ECONOMIC PLANNING - PROMISES & PITFALLS

...This would constitute a grateful nation's reward to companies that have actively encouraged the inflation in health costs in the recent past...

...A system in which oligopolies imposed their profit-maximizing and hidden agenda upon the nation with the cooperation of the government has now turned out so badly that the very same parties are forced to propose a new public agenda in order to carry out their old purposes...

...If the mail were operated on a straight commercial calculus, then rural delivery would either be abolished, curtailed, or charged at an impossible rate...

...This is not a hypothetical question, for it touches upon a series of proposals now before the Congress...

...The failure, in turn, is the consequence of a number of factors— the incompetence, and perhaps the criminality, of management...

...but one will also want to use the concept, for unusurious purposes under transformed circumstances, in that first sense...

...Railway Association at the end of July, calling for $2.5 billion in federal funds for what is in effect the nationalization of the rail roadbed and equipment in the Northeast, is a good case in point...

...This can be resisted, to be sure, but one of the weapons in that struggle is precisely a very chastened sense of how hard and inevitable that fight is going to be...

...My own guess is that such participation will be achieved if it is palpably related to immediate questions of wages and working conditions, which already command the attention, and indeed the passionate interest, of the workers...

...But then, the phrase "democratic socialization," too, describes an extremely difficult and complex task...

...The breakdown of some of the most imCOMMENTS AND OPINIONS 317 portant capitalist mechanisms now guarantee that there will be an increase in public (or quasipublic) property...

...In energy development, a number of projects would have Washington pay the cost of perfecting new technologies and making them commercially feasible, while the corporate sector would then be given all the benefits...

...The heart of the issue is, or should be, a matter of ancient wisdom—that the nationalization of an economic function is not progressive in and of itself but acquires its significance from the social forces that carry it out and the purposes they affect...

...For a number of reasons— economic, political, and social—the decisive centers of capitalist power in America may have decided to sacrifice this entire region and move the economic center of gravity to the Southwest...

...There are two reasons for restating and reapplying this venerable and profound proposition in 1975: that it is often forgotten and that it is now relevant to some very practical politics...

...If the charter of a nationalized rail corporation says that workers' representatives must be on the board of directors, it must provide those representatives with research funds so that they can speak with management on something like an equal basis...

...Third, when dealing with the possibilities of public ownership as they are currently posed, it is necessary to have a very strong sense of the limitations of what can be achieved...

...But how can one be sure that these good intentions would be turned into reality...

...And now we will have to become expert in the "fine print" of nationalization, for it is there, in the details of exactly how this process will be carried out and by whom, that the decisive issues will be settled...

...A similar pattern is emerging with regard to the Post Office...

...First, there is the U.S...

...at worst, it would be chaotic...

...As a result, there are going to be many more overt "planners' choices" in America during the next period.* Washington will end up with a whole series of new responsibilities for economic management, even if under the aegis of what seems to be the Second Coming of Calvin Coolidge, Gerald Ford...

...But if we analyze some current proposals in the light of socialist ABCs, the matter comes to seem quite ambiguous, requiring a response considerably more complex than a cheer...

...This point took on a sad new vitality when the Russians demonstrated that it is even possible to nationalize an entire economy and wind up with a totalitarian, conservative, and class-ridden structure...

...Had that been done—and there was never the least political possibility that it could be—the present management of those multinationals, with all their political power in the Congress, would have been given a public-interest license to carry out their private-interest policies...

...Certainly, there should be provisions for employee and public representation on the board of directors (an idea put forward by the rail unions when they fought for national ownership of their industry right after World War I...

...Similarly with railroads...

...So it is not enough to provide legal rights...

...In Nixon's proposal (and certainly in any rewriting of it that Gerald Ford may make), in the Ribicoff-Long bill, and in other conservative schemes, the private health insurance industry will, in effect, be guaranteed a huge profit at the taxpayer's expense...

...So also with the main alternatives to the Kennedy-Corman health security bill...

...The point is not to have profligate and/or pernicious subsidies, 316 COMMENTS AND OPINIONS which is a hallmark of the present system despite its prattle about efficiency, but to have conscious and democratic subsidies...

...the unplanned nature of federal planning, which permitted the overwhelming bulk of post-World War II transportation subsidies to go to trucks and planes while the most efficient system in the land was destroyed...

...In these pages I need not belabor the fact that this mythic past of free men and free markets never existed...

...In this area, the United States should behave like every other industrial democracy and, in the name of national social policies, subsidize such services (and, like the other industrial democracies, pay for them out of the profitable operations in a nationally owned communications sector...

...The exact wrong way to proceed in these matters is the one the nation has adopted, i.e., to determine the subsidies by a political battle among private corporate interests as to which shall dominate the unplanned plan implicit in federal handouts...

...Let us hope that under such circumstances the public may just be able to seize democratic control of the public agency...

...That, however, is more easily said than done...

...So THE FIRST contemporary point to be made about public ownership is that socialists, democratic leftists, or anyone who objects to being ripped off should oppose it when it takes the form of simply socializing the losses of a given economic function and privatizing the profits...

...But it would provide an arena—a single company—in which the fight for democratic and social control would not have been lost before it began, as in the case of an entire industry...

...This is why the classic socialist ABCs about nationalization are once more so very apropos...

...Not so coincidentally, service will be curtailed to areas where it is "uneconomic," thus further accentuating the decay of the less fortunate regions of the Northeast...

