Downloading PDF. Please wait... Issue 2128

Can socialist planning work?

This article is over 13 years, 8 months old
With economic crisis sweeping the globe, many people are asking if there is a better way to organise society. Kate Connelly and Esme Choonara explain how a planned socialist economy might work
Issue 2128
Workers in Venezuela are part of a movement demanding socialist planning in their factories  (Pic:» Jess Hurd/ )
Workers in Venezuela are part of a movement demanding socialist planning in their factories (Pic: » Jess Hurd/

Why do we need socialist planning?

Capitalism is chaotic and extremely destructive. War, hunger and unemployment are all permanent features of the system.

This is because the central dynamic of capitalism is competition – it is shaped by the drive for profit and not by the satisfaction of human need.

This drive for profit also impacts on the environment – with questions of cost overriding any concern for the planet. We need socialist planning to stop the destruction of our world.

Planning does exist under capitalism – but it takes place within individual firms rather than across society as a whole.

Capitalism is also extremely undemocratic. Even in the parts of the world where we get to vote for parliamentary representatives, we have no control over most economic decisions that shape our lives.

Socialist planning is about extending genuine democracy so that we all get an active say in priorities and decide collectively how best to use and distribute resources.

It means the end of the class system that forces the majority in the world to work to create the wealth that is owned and controlled by a tiny elite.

For socialists, planning is about collective control of society so that it can be run in the interests of the majority.

Is the modern economy too complex to plan?

The world today is more globally integrated and more technically advanced than at any time in history.

This does not mean that planning is not possible – in fact new technology makes it easier to instantly communicate and source information around the world.

Look at how this works under capitalism. Supermarkets, for example, put immense planning into transporting, processing and promoting food and other goods from around the world.

The production of medicine is another example of complex planning – but it also shows how it is hindered by capitalism.

Pharmaceuticals need to be tried and tested, and then transported by workers to pharmacies and hospitals. There they are often administered by workers who have spent years being trained in the skills of medicine.

However under capitalism medicines are patented because they are highly profitable commodities.

The result is that some people who desperately need medicines cannot afford to purchase them – and because the market has privatised the intellectual effort invested in creating the drugs, it is illegal for anyone else to use that knowledge to produce similar drugs.

This is what is happening in southern Africa, where there is an accute shortage of retroviral drugs and people are dying simply because they are poor.

Competition is also a barrier to the development of medicine. Companies keep scientific knowledge to themselves rather than sharing it because they hope that, if they develop new cures first, they can grab all the profit for themselves.

If scientists and researchers worked together, cures for diseases could be developed more quickly, relieving much of the suffering, disability and early deaths that occur as a result of things like the HIV virus today.

Wouldn’t planning be too inefficient?

Capitalism is a highly inefficient system. Competition blocks the cooperation that would lead to more productive ways of creating the things that people need.

A democratically planned society could eliminate the waste that is built into capitalism.

Because the current system is unplanned, companies and investors desperately chase whatever they think is the latest source of profit.

This means that capitalism produces too much of some goods and too little of others.

Because production isn’t tied to what people need, crises occur where companies find that their products can’t be sold. Karl Marx explained that capitalism is the first economic system where you can have a crisis of overproduction, rather than a crisis of scarcity.

The madness of this system is that goods pile up unsold at the same time as people don’t have everything they need.

So just before the ‘credit crunch’, companies were engaged in building programmes to make maximum profit out of the ludicrously high housing prices.

Now in every town we see empty, half-built houses. These houses could have been finished off quickly to provide cheap, affordable housing.

But they have been abandoned because they are not profitable. They certainly have not been left unfinished because people do not need homes.

The arms trade and the advertising industry are other examples of wasteful or destructive industries where workers’ skills could be transferred to produce things of benefit to the world.

Working class people are at the receiving end of the inefficiencies of capitalism.

So thousands of workers in Britain and the US now face unemployment at exactly the same time that thousands more are working longer and longer hours just to make ends meet.

The anarchy of capitalism is destroying the very basis of human life – surely an inefficient way to run the world by anyone’s standards.

A planned system would be able to offer rational solutions to the questions posed by environmental destruction and the need to feed everyone on the planet.

Would planning destroy innovation?

Socialist planning is about mass involvement in deciding on the priorities of the economy and general direction of development – something we get no say in at the moment.

But the way that each part of that overall scheme is implemented can be flexible.

So if society decided that engineers who develop weapons should use their skills to produce renewable energy sources instead, the engineers could work out for themselves the best way to do that.

