FEASIBLE SOCIALISM? SOME SOCIAL-POLITICAL ASSUMPTIONS

...after all, it is absurd to assume that all opportunities are always taken, or that lack of enterprise cannot occur even in a competitive environment...

...My own list would be longer...

...So what must be sought is a workable compromise between centralization, self-management, and local initiative...

...no more than, in devising a constitutional structure, should we assume that no one would wish to abuse authority...

...One is the familiar one that, without the spur of competition, new technology might simply not be adopted, owing to routine and inertia (and because of the other reasons advanced in discussing Soviet experience...

...How far is this consistent with rotation...

...However, underlying it are some ideas important for any socialist...

...But it may well be found that even a good organizational scheme with a cast of thousands would produce disappointing results...

...There are possible remedies...

...The center will have at its disposal such weapons as credit policy...

...Selucky quite 359 rightly stresses in his book the need for special arrangements in such cases...

...Marx was concerned most of all with demonstrating the existence of exploitation, the nature of the surplus, and its appropriation by owners of land and capital...

...What, then, is undesirable, "wasteful" competition, which socialists would wish to prevent, or at least to minimize...

...The dogmatist evades this issue by seeking a nonexistent species of direct economic-political democracy, in which "society" decides, in which labor is directly social (labor is consciously applied by society for the satisfaction of its wants, without the "detour" of market and value relations...

...Someone might remember what Marx, and Mao, said about "bourgeois rights," and one must expect disputes on the subject of what constitutes excessive inequality...

...Cost-benefit analysis will help, but predictably not everyone will agree on the evaluation of cost or (especially) benefit...

...in his version, the state's industries should aim at providing the means for all kinds of domestic production for use, such as parts for home assembly of radios...

...It is tolerated within defined limits in Hungary and Yugoslavia...

...We know from Soviet (and indeed all other) experience how easy it is inadvertently to create situations in which the pursuit of local interest by labor and management causes conflicts and contradictions...

...However, the 25 acres would remain very valuable, and an appropriate rental should enter into any economic calculation involving their use...

...This is illegal in the Soviet Union today...

...There being hundreds of thousands of different kinds of goods and services in infinite permutations and combinations, a political voting process is impracticable, a ballot paper incorporating microeconomic consumer choice unthinkable...

...If people like it that way, they could form latter-day communes, and pay each other just pocket money...

...Conflicts of interest can go too far and threaten stability...

...It may also seem easier to avoid duplication, to ensure economies of scale, if there are no separate autonomous production units with the right to decide what they should be producing and how...

...Then] there will be the quite basic task of determining the share of total GNP devoted to investment, as distinct from current consumption, and this in turn would affect the rules that are made to ensure adequate savings (either by way of taxation or through the use of [reinvested] profits, or both...

...Some of these corporations will have a strong monopoly position—caused by the effects of technological economies of scale, or because they are public utilities (supplying electricity, telephones, mail, public transport, and so on), which by their nature tend toward monopoly...

...For example, in Great Britain the large majority of farmers pay rent to landlords...

...Is more needed to overcome risk aversion...

...Thomas and Logan, Mondragon, p. 161...

...Permanent revolution" can be a disaster, as 379 China's Cultural Revolution has shown...

...What of patents, inventions, technical progress...

...4 There are good, solid reasons why certain productive activities are very large-scale, and centralized...

...It is the appropriation of profits by capitalists that offends, not profit as such...

...And this, indeed, would require a species of socialist antitrust legislation...

...the word "shareholder" would cause hackles to rise...

...One is to provide that if the elected committee overrules the management and a loss results, the members of the work force suffer a (limited) deduction from their pay envelopes, proportionate to the (limited) bonus to which they would be entitled in the event of success...

...G. L. S. Shackle, Decision, Order, and Time in Human Affairs (Cambridge: Cambridge University Press, 1961...

...A modest bonus based on profits should then reduce or eliminate the opposition to additions to the labor force...

...The democratically elected assembly would adopt, amend, and choose between internally consistent plans for the economy as a whole when these were laid before it...

...Should not the workers then shoulder some of this loss...

...It was reported that in an American medical school some students deliberately sabotaged experiments by other students, so as to surpass them in the highly competitive examinations...

...All benefit from this situation as customers (and users...

...As we are discussing an industrialized, developed country, there is no need to assume that high growth rates would be a high priority...

...The high cost of R & D is a similar point...

...M. Markovic, From Affluence to Praxis (Ann Arbor, Mich.: University of Michigan Press, 1974...

...To DISCUSS ALL THIS in full requires a book, not a few paragraphs, so what follows must be seen as no more than a few thoughts, in a constructive spirit, on a difficult subject...

...But if for some reason the water supply becomes unreliable, this can create a situation in which private water carriers can make a living...

...The lecturer in Italian is unlikely to be able to teach Spanish, let alone repair teeth, drive heavy lorries, maintain jet engines, be a parttime architect, or milk cows...

...p. 364...

...Among the important innovations to which they, and the management, will have to adjust is work-sharing, if technical progress is of a massively labor-saving kind...

...No doubt specialists will continue to exist...

...More Notes on Categories of Producers LET US RETURN now to the list of categories of producers...

...Marx justly noted that competition is apt to destroy competition...

...The other is the workers' lack of long-term interest in "their" enterprise, because it is in fact not theirs: they derive no benefit from working for it once they leave it, having no shares to sell...

...While it is possible that in the very short run the "dividend" for working members could rise if a given firm produced less with fewer workers, is this likely, bearing in mind the following points...

...Customers once lost may never be regained and, after all, prices that rise today may fall tomorrow...

...i) The distinction between governors and governed, managers and managed cannot realistically be eliminated, but great care must be taken to devise barriers to abuse of power and the maximum possible democratic consultation...

...These may prove mistaken, but infallibility is not a typical human characteristic...

...There would be much room for experiment...

...Here again, the Soviet "Stalinist" experience shows that it is possible to "succeed" by having your rivals executed on false charges, just as at a lower level ordinary citizens would denounce their neighbors to the secret police in the hope of acquiring their housing space...

...There would also be the problem posed by the external world, with comparisons made: some group might find that similar people were better off in another country...

...to an extensive program of education and on-the-job training...

...Evidently, this experience is worth very careful study...

...Gorz is right in his formulation: if large scale offers only a modest saving in costs, one's predisposition should be to opt for small scale, on just the grounds that he advances...

...Unless one naively supposes that drunkenness is caused by private ownership of the means of production and advertising by the liquor trade, some individuals will presumably continue to drink to excess (to mark success or to console themselves for failure), much though I regret this...

...We also must bear in mind that some corporations are large because of the power it gives them over the market and not because of efficiency considerations...

...Suppose investments made on credit from the state bank cannot be repaid because of a change in market conditions, inefficient operation, errors of judgment...

...They can experiment, learn from experience, commit and correct errors...

...In this connection, it seems necessary again to stress the importance of scale ("small is beautiful...

...It may be that most citizens will appreciate that the choices of others are a precondition for their own...

...Competition: Will It Have a Place...

...In the former the means of production would not belong to the workers, and the state would have a residual responsibility for their use or misuse, or for debts incurred...

...Technological economies of scale do indeed differ widely in various activities...

...MENTION OF PENALTY leads US into a muchneeded discussion of failure...

...This relates to diseconomies of scale, from the standpoint of the producer, the worker...

...No doubt, such things are desirable, but many citizens are both unattracted by and incapable of handling technology in the home, so this can be only one of the wide range of possibilities...

...The smaller, socialized or cooperative enterprises may or may not act...

...If it is easy to dispose of one's product, advertising is pointless...

...Why must someone be in charge of a building site, an airport, a school, a planning office...

...In other words, competition should prevent abuse of producers' powers...

...However, this implies a much larger transport subsidy, which has an opportunity-cost...

...Let us be realistic: if everyone wanted to speak at general meetings, there would be no time available for anything else...

...They base their productive activities on negotiations with their customers...

...g) As an unlimited market mechanism would in due course destroy itself, and create intolerable social inequalities, the state would have vital functions in determining income policies, levying taxes (and differential rents), intervening to restrain monopoly power, and generally setting the ground rules and limits of a competitive market...

...Obviously, in these instances the revenue of the leaseholder depends on what remains after payment of the lease and other costs, and, if this amount proves excessive, the charge can be increased...

...See E. Domar, "The Soviet Collective Farm as a Producers' Cooperative," American Economic Review 56, 1966...

...Only a few of those who graduate in any subject will be found competent to teach it to students—and students need to be protected from incompetent would-be teachers...

...Surely it would treat all socially useful human effort as productive labor, making an exception perhaps for those items (such as public administration, police) that could be regarded as a social cost, albeit a necessary one...

...One way of combating this tendency is to encourage the creation of new productive units in the sector concerned (by credits on favorable terms, and so on), which would be another important function of central planners in a "socialist market...

...In one, management initiates a production and sales policy that turns out to be a failure...

...The danger is more one of so "political" an economy, especially in income and price policy and investment, that the resultant stresses and strains will lead to economic crisis, which could disrupt both the economic and the political balance...

...Copyright © 1983 by George Allen & Unwin, Ltd...

...People can vote for triviality, watch soap operas on television, leave litter at scenic spots...

...Adam Smith had observed a century earlier that businessmen may conspire together for their own benefit...

...A single integrated service of public transport may make more sense than separate competing units...

...However, the cooperative and small private enterprises take greater risks, can lose as well as win, and in any event it should be possible to limit their take-home pay through the use of the market mechanism, and also by progressive taxation...

...The first group would include banks and other credit institutions, and sectors that operate in very large, closely interrelated units, or have a monopoly position, or both...

...They would doubtless wax sarcastic about "socialism in one country...

...indeed it will have major politico-economic functions...

