RE: [OPE] markets and socialism

From: Paul Cockshott (
Date: Thu Jun 12 2008 - 07:37:51 EDT

1) I agree with your words: "If enterprise A acquires machines from
enterprise B, it is going to a) do it on its own initiative, b) pay for the
machines with its own bank account, c) own the machines when they arrive.
How is this different from money acting as a medium of exchange in the
classic way?"

D: If you "pay" everibody the same quantity, you are breaking the entire law
of value because the labour force, the main commodity, ceases to be a
commodity. That's essential! Therefore money ceases to be value and becomes
a simple means of account.

I agree with your sentiment here, one must break the wages system, and
that is why Dieterich and I both advocate payment by labour not the
value of labour power, which is quite similar to what you are saying.

The difference is that I do not think it is possible to end the wages
system so long as you retain money. 

But ending the wages system and ending the law of value are not identical.

The law of value is the means by which abstract social labour is distributed
between different activities in response to deviations of prices above
and below values. The law of value would still operate in a syndicalist
system where all production took place in workers co-operatives. The workers
would not be wage labourers but co-operators sharing in the joint proceeds of
sale. But labour would be moved between branches of producion in response
to aggregate money flows into the branches.

Your proposal looks like syndicalism with a law mandating equal wages.

As far as I see you will retain the law since firms will
be taking on or laying off labour in response to demand for their product.
If not, what is the feedback mechanism?


 In the USSR the labour force WAS a commodity: it
doesn't matter whether the range of wages is 1:3 or 1:30. In order to really
change the things, it's necessary that everybody is and feels EQUAL to all


I agree with this, and Dieterich quotes Arno Peters as making the same point.

But you must still face the problem of reducing complex to simple labour.
In the proposals Allin and I put forward, complex labour counts for more than
simple labour when computing the value of products ( since it contains
an amortised element of training cost ), even though everyone is paid
at the same rate for labour actually performed.  This is because the
workers are paid by the state not the enterprise and the enterprise is charged
for their labour according to what it cost the state to train the workers.

In the absence of such differential charging, there will be wastful use of skilled
labour. This will lead to backhand payments in the form of assorted special


 Once arrived at that point --and don't forget that I am speaking in
the paper of a communist society, not a transitional society--, it is not so
difficult to overcome the usual way of thinking that, when faced to both
plan and firms, one should identify the former with socialism and the latter
with capitalism. NO! In a communist society, both firms and planners will be
EQUALLY DEMOCRATIC or, if not, it will be firms the most democratic of both
(since it is easier for one person among 1000 people to see what the other
999 are doing that for one amongst 50 millions).

Here is where we disagree. I would distinguish syndicalism from socialism
and I think your position is a variant of syndicalism. It retains the units
of production as distinct legal personalities which reproduce themselves
by buying and selling --- production of commodities by means of commodities.
As such there will arising conflicting private interests with those working in
one firm being opposed to others against whom they compete on the market.

2) You: "If demand was such that price for say bread was higher than the
costs of a particular bakery, that bakery would register a profit. This
profit, once banked, would be money capital."

D: No, it would be a liquid surplus that the firm could invest, indeed, but
the planners are who will decide the maximum rate of growth (of investment
and output) in every sector.

I would predict that were this instituted, there would develop a huge
political controversy over what to do with this liquid surplus. The firms
would fight and lobby to retain it for themselves -- this certainly happened
in the previous socialist experiences.

The retention of these juridical forms would constantly re-engender capitalistic
forms of conciousness. 


 And since this system is different from the
Jugoslavian regime, in that the growth of the overall labour force will also
be regulated and all the firms will have to take charge of a part of it, in
a partially planned way, and thereforee there will be no unemployment, one
can say that this amounts only to setting up a kind of fiscal system (a
burden) for firms. No one would object that taxes (differential rates for
different sectors) are eliminating the market in a real capitalist society;
likewise, these "taxes in kind" (labour force) wouldn't be an obstacle to
efficiency in a communist society. It would be something like budget
surpluses and deficits at the social level (rather than at the state level).