This means maximum flexibility but within an overall, democratically decided plan.

Under capitalism most workers are cogs in someone else’s machine. Because they have no control over the productive process, workers aren’t encouraged to think of ways to improve the way things are done.

But under socialist planning people would play an active part in all decisions and would therefore be motivated to think about better ways of doing things.

Workers – those directly involved in production and service delivery – are the best placed to think up new ideas and understand how to improve things.

Participatory decision-making would also do away with the many tiers of management and bureaucracy that exist under capitalism.

Look at the health service or the education system for example – teachers and health workers have a much better idea about what needs to be improved and how it should be run than the managers who have been introduced into the services in recent years.

Would socialist planning be democratic?

Capitalism is presented to us as a free society based on a series of mutually beneficial voluntary exchanges.

But in reality, the vast majority of people are forced by economic coercion – or direct force – to work and to compete for things like education or housing. Work or starve is the choice we are offered.

Socialist planning is about completely different priorities – producing for need, not for profit. It is impossible to determine what those needs are without extending democracy and involving the mass of the population in decision-making.

But democracy does not have to mean traipsing to a ballot box every day – it means having discussions, making collective decisions and then acting on them.

Why did planning fail in Russia?

When most people think of socialist planning, they think of the horrors of Stalinism – the repressive regime and the authoritarian five-year plans. But Stalin’s planning wasn’t socialist – it was based on competition on a global level.

In the 1917 Russian Revolution, workers took power and for a time experimented with new forms of workers’ control and new ways of living. However, the revolution was isolated as it failed to spread to other countries and was crushed.

Stalin reversed the gains of the ­revolution and argued that Russia’s priority was to catch up with the industrial development of rival countries.

Stalinist Russia became a state ruthlessly shaped by this drive to compete militarily and economically with its global rivals – at huge cost to the workers and peasants of the country.

The lessons of this are that socialism is not possible in a sea of capitalism and that state ownership is not the same as socialism. Socialist planning means that workers must control the economy, not be the victims of it.

Would planning make us all the same?

Capitalism is built on the ideology of the individual, but in fact it crushes the potential of most people. Millions never get to explore their talents or interests.

Socialism is about freeing the potential of human beings from a system where a small group monopolise the resources of the world at our expense. It is about reversing the mass powerlessness on which capitalism is based.

Of course people would have many different and conflicting ideas about what to do – so a socialist society would be characterised by more discussion and argument rather than less.

This doesn’t mean that everyone would be the same or that there would be no room for individuality. But it does mean that there would be genuine democracy – with people sticking by decisions that a majority in the society supported.

How would planning work?

There is no blueprint for socialism – it must be created by millions of women and men changing things for the better. But there is plenty we can say based on past experiences about how things could be organised differently.

Democracy under capitalism is not just rotten because so many politicians are corrupt. It is also because we don’t get a say in many of the real decisions that affect our lives – those that are decided in the boardrooms of companies around the world.

Under socialism, democracy would be an active process from the bottom up. Decisions would mean something, because workers’ control of the economy would mean that they could be implemented.

Groups would have to elect representatives sometimes, but these should be instantly recallable and not exist as a privileged political class.

This means that people can be held to account. It also means that decisions can be changed if it emerges that there are better ways of doing things or if new priorities arise.

How can we get socialist planning?

The basis of socialist planning can only be created by movements fighting for change – where people discuss new ways of running society. There are many examples of this process.

In the Paris Commune of 1871, the Mechanics and Metal-Workers Union argued that equality meant ‘economic emancipation’ which ‘can only be attained through the formation of workers’ associations, which alone can transform our position from that of wage-earners to that of associates’.

The Commune set minimum wages and set maximum prices. It experimented with new forms of decision-making and justice.

It was from his observations of the Paris Commune that the revolutionary Karl Marx saw that the organisation of a future society could grow out of resistance to the old society.

Over the last century we have seen similar examples of workers’ control – in Spain 1936, in France 1968, in Chile 1973, in Poland 1980 and most recently in Argentina and Venezuela.

In Britain in the 1970s workers occupying their factories and hospitals had to organise themselves to make many decisions about the running of their workplaces and judgments about priorities.

Of course, no example of workers’ control can exist for long in isolation or in the context of global capitalism – we need a revolutionary transformation of society to make it permanent.

But these examples show how people’s confidence and expectations are transformed when they are given a chance to organise themselves.

Sign up for our daily email update ‘Breakfast in Red’

Latest News

Make a donation to Socialist Worker

Help fund the resistance