...Did not someone use, as a parallel, a driver who looks out of the rear window at the road behind him...

...The latter can choose from whom to obtain the goods or services they require...

...Adam Smith noted, 200 years ago, that curates have an expensive education, but earn "less than a journeyman stonemason...

...One must agree with Thomas and Logan when, writing in the context of the Mondragon experiment, they argue that . . . at the meso- and macro-levels, a strong planning agency is essential as otherwise a selfmanaged economy could not function...

...boredom and routine surely are not social "goods...

...to devote more investment resources to, say, retail distribution, public transport, rural clinics, nursery schools, the mass production of deep freezers...

...Some seek responsibility and are good organizers, others work better as individuals, still others are happiest in a small team, and so on...

...As already suggested, it is likely that a large majority would not wish (for instance) to be fed free, suspecting that this would mean that they will be unable to choose the menu...

...There would be drafts of longer-term plans, incorporating changes and improvements in techniques, working practices, living standards, which would be submitted to the elected assembly...

...Large, state-managed undertakings are otherwise engaged...

...Or perhaps an individual has devised some new and economic design or method of production...

...The shops, in turn, must then have the means of obtaining the goods their customers wish to purchase...

...Procedures for the setting up of new social and cooperative enterprises must therefore be devised...

...So we should envisage the degree of inequality that is needed to elicit the necessary effort by free human beings...

...But one must never forget the extent of the abstraction that has been made from a necessarily complex reality...

...However, both in the economy and in politics there is an inescapable price to pay for freedom to act: people may act wrongly...

...Again, we cannot and should not anticipate the extent of the need for differentials or the state of democratic opinion on the subject...

...Socialized and cooperative enterprises would have managers appointed by an elected committee, responsible to this committee—or to a plenary meeting of the work force if the numbers are small enough to make this possible...

...Alternatively, management's proposals are rejected by the work force, which votes for an alternative, and this is the cause of loss...

...Few producers willingly suffer the consequences of competition...

...Yet Soviet experience does not altogether support these assertions...

...Finally, there is competition for high political positions...

...If profits appear to be "excessive" where there is no monopoly power, this may well be a reward for enterprise, efficiency, and anticipation, and the entry of other producers can force down the price by expanding supply...

...Whether oil-bearing land has "value," or is a gift of nature, and whether a gift of nature can have "value," is a point that is more metaphysical than real...

...The right to have free trade unions is an indispensable part of the precautions against abuse of power and illegitimate privilege...

...Efficiency criteria will not be easy to define, but we have seen that these difficulties already exist...

...Other initiatives should be encouraged...

...The state cannot be run meaningfully by all its citizens, and so there is bound to be a division between governors and governed...

...Kornai has rightly stressed the desirability of a degree of difficulty in selling...

...So it is not a question of my preference...

...It is only in fairy tales that people live happily ever after...

...But then nothing practical could...

...An important and highly relevant point was made by Andre Gorz...

...Now, if you can conceive of abundance in this sense, then of course you have a counterargument...

...However, if what the future holds is an extension of the experience of absolute shortage (as exemplified by fish in the North Sea), then society, by its votes, could opt for a rationing scheme of such products, as a temporary measure at least...

...The large majority of goods and services can, however, only be effectively priced in the process of negotiation between supplier and customer, the bargain including detailed specifications, delivery dates, quality...

...The relative absence of competition opens the possibility of "improving" performance at the customer's expense, and this could be achieved just as well within a selfmanagement model as by an "autocratic" director appointed from above...

...The likelihood of a shorter working week, and the widespread encouragement of technical and cultural hobbies ("do-it-yourself '), may well incline many workers to devote their surplus energy to tasks outside the job rather than to "participate" actively in it, especially if to do so requires hours of "homework," familiarity with accounts, and so on...

...There seems no good reason to make some individuals many times richer than others in order to obtain the necessary incentive effect...

...I don't wish to glorify the market and far be it from me to speak of a perfect market or to defend typical Chicago theory based on perfect market competition, which has little to do with the real world...

...What can be done about this...

...For competition to be possible at all there has to be spare capacity...

...Phenomena such as the entrance and exit of firms, and the adjustment process of capital intensity, can only be realized by careful planning and institutional support...

...In the competitive socialized ownership sector and in cooperatives the work force would receive encouragement to participate: to attend meetings, to stand for committees, to put forward proposals, to help elect the working management...

...Earlier on, we have tried to draw the distinction between relative and absolute scarcity...

...Limiting by coupon is unpopular, nobody likes it, so one is left with the damned market, you see...

...The problem, of course, would be to avoid discouraging efficiency and enterprise, which would certainly occur if taxes, leases, rents were such as to penalize success...

...In the Soviet system, one of the many difficulties in the way of enforcing obligations lies in the fact that fines, when levied, are paid out of public funds, penalize no individual, and represent a transfer of state money from one pocket to another...

...The reward of labor would be seen to relate closely to its average productivity, and the 367 degree of income differentiation would be properly regarded as a consequence of several factors: supply and demand for different kinds of labor, social policy, the need for incentives, compensation for heavy or disagreeable work...

...One hopes that an educated and mature electorate will support governments that will keep the economy in balance, avoiding inflationary excess and unemployment, allowing the market to function but not letting it get out of hand...

...For some, its lack of romanticism is a serious defect...

...Total control is impossible...

...I am not particularly fond of the market...

...There will be government, there will be managers in charge of electricity, oil, steel, and railways...

...4) In the unlikely event of all ten producers deciding to increase net revenue per worker by reducing output when prices rise, what is to prevent new entrants from starting to produce widgets...

...the drawing-up and enforcement of ground rules on profit disposal, income distribution, and taxation...

...In those sectors where externalities are likely to be significant, intervention is essential...

...9 Oakeshot, in Self-Management...

...Let "small is beautiful" be an operational guideline in choice of techniques, to be preferred if other things are almost equal...

...179, 181...

...No unequal exchange, because no exchange...

...From this standpoint, "small is beautiful...

...The inventor of, say, penicillin would not restrict its use by patent...

...2) State-owned (or socially owned) enterprises with full autonomy and a management responsible to the work force, hereafter called socialized enterprises...

...Is It Socialism...

...Again, let us hope so...

...Perhaps the best way to define a dividing line between the statecentralized and the autonomous categories is by reference to the range of decisions on production that "belong" at the level of the production unit, as distinct from corporation headquarters...

...The charge may even be identical to that levied by the duke—only now it is a rent that is used to cover social expenditures, not an individual's unearned income...

...Dogmatists unthinkingly opt for the "'worker from the bench," with frequent rotation and recall, and then imagine the elected assembly exercising the tightest control over everyday affairs, which is plainly impossible if its members' main occupations are outside the assembly...

...Of course, the existing producers know this and would wish to avoid it, which would affect their actions...

...It would be the task of the bank, in conjunction with the central planners, to keep watch on the level of credits and on their destination...

...For the centralized state sector, the picture is clear enough: the central planners, the central body that runs the industry (corresponding to the National Coal Board in Britain, or the Ministry of Electric Power Stations in the Soviet Union), make the calculations, take the initiative, create the enterprise...

...Another reason, related to the above, is informational...

...if it is free, this means one is forbidden to charge for it, and so one does not bother to provide it...

...A scientific research team will seek to attract funds that might be allocated to rival teams...

...They sometimes take over smaller units that operate quite efficiently...

...Sharpe, 1975), p. 226...

...There will also be the far-from-easy task of combating inflationary excesses in distribution of personal income and in investments, ensuring as far as possible that the major investments that are made correspond to the expected future pattern of demand, so that the prospective plans are balanced...

...Certainly nothing will be...

...Thus if there were three TV programs run by the same public-service oriented organization, there would be more choice for the viewer than if there were three competing networks, which tend to put on similar programs at peak hours...

...There are two ways, and two ways only, in which they can get these things from other people: they can have them allocated to them by an administrative authority, or can just go and buy them...

...The Yugoslav experience is very much to the point...

...People will still be buying and selling, and "consumerism" is not excluded...

...For example, North Sea and Alaskan oil enterprises require closely coordinated investment and production activities, involving a large number of different units (engaged in drilling, laying pipelines, pumping, maintaining oil rigs, erecting refineries, operating tankers, and so on...

...This is very much a matter of opinion...

...Jealousy is not a noble virtue, but some individuals will probably be jealous of the achievements of others, whether in bed or in the 378 council chamber...

...But to define "socialism" as necessarily worldwide, to dismiss any other kind, is to depart from the realm of the feasible within the time scale of the present exercise...

...However, the problem is more serious when autonomous units orientate themselves in a market environment...

...The center, in this model, would have a number of vital functions...

...How large should this be...

...Democratic votes, including referenda, could be utilized to determine (or choose between) broad priorities...

...The possibility of economic calculation will be present, but freedom of choice involves both uncertainty and the risk of error...

...Living standards will not rise through militant wage demands...

...IF COMPETITION IS PRESENT, and production decisions "belong" at the level at which production takes place, then there could be socialized enterprises with a major role in management for representatives of the work force (cooperative property and private property will be considered later...

...Excessive differentiation could be reduced by a progressive tax (on individuals or on enterprises...

...It would sound quite irrational to these citizens that the owners of, say, 25 acres of London's West End could live a life of luxury and ease, and bequeath the same to their children, merely for authorizing (that is, not preventing) more construction on these acres...

...One possible rule might be that above this limit there be a choice, either to convert into a cooperative or to become a socialized enterprise, with proper compensation for the original entrepreneur...

...The most awkward problem will arise in the case of those socialized enterprises in which management is responsible to the work force...

...it can take the form of regulations (such as measures to protect the environment from pollution), and subsidies (such as for public transport, research), the correction of regional imbalances, and so on...

