Does economic federalism work?

zarathustra
Posts: 197 Joined: 08-12-07
Submitted by zarathustra on 10 May, 2008 - 18:49.

Although I certainly disagree with many of his beliefs, I found mutualist writer Kevin Carson's thoughts on economic federalism interesting:

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The industrial syndicates and federative planning bodies, over time, inevitably accumulated permanent staffs of planners and experts. Regardless of how nominally democratic those bodies were--being staffed by delegates recallable at will, etc.--in practice the elected members deferred to the expertise of their permanent staffs. The elected syndicates and federations, nominally responsible to the workers, came to function as rubber stamps for the de facto Gosplans. And of course, once the principle of planning is substituted for that of the market, there is no way to avoid such ossification. [..] The answer is to minimize reliance on organization itself as much as possible. Part of the problem in Spain was the existence of federal and regional bodies superior to the individual factories. The factory management, although elected by workers, came to identify with the federal bodies rather than the workers to whom they were nominally responsible. Had there been no federal bodies, in which they could meet with their counterparts from other factories to commiserate on the atavism and laziness of "their" workers, the sole source of pressure on them would have come from below--from the workers who could recall them at will.

http://www.mutualist.org/id107.html

This seems kind of depressing, but I guess it doesn't necessarily have to be seen as such. The Argentinian example of autonomous worker-owned firms is a source of inspiration, acting on a free market typified by cooperation and limited "competition" (in the non-negative sense).

Thoughts?

Sean Siberio
Posts: 107 Joined: 03-04-08
11 May, 2008 - 00:16

Michael Walzer one said that this kind of economic planning produced a "socialism [that] means the rule of the men with the most evenings to spare", and thats essentially true here, when talking about the various organs that would arise to fulfill such planning functions. In the novel The Dispossessed, the bureau that assigned or offered jobs, ostensibly in a total neutral and machine-controlled way, had its own internal logic that most of the residents simply deferred to. A number of utopian communes in America found themselves in the ridiculous situation of constantly having to discuss even the smallest thing and negotiating their "labor hours" to be able to meet all the mandatory discussion times.

This will be especially true for things that require complicated logistics, such as the transportation industry, especially the aviation sector, but less so for products that can be translated from raw material to finished product in one factory. Another question is, to what extent do we want to rely upon factories so specifically built for the needs of capitalism (and hence over-production), as opposed to say changing them or tossing them overboard in favor of more decentralized production methods.

zarathustra
Posts: 197 Joined: 08-12-07
11 May, 2008 - 01:10

I guess the other issue is distribution in a non-market economy. I have to bite my tongue to admit it, but the Austrians were correct about the problems of non-market production.

Sean Siberio
Posts: 107 Joined: 03-04-08
11 May, 2008 - 03:57
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I guess the other issue is distribution in a non-market economy. I have to bite my tongue to admit it, but the Austrians were correct about the problems of non-market production.

Theres problems, in a sense, but they mostly focus around making sure that planning does not become a multi-headed hydra, and a form of inequality itself. And thats why we talk about the problems of bureaucratic bloat, so we don't end up with some absurd 5-year plan model, based not around peoples needs by magical fairytale production targets that have no bearing on reality other than to get some fool a promotion.

zarathustra
Posts: 197 Joined: 08-12-07
11 May, 2008 - 05:12

Well again, what Mr Carson says is that

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Production can never be undertaken solely with a view to use, without regard to exchange value. The reason goods have value today is that it requires effort or disutility to produce them. With or without formal market exchange, there will still be an implicit exchange involved, labor for consumption, involved in the production process. It implies a judgment, if a tacit one, that the use value of the good is worth the disutility to the worker who produces it. And fairness and unfairness will continue to exist, although concealed (along with the law of value) behind a "collective" planning process. Either the labor entailed in producing the goods consumed by a worker will equal the labor he expends in production, or they will not. If not, somebody is being exploited. The law of value is not simply a description of commodity exchange in a market society; it is a fundamental ethical principle.

http://www.mutualist.org/id107.html

In other words, even a democratically planned economy is still based around "magical fairytale production targets" as you put it, Sean.

