordination and to thinking ahead.
The problem is that this kind of planning is highly undemocratic. It reflects the priorities of competing firms and states.
The allegedly “socialist” societies of Eastern Europe and the Soviet Union were one example of this. The defeat of the Russian Revolution of 1917 took the form of the decline of the workers’ councils that made the revolution. The party-state bureaucracy usurped power.
This new ruling class had to compete with Western imperialist powers. This involved concentrating resources on building up the heavy industries needed to produce weapons that could match those of the West.
That’s what planning was about in the USSR. It involved an enormous centralisation of power. And it was driven not by the needs of ordinary working people, but by the imperatives of military competition.
This doesn’t mean that democratic planning can’t work. All it proves is something Karl Marx argued a long time ago—that socialism can only be built on an international basis.
As long as the capitalist system survives, it will, one way or another, reimpose its logic of competition and accumulation on any isolated society that has temporarily broken free of it.
Are there any parts of capitalism that would still be useful in a new society? Or do we have to start from scratch?
Marx argued that capitalism played what he called the “civilising” role of hugely developing the productive powers of humankind. But he was always careful to add that it did so in an exploitative and destructive way.
The role of socialist revolution is to liberate these productive powers, which are, after all, simply the abilities of men and women. We would take back these abilities and place them under collective democratic control.
So a socialist society would build on the productive achievements of capitalism. It would select among its technologies, rejecting some and keeping others.
Moreover, there are institutions that have developed within the framework of capitalism that partly reflect the demands of the workers’ movement to give priority to human need. The health service is an example. We wouldn’t want to keep its bureaucratic structure. But there is much about the NHS that would still be of value.
Capitalism generates huge inequalities across the globe. How could we ensure that a new world does not replicate these?
Socialist revolution can only succeed as a global process. But it might well start in the Global South. The most advanced struggles of the 21st century to date have taken place in countries such as Egypt and Bolivia.
So workers, peasants and other poor people from the Global South are likely to be in the lead of any transformation of society.
The more this is so, the less the risk that the inequalities of capitalist society will be reproduced.
One important priority for any new society would be to move rapidly towards a low carbon economy.
This is necessary not only to prevent chaotic climate change, but also to provide the billions of people who now toil in wretched misery with a decent existence.
Climate change is an issue that underlines the necessity of planning. This week’s climate conference in Durban will show that the big capitalist states have given up trying seriously to cut carbon emissions.
That is because cutting emissions requires allocating resources on an international scale. This would undermine the entire system of capitalist competition. So we need democratic planning to save the planet.
On a wider level, a socialist society will be based on the needs of humankind in general. So whatever standard of material wellbeing it aims at, it will have to be a universal one.
Alex Callinicos is a leading member of the Socialist Workers Party and author of Bonfire of Illusions: The Twin Crises of the Liberal World