...The notion that several parties are needed only when there are separate social classes is clearly false...

...In some instances—oil and chemicals are obvious examples—the large firms are providing the inputs for their own 360 processing and manufacturing, so that vertical integration is the best way to ensure the smooth provision of the necessary supplies...

...A manager would have to be appointed pro tern, and contracts signed with building firms, suppliers of machinery, and so on...

...As anyone who has ever worked under inefficient superiors will bear witness, there is such a thing as managerial, controlling skill, a knack for personal relationship as well as specialized knowledge, a desire for and ability to carry responsibility...

...there is, therefore, a profit margin...

...The unsuccessful will be unable to ensure full employment of their material and human resources...

...The complications are just too great, the possibilities to consider far too numerous, and the perception of interest is inevitably affected by the situation within a complex society of various individuals and groups...

...One cannot define the difference in law but, plainly, it exists...

...But this still leaves unsettled the issue of who actually undertakes the task of starting a new firm...

...In most instances of this sort, it must be supposed that organizational and informational economies of scale are of great significance, offsetting the extra cost of corporate bureaucracies...

...How else, except through parties, with perhaps occasional referenda on issues that lend themselves to this procedure...

...Of course, it guarantees none of these things...

...So the most likely outcome is a mixture of election and appointment, with the objective necessity of hierarchy duly reflected in the existence of hierarchy...

...or you must have material allocations, you must have rationing of materials and rationings for the consumer so that their consumption is then limited by coupon...

...c) Central management of current microeconomic affairs confined to sectors (and to types of decision) where informational, technological, and organizational economies of scale, and the presence of major externalities render this indispensable...

...It is by no means excluded that self-managed enterprises can form rings or cartels...

...There is no direct "political" alternative...

...The second problem is more difficult...

...The duty to provide work would override considerations of microprofitability...

...All this shows how the evil side of "competition" can show itself in all spheres, economic and noneconomic, with or without a market...

...The assumption of relative scarcity, and thus of opportunity-cost, is enough to ensure the certainty of some conflict The state, its democratic institutions, will be there to resolve disputes, to settle competing claims on resources, but trade-union and other interest groups (regional, or national in a socialist federation of several nations) could make trouble, and cause an overcommitment of resources, excessive incomes, inflation...

...Harmondsworth: Penguin, 1975), pp...

...J. Kornai, Anti-Equilibrium (Amsterdam: NorthHolland, 1971...

...to a high degree of security of employment...

...01890...

...Of course, ideally one wishes to create a model in which the material and moral interest of the subunit is always in conformity with the interest of all of society but, in a complex and interrelated economy, this must be seen as an optimum optimorum, devoutly to be wished but seldom attainable...

...I wrote to him to ask, but he did not reply...

...Finally, we must expect any meaningful selfmanagement to alter the worker's frequently passive or negative attitude toward work...

...A theater competes for an audience with other theaters by trying to be better...

...Division of Labor, Wage Differentials, and Self-Management THE UTOPIAN NATURE of Marx's vision of a universal man has been expounded and rejected earlier in this essay...

...The citizens can choose, for example, what sorts of private initiatives to encourage or to tolerate, the desirable forms of cooperatives, the extent of workers' participation in management, and much else besides...

...Be it noted that there is no provision for any class of capitalists...

...See the example of Mondragon, below...

...just as, if there is no censorship, we may be sure that some false, objectionable, and misleading matter will get published, and our hope that the citizens will be adult enough to reject rubbish may or may not be disappointed...

...However, having your cake and eating it is excluded by our realistic assumptions...

...The absence of comprehensive planning and the role of market forces would introduce elements of "anarchy," of uncontrollable zigzags, booms and slumps...

...Which in no way prevents the existence of profitrelated bonuses...

...Some, having spare capacity, may be at the stage of increasing returns (falling costs per unit...

...Another minority joins kibbutzim and communes...

...One has reasonable hopes that such conditions would not be frequently encountered...

...This, it must be insisted, is a precondition for the satisfaction of both consumers' and producers' preferences—assuming that customers and producers both wish to have some effective influence on their everyday lives...

...Why must a ship have a captain, a newspaper an editor, a steelworks a manager...

...This would have to be resisted, save where the economies of scale are substantial, whereupon the sector might have to be added to the list of those centrally controlled and administered, to prevent misuse of monopoly power...

...Either some of the world will not be socialist or there will be separate socialist countries, though naturally a union of several socialist countries would be both possible and desirable, and/or a socialist "common market" with close cooperation and perhaps a common currency...

...At least, so it will be said, where there is mutual cooperation there will be no commercial secrecy, all ideas will be freely available for use throughout the economy...

...In the real world, too, many decisions are meaningfully taken ex ante, as when one decides to build additional power stations or signs a long-term contract for the supply of iron ore, based very largely on quantitative, input-output calculations...

...Third, the center would play a direct and major role in administering such "naturally" central productive activities as electricity, oil, railways...

...Enterprises can also merge and divide...

...Those (like myself) who wish to preserve the viability of life in remote islands wholeheartedly concur...

...Mistakes can take the form of inaction as well as incorrect action...

...Clearly, a project completed in five years is preferable, all things being equal, to one completed in eight years, even if the direct costs of the two are identical...

...Gorz, in his French book, quotes these words in English...

...Assume that a hundred people form a commune, and within that commune there is perfect communism: they all share and share alike, and no money passes between them...

...Very valuable ideas on this topic can also be gleaned from J. Kornai's book, Anti-Equilibrium, and from the ideas of G. L. S. Shackle and B. Loasby...

...Procedures will naturally vary according to the different categories of ownership...

...In each case, the "entrepreneur" works, organizes...

...Imagine, for instance, ten self-managed enterprises, all producing only widgets, all trying to expand their share of the market—that is, they have the possibility to produce more than they are actually able to sell, a not unrealistic assumption that must underlie genuine competition...

...it may be that it has become too big to be an effective cooperative...

...Activities that I would find boring give others great satisfaction, and vice versa...

...For a good brief description, see R. Oakeshot, in SelfManagement: Economic Liberation of Man, J. Vanek, ed...

...The picture presented here is prosaic, with an emphasis on practical matters...

...And if somebody says that the market can get out of control, or leads to all kinds of distortions and therefore needs to be watched with care, I can only applaud that sentiment...

...So it must be supposed that the bulk of goods and services will be bought and sold...

...For purposes of efficient use of resources, it is evident that their relative scarcity is a relevant factor, most obviously so when the resources are nonreproducible— as in the case of oil-bearing land...

...My French fellow soldiers thought we were rather scandalously overpaid...

...to narrow differences and fixed wages...

...The Economic Role of Democratic Politics IT IS AN ESSENTIAL PART Of socialist beliefs that there be a real form of economic democracy, that people can influence affairs in their capacities as producers and consumers...

...Some may regard all this, and the presence of markets and competition, as showing that the proposed model is not viable, or not socialist, or both at once...

...It is clear that the role of the state will be very great, as owner, as planner, as enforcer of social and economic priorities...

...A fundamentalist objection to the conception advanced in the preceding pages would stress this...

...Martin's Press, 1979), pp...

...Trotsky in 1920 envisaged the necessity of direction for labor until a time when people achieved such a high level of social consciousness that they would voluntarily go where society needed them...

...A limited bonus scheme linked with profit would be desirable in the socialized (competitive) sector, to provide a material interest for participation in management, despite the probability that this would cause friction...

...f) Workers should be free to choose the nature of their employment and given every opportunity to change their specialization...

...I suspect the voters of a future socialist society would not wish to make it too long, as they (unlike some people today) would appreciate that free goods and services need to be paid for, and that the longer the list the smaller can be the level of personal disposable income...

...Thus a family farm that may be producing efficiently could employ a few laborers, a restaurant might hire a cook and/or some waiters, a couple of clerks could type letters for a holiday agency, a promoter could hire a hall and a string quartet, a repairman may prefer to work for a private garage, and so on...

...While consumer preferences, user needs, should certainly predominate in determining what to produce, the preferences of the work force should play a major role in determining how it should be produced, bearing in mind the need for economy of resources and the technology available...

...Representatives of users would be given an important function, alongside those of the producers and the state, in the top-management echelon of the centralized nationalized industries...

...Typically these are activities that, even in a capitalist market economy, are administered by large corporations, within which the links are those of subordinationcoordination, that is, vertical and not (or as well as) horizontal...

...As for big, structurally significant investments, these would be the major responsibility of the central planners...

...It turns out that a group of seven or eight peasants, left to themselves to organize their own work, can greatly increase productivity, and need not be supervised, in contrast with much larger units...

...2 R. Selucky, Marxism, Socialism, Freedom (New York: St...

...Not everyone will win the school 1,500-meter race...

...and to a financial stake in the ownership of their own cooperative factory, adds up to a system of collective incentives that is not found in private enterprise, which partly explains why performance in the cooperatives has achieved such a high degree of efficiency.' True, the evidence shows that only a small minority actively participates, but it also shows that the bulk of the work force appreciates the right to participate...

...One of the most important and stimulating books on the problems of socialism written during the last few decades is Alec Nove's The Economics of Feasible Socialism, published in 1983 by George Allen & Unwin, Ltd., London, and Allen & Unwin, Inc., Winchester, Mass...

...Finally, democratic vote could decide the boundary between the commercial or market sectors and those where goods and services could be provided free...

...Let no one suppose that this will be simple, or can be made simpler by some kind of socialist magic wand...

...One can cheat and perform vicious acts in the process of "emulation" as well as in "competition," and competition for the favor of customers is most definitely konkurentsiya...

...Both under modern capitalism and in the contemporary Soviet system there is a strong tendency toward mergers...

...This makes no difference either to the desire of the citizens to fish or to the number of rivers and salmon in Scotland...