...We know from the European experience that this can mean a nationalized enterprise that acts as unconscionably as a capitalist company...

...Therefore they often fail to occupy the seats reserved for them...

...The mechanism for developing the Plan provides for worker representation...

...It is impossible to nationalize a whole advanced economy overnight...

...From Bismarck (or perhaps even Napoleon III) on, it has been clear that capitalist governments can utilize public ownership as a means of propping up and rationalizing the status *In much of the mainstream literature "planner's choices" are counterposed to "consumer's choices," which suggests that sovereign buyers once instructed obedient corporations to fill their individual needs, an idyll which is said to be coming to an end...

...it received further, and unfortunate, confirmation right after World War II when a significant number of West European nationalizations (and even an expropriation or two) helped modernize and strengthen capitalist society on the continent...

...The proposal made by the U.S...

...Simply put, who will make the planner's choices, and how...

...Management, on the other hand, is able to hire platoons of technicians and thus to make real gains from what effectively thereby becomes a publicly subsidized system of market research for private, corporate use...

...The government is going to have to step in, and massively...

...But whatever the details of the disaster, its imperatives are clear enough...

...It could provide a training school for those forces that could eventually participate in a democratic socialization of the entire industry, a move that is as necessary in the long run as it is premature in the short run...

...There is, however, a danger in the method urged here...

...This reasoning has led me to favor Senator Stevenson's much more modest suggestion: the creation of one federal oil and gas corporation...

...The French experience with indicative planning is instructive on this count...

...Therefore one is dealing with the extremely complex problem of establishing public property within an economy that is still basically dominated by private corporations...

...COMMENTS AND OPINIONS 315 quo...

...Second, the integrated public ownership of an economic function should allow for a rational policy of national subsidies...

...And if the representation system itself is to be something more than a formality, there has to be a lot more thought and experiment on how to create a situation in which the workers will actually want to exercise their powers at the base...

...The private sector now is skimming off the lucrative parts of this activity—United Parcel Service, for example—leaving the public sector to subsidize magazines, deliver junk mail, and raise rates in the name of an impossible (under these conditions) goal of self-sufficiency...

...It is obvious that if nationalization—of a company or an industry—is not to be merely a bureaucratic act that might inadvertently lay the basis for corporate collectivism, there must be democratic structural safeguards built into the public enterprise .itself...

...But they must be made consciously, with a full and precise understanding of their cost...

...No longer will they have the luxury of making the propagandistic arguments for public property...

...Subsidies that violate the capitalist calculus are necessary if the society is to be humane, of course...

...Positively, the counterproposal should urge that the entire function be nationalized—that all of the railroads be taken over, for example, or that health care be financed publicly, through income tax revenues, and not by means of a private, corporate intermediary...

...At the height of the gas shortage in the winter of 1973-74, there were liberals and trade unionists who seemed to think that the most "Left" position was to advocate nationalizing the oil industry, lock, stock, and barrel...

...That tired cliche of contemporary academic economics—that there is an interest rate on money so long as scarcity persists— usually confuses interest rate as a technical tool for estimating costs, and the interest rate as an economic phenomenon under capitalism, which channels billions to a parasitic class...

...Permit me to add just a detail or so to what has been said about them...

...But the French unions, which are not as institutionally solid as their American counterparts, simply do not have the expertise to take advantage of this juridical right...

...At best, that would amount to conferring federal power on the existing private technostructure, which would not have its current values and policies transformed in the process...

...It was this system that permitted Washington to subsidize trucking and airlines while letting the railroads, the most energy-saving and environmentally benign form of transportation, go to wrack and ruin...

...One fights to abolish interest (and unearned income of every sort) in that second sense...

...Even the Tennessee Valley Authority, which in many other respects is a model of public ownership, has acted irresponsibly toward the environment, encouraging the strip-mining of coal in Appalachia...

...The battle between "socialism"for the rich and socialism for the majority will be joined in the Congress and the White House...

...Such a prediction, one might suppose, should immediately call forth leftist hurrahs...

...So the crucial criterion with which to evaluate the emergent American dirigisme is the social content of the planning and ownership that are being urged...

...The coming period, then, will challenge American socialists...

...Take the specific case of energy...

...They would continue to adhere to the latter, in part out of habit, and in part because their newly nationalized industry would exist within the still corporate web of the American economy...

...If there were overall national transportation planning, with a conscious and democratic choice of the best "mix" among highways, railroads, planes, waterways, and the like, then commercially unprofitable but socially useful activities could be underwritten from the profits of the system as a whole...

...In advocating this course, I was quite aware of Stevenson's own conservative rationale for his bill and I had no illusions that, in the unlikely event that it passed, it would change much of the energy power structure...

...and so on...

...This scheme is the result of the total failure of the private sector...

...There is a tendency, then, for islands of social property in a bourgeois sea to sink beneath the waves...

...That requires a much more rigorous and accurate accounting system than the one that business constructs out of mirrors...

...It essentially suggests that the nation cope with the bankruptcy of the Northeastern railroads by taking ownership of the resources that the private sector has already run into the ground (roadbeds, equipment), while leaving profitable functions in private hands...

...The Weimar Constitution guaranteed the right of workers' councils, but nothing was done to bring them about...

...Similar conditions exist in all, or part of, the health services sector, energy, communications (the Post Office), New York City, and the capital markets...

...Railway Association plan of late July...