I think you need to be a lot more specific about the fiscal system
that you envisage. I believe that one of the great weaknesses of the
Soviet system was its fiscal system which rested primarily on the turnover
tax. You have not made clear how you see the fiscal system operating.

By the way, why to use "values" as the regulators of final prices in the XXI
century socialism, as in your system, and not "production prices"? I
criticize Dieterich in my paper because he seems to think that (labour)
values are "good" -a socialist thing- and prices are "bad" (capitalists).
This seems to me clearly wrong since prices are also (labor) prices, aren't

1. Prices of production.
   These are rejected since they are based on the principle of capitalist
   equality -- that all capitals are entitled to an alliquot part of the
   social surplus. If you reject the principle that capital is entitled
   to an unearned income, prices of production must also be rejected.

2. Are prices a bad thing and values a good thing?
   There is some possible confusion perhaps in the way that Dieterich and Peters present
   this. But what Dieterich is really focusing on is the exchange between labour and capital
   and the need to abolish the wages system. But he is propagandising also in countries
   where self sufficient producers are a significant part of the population and there
   is a social echo for the principle of equivalent exchange. I see these ambiguities
   on his part as being part of a coalition building strategy. 

   But more generally yes, price =bad , value = good, since when one denominates everything
   in labour one defetishises economic relations, and exposes them for what they really are.
   As such it strips capitalism of its strongest support, the apparent naturalness of the
   system engendered by money and commodity fetishism.

----- Original Message ----- 
From: "Paul Cockshott" <>
To: "Outline on Political Economy mailing list" <>
Sent: Wednesday, June 11, 2008 2:29 PM
Subject: Re: [OPE] markets and socialism

> Diego
> We shouldn't be impressed by the apparent differences betwen ordinary
> (capitalist) money and money of account. The crux of the matter is
> whether money is inserted in a society where the law of value is still
> governing the economy or instead use value has been enforced by a
> conscious population that aims to finish exploitation and inequalities
> at the world level.
> That is in part a reasonable response, and corresponds broadly to the
> orthodox Soviet account
> of the role of money in the USSR. There however, the plan regulated the
> allocation of use values.
> This gave some plausibility to the Soviet argument.
> In your proposal as I understand it, allocation of use values is not to
> be planned.
> If enterprise A acquires machines from enterprise B, it is going to
> a) do it on its own initiative
> b) pay for the machines with its own bank account
> c) own the machines when they arrive
> How is this different from money acting as a medium of exchange in the
> classic
> way?
> For my part I sympathise with the criticisms  Che made of the USSR, which
> have recently been circulated on OPE-L, namely that it made too much use
> of monetary categories. Your proposal seems to be more in line
> with the Jugoslavian approach, which made even more use of
> monetary and commodity relations.
> Your proposal to charge all labour power at the same price would
> certainly tend to even out disparities in the working population, but
> the enterprises would still, as abstract legal entities, constitute
> capitals. If demand was such that price for say bread was higher
> than the costs of a particular bakery, that bakery would register
> a profit. This profit, once banked, would be money capital.
> Diego
> -----
> The second necessity is to plan demographic growth and localization of
> labour force and means of production at a world level. This means using
> use values again, and this is used again AGAINST the law of value. The
> demographic growth at a rate of 4% or whatever else is a matter of
> secondary importance. The point is the necessity to move masses of
> people from one point to another: specialists and qualified workers
> towards where they are most needed, simple work force to other places,
> masses of specific means of production... In my opinion, there has to be
> a massive net transfer of population from underdeveloped countries to
> developed countries, and the opposite direction is required for means of
> production.
> Paul
> -----
> Is this not what the law of value in a capitalist economy tends to do
> anyway, it is only politically imposed immigration controls that impede
> it.

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