...One must avoid generating inflationary excess demand for investment goods and building labor, and avoid also a situation in which the same investment opportunity is perceived by many managements...

...Some sectors (such as education and health) would naturally be exempt from market-type criteria...

...There is a moral here...

...So let us start, so to speak, from scratch, by asking some elementary and fundamental questions...

...Human beings vary greatly in the way they like to work...

...This is not the point...

...It is inconceivable, outside fairy tales, that every university will be equally prestigious in all subjects, and so there will be competition to get in...

...h) It is recognized that a degree of material inequality is a precondition for avoiding administrative direction of labor, but moral incentives would be encouraged and inequalities consciously limited...

...And how many of the reasons would apply also to a realistically conceived socialist industrial economy...

...All can obtain from their suppliers, whom they can choose, the inputs needed to make production possible...

...The islanders complain bitterly of heavy freight charges, and make the point that for them the ship is the equivalent of a road, or a bridge, on which profit-and-loss accounting should not (or need not) be applied...

...A great deal must depend on relative scarcities in relation to need, on the general standard of living, and on human attitudes...

...This is far-fetched indeed, being based not only on the totally unselfish man and woman, but also on the naive notion that the good of society can be so defined that any citizen can identify it and identify his or her own role within it...

...Of course, some capital is raised externally, through credits from the banks...

...It appears to me that the extent of the necessary planning would be greater than is allowed for by Selucky in his model...

...Perhaps an earlier example could be reused here to illustrate the point...

...A Legal Structure for Enterprises SUPPOSE WE HAVE A LEGAL STRUCTURE that permits the following species: (1) State enterprises, centrally controlled and administered, hereafter called centralized state corporations...

...In the utopian-Marxist vision all is clear ex ante: the plan is faultless through perfect knowledge...

...But there would also be the possibility of a private entrepreneur actually employing a few people, which makes him an "exploiter," insofar as he makes a profit out of their work...

...the state planning office will have a chief, who will have deputies, and so on...

...These measures are quite different from imagining a "demo376 cratic" vote to reduce (or increase) the output of brown boots or to allocate (or not allocate) sulphuric acid to a given user...

...The limit could be on numbers employed, or on the value of capital assets, and could be varied by sector...

...Thus it seems easier to control incomes if the state and only the state employs labor than if the worker can choose to work for a cooperative or for himself...

...A soccer team must strive to win, but to set out to cause serious injury to the opponents' center forward is, to put it mildly, improper...

...The fullest educational opportunities for youth must be accompanied by generous retraining schemes, including higher education for mature students 368 who have previously repaired teeth or driven heavy lorries...

...Of course, I do not suggest that seven or eight is some optimal magic number...

...there would have to be a penalty...

...Mistakes will happen, contradictions will show themselves, rebels will demand change, conservatives will resist, history will neither end nor begin...

...Just what is to be available free of charge is a matter of democratic political decision...

...it nonetheless requires for its functioning consumer goods and producer goods, it requires things that it must get from other people...

...If it succeeds in this, the author will be satisfied...

...Fourth, there would be the vital task of setting the ground rules for the autonomous and free sectors, with reserve powers of intervention when things got out of balance, or socially undesirable developments were seen to occur...

...The level of incomes in state, socialized, and cooperative enterprises should not vary greatly, to avoid social stress...

...And this is integrally linked with the existence of a wage, that is, a rate for the job, without which the very concept of "profit" ceases to have a statistical meaning: if the entire net income (after paying for inputs, taxes, and so on) is divided among the work force, there is no "profit" as such...

...Wasteful duplication and triplication of this apparently profitable investment could result, and it might be necessary to grant the credit to the firm that promised to be most efficient and refuse it to other applicants...

...The word has undesirable connotations to many a socialist, yet it is inconceivable to imagine choice without competition among suppliers of goods and services...

...In Mondragon, according to a friendly but critical survey, the combination of participation in decisionmaking with respect to organization of work and the distribution of earnings...

...But what of socialized enterprises...

...As techniques and computational methods alter rapidly [this may not] necessarily be so tomorrow...

...Yet the freedom to organize, and in the last resort the right to strike, are human freedoms that matter...

...The first point to make is that income differentials (a species of labor market) are the only known alternative to direction of labor...

...His approach implies a market, but he does not spell this out...

...It seems to me that all this, within reason, is benign...

...Mindful of the need for competition, they might prefer the latter...

...Compared with the inflation, exchange-rate fluctuations, zigzags in interest rates, and unemployment, in what passes today for capitalism, decision-makers might well have better means for being right more often...

...Is the resulting picture attractive...

...Or there could be a mixture, with a core of "professionals" who are members of standing committees and report to plenary sessions...

...But more later 364 on prices, taxes, and incomes...

...To secure acceptance of an incomes policy, of limits on incomes, has proved to be very difficult, especially where trade unions, pursuing sectional interests, make it their business to demand higher incomes and threaten a strike to enforce an incomes policy...

...We naturally assume that the state will exist...

...The "transformation problem" (of labor value into "prices of production") would disappear, as an unnecessary and pointless detour...

...Textbooks on economics usually ignore this factor...

...Ideally, one wishes to have a situation in which the perceived interest of individuals and groups always conforms to the general interest...

...It cannot be open to a meeting of the work force to decide by a majority not to observe delivery obligations...

...Of course not...

...In my view it is possible and desirable to have several...

...Individuals would be free to change their jobs, acquire a different specialization, switch from working for the state to working in a cooperative or on their own account...

...An interesting case is Mondragon, in Spain...

...So long as it is one individual, there would probably be no objection, except from dogmatists so extreme that they are out of sight, away on the extreme far left...

...Conclusion I HOPE that, in presenting a feasible form of socialism, I have nowhere slipped into romantic utopianism, have made no far-fetched economic or psychological assumptions...

...Such factors as scarce natural resources, fertile land, and land in the center of cities would be given the valuation appropriate to the process of calculating their most effective use...

...As earlier suggested, this could be decided democratically in the light of circumstances and experience...

...But at least the socialism here presented should minimize class struggle, provide the institutional setting for tolerable and tolerant living at reasonable material standards, with a feasible degree of consumer sovereignty and a wide choice of activities for the citizens...

...We will be glad to print some cogent and concise discussion on Nove's essay...

...Inevitably there will be claims for subsidies, sometimes justified...

...Not if the limits are observed...

...We will discuss the problem of failures in a moment...

...Income differentials are decided by the work force (apparently after much argument...

...Is it a means of illegitimate enrichment...

...We must bear in mind the need to avoid or minimize the feeling of alienation, and take into account producers' preferences...

...the distribution of the GNP between individual consumption and various other purposes (investment, social services, and so on) will be for the elected assembly to decide...

...In the longer run, "one world" is a possibility, and it may be that the destructive powers of nuclear weapons are such that the survival into the next century of sovereign states makes the survival into the next century of the human race somewhat less than probable...

...Except in moments of crisis or civil war, parties must not be banned...

...A open to challenge, and I hope they will be challenged...

...In arguing that "the labor-managed system appears . . . to be superior by far, judged on strictly economic critera, to any other eco373 nomic system in existence," 9 Jaroslav Vanek makes many points, but the one concerning attitudes, morale, and avoidance of conflict seems to me particularly important...

...On this happy...

...Labor, if not treated as homogeneous, is distinguished only by specialty...

...The essential points seem to me to be the need to link the worker's material incentives with the longer-term health of the enterprise (making the worker interested also in investment, and providing a stake in the future...

...the effort to achieve universal planning by an all-knowing center produces results that no one actually desires (not even the center...

...If one has a market, with sectional interest prevailing over the general interest, then once again there will be obstacles erected to the diffusion of technology...

...The other is that to 362 make technological information available is costly...

...If this result (additional production) does not follow, the mechanism fails to work, and the enterprise thus will make excess profits to no social or economic purpose...

...Suppose the number of people in Scotland wishing to fish for salmon in the rivers grossly exceeds the number of rivers and salmon available...

...Since scarcity will be a fact, there will be pressure to provide more material goods, housing, social services, and so on, but that is not the same as a drive to achieve a radical structural transformation in a short span of time...

...There is no magic wand...

...The Unions' and Workers' Role in Managerial Decisions A QUESTION MARK WILL STAND before the role of trade unions...

...Such a drive may indeed prove inconsistent with reliance on the market mechanism...

...2 But this seems to him to be a temporary, transitional arrangement...

...Here it is essential to avoid a mental muddle: some might say that within a commune, or a good kibbutz, one can have full equality and rotation in jobs (everyone takes a turn at unskilled work such as washing dishes...

...A recent illustration of this from Soviet agricultural experience is the so-called beznaryadnoye zveno, or autonomous work team...

...yet there ought to be...

...However, there must be an attempt to widen opportunities for change of jobs or specialization...

...licenses to set up (or to encourage the setting-up of) production units...

...In a less romantic context, when I joined the British army I was issued a uniform, mess tin, 365 blankets, paillasse [a sort of straw mattress or pallet], dinners, a tent (shared with seven others) to sleep in, and one shilling a day (after deductions...

...And uncertainty of supply leads to self-supply, to duplication on a quite massive scale, to the detriment of economies of scale based on specialization...

...valuable longer study is by H. Thomas and C. Logan, Mondragon (London: George Allen & Unwin, Ltd., 1982...

...Enterprises, Markets, and Competition THERE HAVE BEEN surprisingly few attempts to sketch out a model of the kind that is being attempted here...

...Markets and Democracy Q. This brings me to the question of markets and democracy...

...13 R. Bahro, Die Alternative (Cologne: Europäische Verlagsanstalt, 1977), p. 537...

...Would it attract the opprobrium of critics such as Hayek or Friedman...

...control over prices in the centrally managed sectors...

