Socialism, Part Nine: Market Socialism as an Initially Necessary but Inadequate Social Model

In previous posts on the topic of socialism, I have argued implicitly that a market for consumer and capital goods may be necessary initially. This is so in order to eliminate the exploitation of workers by employers. The amount of work performed by a person would still be related to the amount of consumption goods available and flowing to the those who perform the work. It undoubtedly would not be an exact match between the amount of labour performed and the amount of products received which require the same amount of labour–here Marx’s view of an exact match between individual effort and individual income would not be realized because there would still be markets. From Karl Marx, Critique of the Gotha Programme (a document that contains his evaluation and commentary on a draft program written up on the basis of the amalgamation of two social-democratic parties in Germany in 1875), page 86 of Marx-Engels Collected Works 24):

Accordingly, the individual producer receives back from society after the deductions have been made exactly what he gives to it. What he has given to it is his individual quantum of labour. For example, the social working day consists of the sum of the
individual hours of work; the individual labour time of the individual producer is the part of the social working day contributed by him, his share in it. He receives a certificate from society that he has furnished such and such an amount of labour
(after deducting his labour for the common funds), and with this certificate he draws from the social stock of means of consumption as much as the same amount of labour costs. The same amount of labour which he has given to society in one form he receives back in another.

Here obviously the same principle prevails as that which regulates the exchange of commodities, as far as this is the exchange of equal values. Content and form are changed, because under the altered circumstances no one can give anything except
his labour, and because, on the other hand, nothing can pass to the ownership of individuals except individual means of consumption. But, as far as the distribution of the latter among the individual producers is concerned, the same principle prevails as in the exchange of commodity-equivalents: a given amount of labour in one form is exchanged for an equal amount of labour in another form.

It is unlikely that all individual labour would be immediately social labour at the beginning. Central planning along the lines of the Soviet Union led to dictatorial forms of management that need to be avoided. A move towards the integration of individual and social labour on a wider and wider basis, however, is possible, and perhaps would arise with a move towards the elimination of the principle of organizing production and distribution on the sole basis of labour, especially in an objectified form as market relations between commodities rather than direct relations between producers.

Market socialism thus needs to be conceived as a defective society and not an adequate form of communal society. It is defective on at least four counts: the specific form of the market form, possible disjunction or divergence between average contribution and individual contribution, measuring human need in terms of human labour and the continued existence of a division of labour.

In other words, the possible socialist society that I have described in earlier posts is itself defective because markets still exist. Markets are an expression of a social defect, however necessary they may be at the beginning.

If markets exist to a great extent, then the objectified form of human beings relating to each other still exists rather than in the human form of direct relations between producers. The lives of workers as they work takes on or assumes an objective form as a commodity relations, or relations between things. The assumption by some socialists that market socialism is an adequate form of socialism needs to be criticized since such market socialists assume that the only problem with capitalism is exploitation and not the specific form in which exploitation occurs–commodity relations and money relations. As long as the relation between those who perform labour assumes an objective relation as money, workers cannot by any means control their lives as living human beings.

It is interesting how many so-called Marxists and so-called radicals ignore Marx’s so-called labour theory of value in relation to his theory of money.

In a society characterized by market relations, even when exploitation does not exist, money relations prevent control over our life process since the market by its very nature expresses a lack of control over our life process. Labour assumes a private form, with the labours of different individuals being connected only indirectly via another process–an exchange process, or the conversion of the labour already performed into an objective form distinct from the particular form of human labour. For example, in a socialist economy where workers work at a brewery, if there are still markets, then the labour performed by the brewery workers is still not connected to other workers’ labour as cooperative or communal labour despite the existence of democratic structures at the local, regional. national and international levels. The very form of relations between human beings prevents such control since the form or structure is a structure that negates or prevents simultaneous cooperation between production units. From Karl Marx, Capital, A Critique of Political Economy, volume 1: The Process of Production of Capital, pages 164-165:

Whence, then, arises the enigmatic character of the product of labour, as soon as it assumes the form of a commodity? Clearly, it arises from this form itself. The equality of the kinds of human labour takes on a physical form in the equal objectivity of the products of labour as values; the measure of the expenditure of
human labour-power by its duration takes on the form of the magnitude of the value of the products of labour; and finally the relationships between the producers, within which the social characteristics of their labours are manifested, take on the form of a social relation between the products of labour.