...Similarly, a rail network, large integrated steelworks, oil, and petrochemical complexes would seem functionally to be large and hierarchical...

...or to launch an investigation into the malfunctioning of any branch of the economy...

...There is no reason why a university professor should necessarily earn more than a garbage collector...

...I share with the millennarians a distaste for the excesses of conspicuous consumption (or keeping up with the Joneses), but this is not an attitude that outsiders can impose, either by decree or assumption...

...Besides, as we have seen, investment cycles also occur in centralized, nonmarket economies...

...Some basic agricultural products should also be on the list of those prices subject to central control...

...But permanent vigilance, permanent reform, will surely be a "must...

...Not a very likely story, to put it mildly...

...Not every competent violinist will succeed in being accepted by the Scottish National Orchestra...

...I know the army is not a commune or a kibbutz...

...note it is appropriate to end this excursion into a feasible, possible future...

...It would also play a role in reducing the danger of unemployment...

...On balance, it does seem likely that most human beings will continue to prefer to avoid responsibility and be glad to accept (appoint, elect) others to take it...

...Some of the nine assumed competitors will not be so foolish as to miss the opportunity...

...B. Loasby, Choice, Complexity, and Ignorance (Cambridge: Cambridge University Press, 1975...

...To cite the words of Shubik, no difference was seen between General Motors and the corner ice-cream store (or indeed between corporations and individuals...

...1) There are indivisibilities in processes of production—process specialization, and so on...

...Nothing need be unchanging...

...The electorate needs to be presented with alternatives, including different economic policies, priorities, strategies, in an organized way...

...Actual wage scales would therefore be influenced by supply of, and demand for, specific kinds of labor...

...However, he made an exception for the sphere of circulation, buying and selling, which adds nothing to value...

...There is a tendency in your argument to equate markets and democracy in a way that can be construed as close to the present argument of the right...

...We all know players who play their hearts out without expecting financial reward, but Soviet experience shows that soccer competitiveness, which cannot be rewarded by open payment ("there is no professionalism"), is rewarded on the side by highly paid part-time "work...

...There would plainly also be functions connected with foreign trade...

...This would be a restriction of choice, of course, but might find its justification in the principle of fairness in distribution under conditions when the supply effect of higher prices would be insignificant...

...375 Foreign Trade — in Brief...

...One, applying particularly to investments, may be the huge initial cost, which is only worth paying if there is some assurance that there will be no "duplicatory" competitive investment...

...Obviously, labor itself would not be paid its "value," in the sense of the amount necessary to cover the labor cost of its own production and reproduction...

...One should seek the level that "minimizes external effects...

...Obviously, if prices fixed by the state were too low, and shortages were endemic, the private sector could become excessively remunerative...

...Market, like commodity production, follows from the separation of the units of production from each other on the one hand, so that their production cannot be for their own use only but for exchange and, on the other hand, from the fact that somehow the multifarious needs of society have to find some sort of expression through contractual relations, which I really cannot conceive of as taking place other than in the form of purchase and sale...

...Sometimes a small number can do the job only if highly labor-saving technology is 358 used...

...There are two counterarguments...

...Suppose there are 16 or more (socialized and cooperative) firms engaged in providing some one good or service...

...How can one combine self-management with efficient use of resources, while avoiding excesses of inequality...

...Such a preference, be it noted, is quite contrary to the Marxist tradition, as Gorz has correctly pointed out...

...He was referring to Ward's perfectly logical conclusion, based on his assumptions, that a price rise could lead to the paradoxical effect of making a self-managed enterprise reduce employment and output.' There are other reasons why this outcome is improbable...

...Water supply is a "natural" monopoly...

...The history of economic thought would explain to puzzled citizens that there was a time when the very rich did no work, and that most economists found this quite natural and built their theories on such a basis...

...The concept of producers' preferences is a useful one to keep in mind, alongside that of consumers' preferences...

...The larger the group, the more difficult it will be for individuals to identify with distant structures that transcend the horizon of their own work organization," to quote Thomas and Logan: 2 Vertical subordination must, where possible, be replaced by horizontal links—by negotiated contracts, agreements with suppliers and customers...

...We have seen that to try to include the whole economy in an all-embracing disaggregated central plan is impossible, self-defeating, inefficient, and also in my view undesirable on social and political grounds...

...When groups of people are free to respond in a decentralized way to necessarily imperfect market signals, errors must happen quite frequently...

...The latter would be the responsibility of management (cleared as required with the elected committee), and the necessary finance would be obtained either from retained profits (and reserves based upon past profits) or credits from the state banking system...

...The manufacturing units operate in a competitive market environment, and the wage rates are based upon those in existence in analogous private industry in that part of Spain...

...Ideally, we want people to seek our services . . . and freely choose our own suppliers...

...Should the parliament consist of professional politicians, or part-timers who have normal jobs in factory, office, or farm...

...Thus, if for any reason the state electricity grid fails in its duty to supply power at reasonable cost to all users, then it should be open to any group that thinks it can do better to generate its own...

...A minority, nonetheless, joins it voluntarily in peacetime...

...Nothing can...

...Thus a contribution to capital from each worker member (in Mondragon a major part of this may be lent to the worker by the cooperative itself, to be repaid out of earnings) makes the member materially interested in the longer-term welfare of the firm...

...3) Cooperative enterprises...

...It is nonsense to assert that fundamental disagreements occur only because of private ownership of the means of production...

...It disorganizes, impoverishes, confuses...

...Here is a summary: THERE WILL BE, of course, foreign trade...

...Majority votes are in any event undesirable as well as unsuitable...

...Political assumption: a multiparty democracy, with periodic elections to a parliament...

...the difference is doubtless explained by his experiences in Czechoslovakia, and by his anxiety to reduce the powers of the state to a minimum...

...A labor theory of value would be appropriate, in the general sense that, all things being equal, goods would exchange in rough proportion to the effort required to produce them, with market forces acting to connect use-value, exchange-value, and the expenditure of human labor...

...Let these people do so by all means...

...Newspapers would seek to attract readers by publicly suggesting that this one should be read, naturally in the conviction that it is a good newspaper...

...There would, however, be some individuals whose incomes would be in effect uncontrolled: members of cooperatives of all kinds, in town and country, and the small private farmers and other "entrepreneurs," plus individual craftsmen and professionals...

...Entry of new firms is an important corrective to such practices, and will be important also in the sort of socialism here envisaged...

...Let us take an example from culture and education...

...A whole number of examples can be cited...

...It is evident that, on balance, this difference should be larger rather than smaller, so long as the profit is not the result of monopolistic price-fixing, though of course in no economy is this a perfect measure...

...This is indeed far-fetched (the example, not the water...

...In our societies today some pleasant and honorable jobs are, by convention, paid very well...

...But this is not likely...

...In the end the decision will be political, and will not depend on the "commercial" judgment of the shipping line or the votes of the seamen who run the ships...

...Why not let him or her go ahead, and produce privately for sale...

...This would be essential to avoid giving an undeserved bonus to whoever happened to be operating in a geographically favorable environment...

...The elected assembly would have a key function here, as would a free press...

...Even if the state is the only employer, different state institutions can compete for labor in a sellers' market and lure away good workers from each other...

...Everyone benefits from large-scale generation of electricity...

...Some Soviet economists, in examining critically their own system, have written intelligently on theories of complex organizations, within which the subunits are free to take certain categories of decisions...

...Let us consider two likely sets of circumstances...

...LET ME RECAPITULATE...

...In the sectors in which competition is desired and desirable, a watch would have to be kept to prevent the creation of informal rings or cartels that would agree not to expand or compete...

...The ship that serves the island operates at a loss...

...369 What we should anticipate is the requirement of an incomes policy with appropriate wage and salary scales, and that this will be a thorny and difficult subject because of the absence of any objective point of reference (other than a labor market...

...Furthermore, competition implies not only winners but also losers...

...Obviously my doctrines could not satisfy its author...

...The Subject of Free Enterprise PRESUMABLY, even the fanatical dogmatist would accept the existence of free-lance writers, painters, and dressmakers...

...With an acceptable distribution of income, and in the absence of large unearned incomes, no better method for arriving at consumer choice is known than that of allowing the consumer to choose, and (save on far-fetched assumptions of "abundance") this means choosing by using his or her purchasing power, by buying in shops—what Soviet reformers call "voting with the ruble...

...A certain lack of realism is a legitimate price to pay for theoretical rigor...

...One must first of all identify the functional necessities of subordination, in industry and elsewhere...

...There would no doubt be some extremists who would be encouraging strikes in the name of an imaginary "real" socialism, labeling the mixture recommended here as "state capitalism" or worse...

...Higher prices and other material stimuli can elicit additional supplies of reproducible goods...

...In the Soviet Russian language a distinction is made between "competition" (konkurentsiya), bad, and "emulation" (sorevnovaniye), good...

...Since this book offers a detailed and realistic prospect of what a democratic socialist economy might look like, and since it has had very little circulation in the United States, we have broken an editorial rule, for the first time in 31 years, and are reprinting here significant segments, slightly adapted (some deletions within the text are indicated by ellipses), with the kind permission of both author and publisher...

...The assumption of democracy makes its task more difficult, not easier, since a variety of inconsistent objectives will be reflected in political parties and the propaganda they will undertake...

...Profits, Prices — and the Theory of Value [After a lengthy discussion of profits, prices, and the theory of value, Nove comments:] MARX, IN HIS FORMULATION of the law of value, related it to productive labor, and related productive labor to exploitation: that is, anyone exploited by a capitalist is "productive" (of surplus value...

...THE MOST SERIOUS PROBLEM, observed R. Bahro in his writing on socialism, is the reconciliation of partial and general interest...

...But in the modern complex world, the ruthless use of union power can do very serious damage to [the unionists'] fellow citizens...

...It is by this standard, among others, that the Soviet model can be judged and found wanting...

...Other claimants on limited resources will be less sympathetic...

...If water flows from taps, private water carriers are an absurdity...

...Economics in the "feasible socialism" envisaged here would be much more concerned than was Marx with defining and discussing efficient allocation, calculation, and valuation...

...If they prefer it, they could opt for work in cooperatives, or on their own account (for in377 stance, on a family farm, in a family workshop, or a service agency...

...We return to the examples of electricity, oil, telephones, steel, railways, and others in the category of centralized state enterprises...

...Would what is called in Russian "the thirteenth month" be sufficient...

...They may be blandly assuming that under their perfect socialism the "associated producers" will always provide whatever is needed in whatever are the needed quantities...

...Thus railwaymen may prefer not to run a late-night train, to the detriment of suburban theatergoers, and one then needs to reconcile conflicting interests...

...However, [the Mondragon experience] suggests certain possibilities...

...Soviet and other experience proves conclusively that comprehensive price control is impossible to administer, that there are too many prices, many millions...

...Experience points to the danger of investment cycles...

...Gorz goes a little too far, perhaps influenced by Ivan Illich, in his belief in do-it-yourself as the basis of producers' satisfaction...

...But this can hardly be said to be insuperable...

...An imperfect world cannot be rendered perfect because we wish it so, and the assumption of original sin is (alas) a more realistic basis for organizing society than the assumption of a noble savage deformed by the institutions of capitalism and the state...

...We all hope that thievery and fraud will wither away, but we should realistically assume that locksmiths and auditors will still have functions to perform, and police, too...

...There is then no unearned income, arising simply from ownership of capital or land...

...Which should be the elective jobs...

...This raises impor366 tant questions of income distribution and incomes policy, to be discussed in a moment...

...The division of functions between professional management, the committee, and the plenary sessions can be determined democratically by each unit in the light of its own experience, and its own mistakes...

...There should be explicit recognition that this implies and requires competition, a precondition for choice...

...All this has its economic and commercial parallels...

...However, imperfect information can also not be ruled out where planning is highly centralized, and the model put forward here places in the centrally planned categories those large investments (in such sectors as energy, steel, heavy chemicals) for which information about future requirements is best collected and analyzed at the center...

...Socialism is for them a substitute religion, worth dying for...

...We must naturally expect the producing enterprises to try to "administer" prices, and wholesale and retail organs would seek to obtain the "markup" they regard as proper, but in the absence of shortages and the presence of choice the buyers can refuse, can go elsewhere, can bargain...

...They seek to devise an optimal decision-making structure...

...But even when there is no monopoly, it is hard to envisage giants of the size of a socialist Du Pont, or Shell, being meaningfully "selfmanaged" by the work force...

...To give one relevant example, E. Domar has shown that a change in the assumptions concerning supply of labor to a self-managed cooperative totally alters its (formal, theoretical) response to a rise in price and/or a change in tax...

...Suppose that that commune produces anything you like, from books to eggs...

...Would a 2:1 or a 3:1 ratio between highest and lowest paid adults be sufficient...

...His idea is that workers should take turns to work in such industries as these, and devote to them as few hours as modern technology makes possible, so as to fulfill themselves in small-scale activities...

...Then there is the equally familiar problem of "socialist bankruptcy," or lack of it...

...How many university professors wish to be vice-chancellors...

...First, major investments would be its responsibility...

...290-98...

...Gorz surely is right that this question of scale, rather than just ownership, can be decisive...

...Several ideas come together here...

...From an interview with Alec Nove by Anders Stephenson in Social Text, Winter 1984-85.q 363 The principal differences between socialized and cooperative enterprises in a competitive environment would derive from the difference in property relations...

...And What of Failure...

...He does not make it clear how the small units are to interrelate...

...Suppliers have a built-in interest in satisfying the cus361 tomer, and so no special measures are required to ensure this (apart from ensuring also that both parties adhere to the "normal" regulations about pure food, correct labeling, and so on...

...At present (let us say) payment must be made to a duke for permission to fish, and this helps the said duke to be rich...

...Neither the manager of one power station nor its workers should have any decision-making authority over electric power generation...

...In both, the firm is seeking to limit uncertainty, to be able to approach what amounts to ex ante planning...

...The society outlined in the preceding pages has the following features: (a) The predominance of state, social, and cooperative property, and the absence of any large-scale private ownership of the means of production...

...they will have an excess of expenditure over receipts...

...discussion paper, intended to provoke both socialists and antisocialists, provoke them into some hard thinking about the possible, about alternatives...

...There would be no large fortunes obtained by those not working...

...can exclude it...

...it is surely no accident that this is the case in virtually every country today, regardless of system...

...Real, not "perfect" competition...

...There could be rental, lease, or lump-sum payments designed to avoid differentiation because of natural advantages...

...Exceptionally there could be a budgetary grant, where the activity carries with it large external economies or is seen as a social "must...

...Once again it must be stressed that Marx believed that petty producers would become unnecessary in a socialist commonwealth, not that they be compulsorily liquidated by the police...

...Suppose one eliminates the duke...

...This does not correspond at all to the distinction that I am trying to make...

...The first is the need for variety, and for opportunities for individual and group initiative...

...Physical capital assets would, of course, be seen as contributing to the process of production, but there would be no legitimation of income arising from owning them...

...This means that we exclude abundance (in the sense of supplybalancing, demand at zero price, the disappearance of opportunity-cost...

...This is a possible approach to agriculture in a country without an established small peasant class...

...the amount returned to the worker when leaving the firm could be varied by length of 372 service and include an extra amount related to the profits made...

...For example, suppose there is clear need for expanding the output of typewriters...

...Markets provide (imperfect) information 374 about what has already happened...

...Clearly, there would have to be devised criteria of efficiency that take into full account social and economic externalities, systemic elements, as well as duty and purpose...

...12 Thomas and Logan, Mondragon, p. 187...

...Many of the propositions put forward here are Notes 1 See A. Gorz, Adieux au proletariat (Paris: Editions du Seuil, 1980...

...Intermediate categories are also possible: for example, in Hungary today small shops and cafés that belong to the state are leased to private operators...

...It seems reasonable to expect national wage negotiations and a national wage scale for the state and socialized sectors, but cooperatives of this nature must have greater freedom to make their own decisions in this respect...

...How much inequality should be tolerated, and how should this be related to hierarchical position...

...People vary widely in aptitude, ambition, and talents...

...Education, health, social security (including retraining grants for those made redundant by technical change), amenities of various kinds (public parks, museums), the list can be a long one...

...There would be danger of inflationary wage claims, especially given the commitment to reasonably full employment...

...Functions of the Center: Planning WHAT, THEN, OF PLANNING...

...It can be convincingly shown that in an optimum order some tasks must be performed in a centralized way and cannot therefore be left to the lowest levels...

...How much differentiation would this require...

...This seems an eminently sensible approach...

...Radoslav Selucky opts for what he calls "social ownership," with "means of production managed by those who make use of them," separated from the state...

...Where the cost of internalizing (that is, reference to a higher authority within the firm) is unlikely to result in benefits that will outweigh the entailed cost in frustration and delay, freedom to decide on the spot should not be limited...

...It is useful to recall W. Brus's correct argument (in The Economics and Politics of Socialism, London: Rutledge & Kegan Paul, 1973) that workers can hope to participate effectively only at the level at which effective decisions are taken, and that a centralized or marketless planning model leaves little to be decided at the level of the enterprise...

...The most obvious example is the electricity network: wherever the actual power stations are located, it can only be the center that knows how much current is needed and which power stations should be feeding kilowatt-hours of electricity into the national grid...

...True, the greater the freedom allowed to enterprises or to individual citizens, the greater the risk that some undesirable act might be committed...

...To abandon price control altogether would plainly be wrong, given that some industries will be centrally managed and in a semimonopoly position...

...According to the Yugoslav rules, "any public body, institution, social organization or group of citizens" may take the initiative...

...Several possibilities occur...

...One can only seek to identify sectors and types of decision in which external effects are likely to be substantial, so as to make the task of taking them into account administratively manageable without requiring the creation of a vast bureaucracy...

...they are largely unnecessary to ensure reasonable effort...

...This was 1939, and I would have change from a bag of fish and chips and a halfpint of beer...

...This is true even in the case of the imaginary, idealized commune...

...Equality in this respect is assured at Mondragon by making every worker's contribution equal—that is, the minimum is also the maximum...

...10 Thomas and Logan, Mondragon, p. 187...

...One is to have a clearly determined wage rate for the job, this not being a function (as it is in Yugoslavia) of the net revenue of the firm...

...Such plans would, of course, be at a high level of aggregation, and would have their primary effect on the pattern of major investments in the next plan period...

...they come, of course, from Schumacher...

...Let it be wool cloth, toothpaste, ball bearings, holiday hotels, or whatever...

...R. H. Coase, "The Nature of the Firm," Economica 6, 1937...

...It is worth quoting an example that seems at first sight to be an argument against me...

...Unless, of course, a nuclear holocaust puts a stop to it all, and to us all, too...

...This is correct, and applies also to the model outlined here...

...This is a kind of long (too long...

...Gorz is no fanatic...

...Outside one of Paris's numerous universities, among the graffiti, was one that read: ",11 BAS LA VIE QUOTIDIENNE" which could be translated as "Down with Weekdays...

...The dogmatists' "alternative" would be either a world socialist commonwealth with production "directly for use," which implies a degree of centralization that surely is both undesirable and impracticable, or perhaps some quite imaginary model of abundance, in which the comrades in West Africa freely decide to supply cocoa and bananas in just the right quantities to the comrades in Western Europe for sheer love of humanity, without the requirement of any quid pro quo...