The mysterious character of the commodity-form consists therefore simply in the fact that the commodity reflects the social characteristics of men’s own labour as objective characteristics of the products of labour themselves, as the socio-natural properties of these things. Hence it also reflects the social relation of the producers to the sum total of labour as a social relation between objects, a relation which exists apart from and outside the producers. Through this substitution, the products of labour become commodities, sensuous things which are at the same time suprasensible or social. …

Market socialists generally ignore the form or manner in which the products of labour assume a commodity and therefore a money form. Such a form still expresses, even when exploitation is eliminated, the domination of past labour over living labour. It is a definite defect of social relations, which does not yet permit human beings to direct their own lives as living human beings in the present.

Why then propose market socialism if it has such a defect? The dictatorial way workers were treated in central planning regimes, such as the former Soviet Union, provides evidence that the abolition of market relations cannot be eliminated as easily and as quickly as once thought (although it is probably an exaggeration that such relations were in fact eliminated in such regimes). Furthermore, it has been around 136 years since the death of Karl Marx; commodity and money relations and hence market relations have spread world-wide. To abolish commodity and money relations and hence market relations will take more time since they are more entrenched than before.

However, once workers have gained political power and made major inroads against exploitative relations at work, the problems that will arise from the continued existence of commodity and money relations will need to be addressed. Such problems, if they are to be resolved, will require more and more inroads on commodity and money relations and hence on market relations.

Such problems are implied but not explicitly acknowledged by Tony Smith, for example, when he points out the issue of the possible impact of depreciating funds (page 304, note 15, where he also quotes David Schweickart):

If these depreciation funds formed hoards apart from circulation, undesirable price effects might follow. One possibility is that they could be used to provide consumer credit in ‘socialist savings and loan associations’ that allow people to purchase high-cost items when they do not have ready cash. These associations would not be allowed to provide business credit, since ‘What should not be done is what capitalism does: Merge the institutions that generate and distribute investment funds with the institutions that handle consumer credit. Business investment, as opposed to consumer credit, is too important to the overall health of the economy to be left to the vagaries of the market’. Schweickart 2002, p. 82.

The problem is that consumer credit, by the nature of credit, expresses the possibility of economic crises since credit involves a disjunction or disconnect between the realization of the value of a commodity and the realization of its use value. For example, the purchase of a car on credit involves the transfer of the use value of the car to the consumer and the piecemeal transfer of the value of the commodity to the producer (or to the capitalist in the case of a capitalist economy). The separation of sale and purchase in time via credit and the function of money as a means of payment (where money expresses the realization of the value of the commodity separate from (independently of) the transfer of the use value (such as a car) can easily involve forcing people to work just to pay off their consumer debt–hardly an expression of human freedom. Furthermore, if too much debt is accumulated relative to commodity production, disturbances in the economy can easily arise due to the requirement that money be available (demanded) as money in order to pay off debts; commodity prices might collapse as money becomes required at any cost in order to pay off debts.

There would undoubtedly be other possible disturbances that would arise due to the commodity nature of production–in other words, the existence of the market. Commodity production, money and the market by their very nature express the independence of the economic life process from the producers of their own lives.

Of course, those who advocate market socialism as the practical end of history (see, for example Sam Gindin, Socialism for Realists), do not address the oppressive power of market relations. they claim that markets somehow do not express oppressive relations by their very nature. Mr. Gindin, for instance, claims the following: 

But markets are also fetishized when they are rejected as an absolute and treated as having a life of their own independent of those underlying relations. The place of markets under socialism is a matter of both principle and practicality — and dealing creatively with the contradictions between the two. Some markets will be banished under socialism, some welcomed, and some reluctantly accepted but with constraints on their centrifugal antisocial tendencies.

Markets will be necessary under socialism. 

There are other problems with such views, but I will address some of them in other posts. 

 

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.