...Is it proper for the citizens of a town or a country to vote by a 3:1 majority in favor of not providing anything—from string quartets to pumpernickel— which happens to be a minority taste...

...One can and should encourage changes of job and career, but these are bound to have their limits...

...Then the autonomous and competing firms will wish to persuade the customers to buy, to win goodwill by quality and reliability, and to send round brightly produced catalogues suggesting that BLOGGS' WIDGETS are just what is needed...

...In these and in other respects, it is essential to recall the assumptions of political democracy...

...Equally clearly, the "punishment" of error (and the reward of risk) will be major problems, major sources of controversy...

...Indeed, there would be no large fortunes at all...

...Management is elected...

...A large part of investments would therefore be of the "adjustment-to-demand" sort...

...they like having virtually all basic consumer goods and services issued to them free...

...Not all would be interested, since some would pay greater attention to hobbies outside the work process, and have every right to do so...

...Selucky appears to envisage an evolution moving toward one type of producing unit...

...One can also envisage that piece-rate payments would be reduced to a minimum: even in today's U.S.A...

...Total decontrol is also unworkable, and certainly cannot be seen as a socialist solution...

...of this too more in a moment...

...In general, one would suppose that cooperatives in manufacturing would tend to be relatively small...

...In a relatively prosperous society in which the minimum wage assures a reasonable standard of comfort, this does not seem a fantastic prospect...

...Procedures, and Problems, of Self-Management COOPERATIVES WOULD, being genuine, be managed by the members...

...Soccer teams will compete too, and again we must hope that they will do so without money prizes...

...It will be necessary to try...

...Which of these functions require special qualifications and experience...

...Ships will have captains, newspapers will have editors, factories will have managers, planning offices will have chiefs, and so there is bound to be the possibility of abuse of power, and therefore a necessity to devise institutions that minimize this danger...

...The amount it would be paid would be a function of the general level of productivity, with deductions (decided on by democratic means) for social services, pensions, investments, and so on...

...Where peasants actually own the land, their expropriation would present acute political problems, and the problem would need to be dealt with by differential taxation...

...He recommends tripartite supervision, with management responsible to the state, the users, and the work force...

...Nonetheless, it seems clear that in my model of "feasible socialism" there will be some very large corporations of this sort...

...At the other end, so to speak, the picture is also fairly clear: cooperative enterprises, or petty private businesses, are set up on the initiative of the individuals or groups concerned, with or without direct encouragement from the public authorities...

...The manager of one factory within Du Pont, or Imperial Chemical Industries, or Shell may have little or no more autonomy in decision-making than his equivalent in the Soviet centralized planning system...

...What of minority rights in matters of consumption...

...Before discussing the forms this could take, let us consider the role of competition in a model of socialism...

...One is "conversion" of some of the larger cooperative enterprises...

...I would suggest that, subject to limits, this should be allowed...

...But what most socialists regard with distaste, and with reason, are massive advertising campaigns, especially for products almost indistinguishable except for name and label, where the advertising costs become a high proportion of the final selling price...

...To reduce uncertainty, to avoid wasteful duplication, to know in advance the user's requirements, to be confident of obtaining supplies of the needed specification are also reasonable objectives for socialist planning...

...Would this be sufficient to keep trade union militancy within bounds...

...There was no mass movement of this sort even in countries where the Soviet-type system was intensely unpopular— for instance, in Poland or Czechoslovakia...

...So no law is needed to forbid them...

...He does refer to "the remnants of the yet nonsocialized," which would be "fully compatible with the socialist nature of the model...

...For reasons we have discussed earlier, this is an unattainable ideal—just as it is impossible for some central body to examine every decision in the light of the general interest, that is, to internalize all externalities...

...Apart from centralized or monopolized sectors, and the limited area of private enterprise, management should be responsible to the work force...

...One hopes that good sense will prevail...

...Presumably a wise government would avoid this...

...These would naturally have to be enforceable...

...It can be called "informational" advertising, and in part it is that...

...The best that can be done, in the field of investment as in others, is to identify in advance the kind of problem or decision that will have significant external effects, that is, effects (positive or negative) beyond the knowledge or responsibility of those directly involved...

...Not if the market and price mechanism are in working order...

...Second, directly or through the banking system, the planners would endeavor to monitor decentralized investments, conscious of the need to avoid duplication and the financing of plainly unsound projects initiated locally...

...THE LOGIC of the proposed system naturally requires prices that balance supply and demand, reflect cost and use-value...

...The center would also have a vital role in ensuring a balance beween present and future where the time horizon of both management and labor is too short, as well it may be: the theory and practice of "self-management" suggest the danger of overemphasis on short-term gains [on behalf of] the "time preference of the community...

...If, for example, demand increases for anything from microchips to potato chips, the price will rise and so will profits...

...Yet men and women can work well or badly, can try consciously to minimize effort or take pride in their work...

...3) More important, what of goodwill...

...Investments and Growth INVESTMENTS WOULD BE DIVIDED into two parts: those of structural significance, usually involving either the creation of new productive units or the very substantial expansion of existing ones, and those that represent an adjustment to changing demand (or to new techniques...

...This could apply particularly to land and minerals...

...Is the "socialism" here pictured preferable to capitalism, or to the imperfect and mixed "system" that now exists...

...G. B. Richardson, Information and Investment (London: Oxford University Press, 1960...

...Obviously, if Du Pont (for example) owns almost a hundred factories and plants, its size cannot be ascribed to the need to produce its (very varied) output under one roof...

...The possibility that existing firms would fail to respond to a price rise, and simply add to their net revenues, cannot be ruled out, even in real capitalism, given the existence of human inertia and informal rings of various kinds...

...We cannot concern ourselves here with the detailed history and problems of Mondragon...

...Time, too, would have to be taken explicitly into account...

...I am not a trader, and I have no particular love of traders...

...Yet some kind of length-of-service bonus, linked with the long-term level of profits or the 370 value of basic assets, could be paid to a worker who retires or transfers elsewhere...

...It turned out, in the Hungarian experience, that such information circulated more freely if it could command a price...

...A. No...

...It is noteworthy that the large Mondragon complex is divided up for effective management purposes into smaller units, thus avoiding or reducing the danger of alienation of the work force through scale and remoteness...

...5) Individuals (for instance, free-lance journalists, plumbers, artists...

...Successive generations may shift their predominant opinions and objectives...

...As already indicated, losses or windfall gains would be borne or enjoyed by them, subject to tax or (where socially desirable) a subsidy...

...J. Tinbergen, in Self-Governing Socialism: A Reader, B. Horvat, M. Markovic, R. Supek, and H. Kramer, eds...

...It is the alternative to the market that dismays me: the alternative is more objectionable...

...Central planners might also act, and have the choice of granting credits for the expansion of an existing firm or for setting up a new one...

...One is the effect of competition...

...he realizes that economies of scale exist too and cannot, for certain productive activities, be ignored save at prohibitive cost...

...These procedural problems seem unlikely to be insuperable and need not detain us...

...So either the numbers who fish will be limited by a permit system (therefore there will be queues, influence- and string-pulling, and so on), or a charge will be made...

...If you don't and if you have what economists call opportunity costs—defined as a situation in which there are mutually exclusive alternatives—then either you must have purchase and sale, i.e., the market, production for the market, and links of a market type between producer and consumer, and between producer and producer...

...The dogmatist would reply: under a "real" socialism, everyone would pass on useful information for love of his fellows...

...Freedom in this sense for them to function requires, it seems to me, that they be able to go and buy them, except on one assumption, an assumption made by some Marxists and occasionally implied by Marx himself, that under socialism everything will be so plentiful that all they have to do is go to a common store and obtain them by simply bringing a large sack and taking them away with no money passing...

...Subject to what limits...

...Cloth $29.50, paper $9.95, and available from Allen & Unwin, Inc., 8 Winchester Place, Winchester, Mass...

...Let me give another example...

...In Hungary the higher incomes earned in cooperatives did cause friction...

...A complex, large society with a division of labor makes this impossible...

...The choice 357 depends on what functions the parliament is to perform...

...e) Current output and distribution of goods and services should, whenever possible, be determined by negotiations between the parties concerned...

...The important point is by trial and error to devise a pattern of personal interest that would incline the work force to support economically (and socially) efficient decisions...

...The same could apply to shops favorably located in a central area...

...Of course, in the real world "how" and "what" can overlap...

...Cooperative and private activities must be expected to bear the cost of their own mistakes...

...Also correct is the following opinion of Tinbergen: It is highly improbable that the proponents of a "laissez-faire theory" of self-management are right...

...Labor is not homogeneous...

...y possible or feasible socialism I mean a state of affairs that could exist in some major part of the developed world within the lifetime of a child already conceived, without our having to make or accept implausible or farfetched assumptions about society, human beings, and the economy...

...Clearly, this is an inescapable consequence of freedom to act...

...Never let us forget that people have an almost infinite capacity for identifying the (never-too-clearlydefined) general interest with their own...

...These distinctions would plainly be inappropriate for a socialist economy...

...But let us not build an economic system on the assumption of highminded altruism...

...As noted earlier, shipping to remote small islands is almost inevitably a monopoly, since a ship large enough to brave Atlantic storms cannot be profitably duplicated (whereas the innumerable ferries that cross the English Channel can be separately and competitively operated...

...But it can degenerate into the more undesirable and wasteful phenomena: pseudoproduct innovation and differentiation, excessive expenditure on garish packaging, and so on...

...Who is to be penalized, and how...

...One is the interest of the workers in not expanding the labor force, at a time of serious unemployment, because to do so could reduce their incomes...

...and suppose the price of widgets rises...

...Thus I am writing these lines on a Hebridean island...

...Armonk, N.Y.: M.E...

...d) A preference for small scale, as a means of maximizing participation and a sense of "belonging...

...For example, rent or tax levied on farms (whether state, cooperative, or individual) would be varied in accordance with a land valuation survey (cadastre), as indeed is now the case in several countries...

...Similarly, analysis of organizational alternatives can show us which are the sectors, industries, types of decision where the cost of centralization exceeds the benefits (and "cost" here includes the alienation and frustration caused by remoteness of control), or where the cost of not decentralizing can be excessive—all this with a built-in preference for small scale...

...Bank credits would play a major role in financing these "starts," and here the state plan can exercise an important influence: regional problems, labor supply, forecast of future requirements, environmental considerations can and should influence the decisions...

...It also reminds us how difficult it is to adopt rules that securely prevent the wrong sort from emerging...

...Let us, however, put forward here the notion that a state or group of states with a legitimate claim to call themselves socialist will undertake foreign trade...

...So there would be interest rates as well as rent, but these would be payments to the state, not to private individuals (with exceptions, of course, such as renting a room in an apartment, or interest on private savings...

...On this last point, I would again stress that a socialist federation, common market, economic community would be highly desirable (perhaps even essential, certainly for medium-sized, let alone small, countries...

...A discussion of foreign trade follows...

...If parties are not needed or wanted, they will wither away, and individual "independents" will be elected on personal merit...

...This does not exclude subsidies whenever these are considered to be socially desirable, or where external economies are significant (public transport, vitamins for nursing mothers, perhaps housing, and so on) and, of course, some items ought not to be "priced" at all: education, hospitals, parks, and so on...

...our small private entrepreneur works, even when employing a few others...

...EDS...

...The function of this rise in price and profits in a market economy is to stimulate additional production, which, unless there is already spare capacity, requires additional investment...

...How should production be organized...

...but then one does not have to bother about the customer either, as in all sellers' markets...

...He therefore accepts that some branches must continue to produce on a large scale: electricity generation, heavy chemicals, steel, oil, to name a few...

...How can we measure the intensity of desire for anything other than by discovering how many things one is prepared to give up to obtain it (what price one is prepared to pay...

...It is by no means certain...

...Only wild-eyed dogmatists (they exist, alas...

...Is this a dangerous loophole for the "restoration of capitalism...

...The only known way to prevent the formation of parties is to ban them...

...It is none the worse for that, of course...

...2) Self-managed units are usually unwill371 ing (sometimes by their rules unable) to dismiss fellow workers...

...But this cannot be generalized over the whole of society, partly because it is only workable with small numbers of people who know each other and can meet daily, and partly because such communes would attract only the enthusiasts who like this sort of life...

...Reverting to labor's role in managerial decisions in socialized enterprises, one must recall two negative aspects of the Yugoslav experience...

...Suppose that there appears to be an unsatisfied demand for a Peking-cuisine restaurant, Fair-Isle sweaters, a holiday booking agency, wedding dresses, car repairs, mushrooms, sailing dinghies, house-decorating, barley, chocolate cake, or string quartets...

...This rental could be differentiated in accordance with the fertility and situation of the land...

...However, identification of possible sources of conflict does not imply that they are incapable of resolution...

...On the evils of an imposed one-party system it is hardly necessary to comment...

...there is plenty of traffic...

...Similarly, rent as an unearned income of landlords is objectionable, but differential rent must—as we shall see—enter into economic calculations also in a socialist economy...

...It will indeed be a difficult task for the center to steer the rest of the economy by remote control, without detailed orders, avoiding mass unemployment and inflation—difficult, but surely not impossible...

...If any activity (not actually a "social bad" in itself) can be fruitfully and profitably undertaken by any individual, this sets up the presumption of its legitimacy...

...Would an economic optimum be assured...

...Nonetheless, we should also heed the warning of Mihajlo Markovi6: "One of the greatest dangers for self-management is the formation of a small oligarchic group made up of managers, heads of administration, and political functionaries, which tends to assume full control over the workers' council...

...There is no reason whatever why the workers in these sectors should either gain or suffer from the condition of the profit-and-loss account...

...The criticism has a point...

...but innumerable instances of a much more realistic character can be cited...

...The above points must be distinguished from purely technological economies of scale...

...Economists, philosophers, social scientists of different schools will be assured of full employment...

...There is not and cannot be anything antisocialist in the notion that the citizens should seek to satisfy their varied needs and tastes to the fullest extent consistent with the productive capacity of society and the welfare of their fellow citizens (for instance, avoiding pollution...

...There would also be a difference in income distribution and in tax liability...

...Participation is most meaningful at a much "lower" level—at the workplace...

...It will be of vital importance to limit official powers and prevent abuses...

...It is plainly essential, within a controlled market environment, that firms (state, social, cooperative) have the means to make such adjustments, for otherwise the profits they make would serve no rational purpose...

...The bulk of current production and distribution would be within the decision-making competence of the producing units that negotiate contracts with each other...

...Is it desirable...

...In my view it would provide better opportunities for more people to influence their own lives and working conditions, reduce the dangers of unemployment and of civil strife, provide sufficient encouragement to enterprise and innovation, and give some attention to the quality of life...

...A procedure will have to be devised for winding up the outright failures, or for imposing a change of management as a precondition of meeting the debts...

...4) Small-scale private enterprises, subject to clearly defined limits...

...It seems as impossible to ban this as to prevent a theater from putting up posters advertising its next play...

...Some will be monopolists in their sphere, but it should not be an imposed monopoly...

...The bigger the unit in which he is working, the more he is likely to feel alienated, remote from management decisions, a minor cog in a big machine...

...The danger one foresees is not one of a vote to "restore capitalism...

...Few professors indeed would wish to earn more by turning their efforts into garbage collection...

...Such high-level discussions and decisions would directly touch only a small proportion of the work force...

...Indeed, there should be no list...

...The same point about the contradictions "between the interests of self-managing bodies and the demands of the national economy" is made by W. Bienkowski, Theory and Reality (London: Allison & Busby, 1981), p. 269...

...6 This is a very large cooperative "conglomerate," and worker-members who join must make a sizable capital contribution, which earns a rate of interest and is repayable when they leave (subject to a modest deduction, but indexed to the rate of inflation...

...it is only in utopia that all agree (in a pseudo-utopia all are made to agree...

...Perhaps one could devise a regulation limiting such outlays, along the lines of limits on election expenses imposed by a number of countries (and perhaps newspapers should be prevented from attracting readers by printing pictures of unclad blondes on page 3; or maybe socialist readers will have no need or desire for such pictures, who knows...

...Intuitively we surely would all agree that it would be far easier in a group of 50 than in one of 5,000...

...More difficult is the problem of the vertical division of labor...

...The question then arises (again) of how to penalize those who consciously and democratically take wrong decisions...

...However,] a cooperative could freely dispose of its property, and freely decide to wind itself up...

...Such an arrangement best suits cooperative enterprises, but in socialized, self-managed enterprises, too, there could be some scheme that makes reward for long service relate to accumulated profits and/or increase in the value of the enterprise's capital...

...why, the workers may well ask, should they suffer for this, are they not entitled to the pay rate for the job...

...If the land were nationalized, the state would levy a charge (rental, lease) on the family or the cooperative that would operate the farm...

...The word "profit" is not always popular in socialist circles...

...But be it noted that "small" means a small number of workers, which may not imply labor-intensive techniques...

...Interestingly enough, there are wage and salary scales (the reward of labor is not a residual...

...Yet, if prices are economically meaningful, profits at microlevel represent the difference between cost and result, between the efforts of the producers and the evaluation of this effort by the users...

...b) Conscious planning, by an authority responsible to an elected assembly, of major investments of structural significance...

...It is worth dwelling on this point, which, at long last, is being seriously tackled in Western theory, for instance by 0. Williamson (it is enough to quote the title of his book, Markets and Hierarchies), and one should also recall the pioneering work of R. H. Coase and G. B. Richardson.' Western orthodox "theories of the firm" in fact provided no reason for the firm, as an organizing entity, to exist at all...

...There are certain areas in which competition can have paradoxical, negative results...

...The choice must depend on whether shortage of labor or unemployment is the main problem, and whether the labor that is saved is agreeable or disagreeable, skilled or repetitively boring...

...But it can become vicious: thus we read of the Japanese children's educational rat race, which creates misery and drives some to suicide...

...To influence the pattern of production by their behavior as buyers is surely the most genuinely democratic way to give power to consumers...

...to know what investments or output are needed may require the decision-maker to be at the center...

...The major part of the profits is used for investment and reserves, but a portion is shared out among the work force...

...One can imagine a range of possibilities...

...The big state-owned units could be described as constituting the "commanding heights" of large-scale industry and public utilities, plus finance...

...Is it a stage on the "road to serfdom...

...First of all, what categories of producers of goods and services should exist, what forms of property in means of production...

...At the other end of the scale, the centrally run state sector is plainly the responsibility of government, which would determine the price policy to be followed (which could involve, for instance, large subsidies for [low-cost] public transport, or prices far in excess of costs for cigarettes...

...Where virtually everyone is working, where there are no capitalist employers, what tasks are they to perform...

...Another way of defining the functions of the center would be as follows...

...Some of the work on this subject is done at a high level of abstraction...

...But it is unrealistic to build a model in which it is the majority that wishes to live this way...

...We must abandon any idea of doing without a horizontal division of labor...

...The smaller the numbers engaged in a given productive unit, the more likely would be the effective feeling of participation, of "belonging...

...We must take into account the belief of most workers in income differentials, and also the almost universal view that a senior officer in any field should earn more than his juniors...

...it would be idiotic to decree that every household fetch water from wells, or that pipelines be condemned as inappropriate laborsaving technology when the only alternative is little men with buckets running across the desert...