Sean Siberio
Posts: 107 Joined: 03-04-08
11 May, 2008 - 06:01

Well, frankly, I think his position is bullshit. His argument, whilst true in the sense that unfairness and inequality CAN be present in a planned economy, be it centrally planned or not, is nonsense when it comes to the idea he suggests that the "value" of the workers contributions and what he then consumes are "hidden" because there is no market price on them. They're not "hidden"; they're repudiated.

When Marx said "from each according to his ability, from each according to her need" he wasn't hiding value in a planned, communal economy, but acknowledging that the communist project overthrows this "law of value" and in fact, the commodity itself. DeBord took this to its logical conclusion:

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46
Exchange value could arise only as a representative of use value, but the victory it eventually won with its own weapons created the conditions for its own autonomous power. By mobilizing all human use value and monopolizing its fulfillment, exchange value ultimately succeeded in controlling use. Usefulness has come to be seen purely in terms of exchange value, and is now completely at its mercy. Starting out like a condottiere in the service of use value, exchange value has ended up waging the war for its own sake.

47
The constant decline of use value that has always characterized the capitalist economy has given rise to a new form of poverty within the realm of augmented survival — alongside the old poverty which still persists, since the vast majority of people are still forced to take part as wage workers in the unending pursuit of the system’s ends and each of them knows that he must submit or die. The reality of this blackmail — the fact that even in its most impoverished forms (food, shelter) use value now has no existence outside the illusory riches of augmented survival — accounts for the general acceptance of the illusions of modern commodity consumption. The real consumer has become a consumer of illusions. The commodity is this materialized illusion, and the spectacle is its general expression.

48
Use value was formerly understood as an implicit aspect of exchange value. Now, however, within the upside-down world of the spectacle, it must be explicitly proclaimed, both because its actual reality has been eroded by the overdeveloped commodity economy and because it serves as a necessary pseudo-justification for a counterfeit life."

zarathustra
Posts: 197 Joined: 08-12-07
11 May, 2008 - 06:28

Well that's precisely what market-socialists say -- exchange value cannot be separated from use value. In a genuinely free market, exchange value is also use value as there is no government intervention in the economy to cost shift. In capitalism the cost principle is violated by government externalisation of costs. Without externalisation of costs, production for exchange is production for use. The abandonment of use value in favour of exchange value is actually a violation of the principles of exchange value (and i understand). In a genuinely free market society the scenario envisaged by Adam Smith would actually exist. Capitalist apologists say that people pay for what they want and get what they pay for -- exchange values are production values. But this is not the case as capitalists firms are massively subsidised, competition is systematically crushed, and the working classes have been both stripped of the means of production and equal bargaining power.

Re: Marx and overthrowing exchange value. Kevin Carson is saying that this overthrow is precisely illusionary and potentially hides simple exploitation of workers. For instance, while we may like ice-cream more than pneumatic drills, it would be grossly unfair to treat the ice-cream man and the manufacturer of pneumatic drills as economically equal or even tip the balance in favour of our ice-cream man! wink

I don't pretend to understand the ins and outs of this stuff, but I'm trying to wrap my head around it all.

Sean Siberio
Posts: 107 Joined: 03-04-08
11 May, 2008 - 07:28
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Kevin Carson is saying that this overthrow is precisely illusionary and potentially hides simple exploitation of workers.

And the point of the DeBord quote is to illustrate that the commodity itself, and the logic and the system in which it dominates, are an illusion.

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For instance, while we may like ice-cream more than pneumatic drills, it would be grossly unfair to treat the ice-cream man and the manufacturer of pneumatic drills as economically equal or even tip the balance in favour of our ice-cream man! wink

Your example is nonsensical. You're arguing, I presume. that the exchange value of the pneumatic drill should be higher than ice cream, presumably because its "use value" is also higher, though you don't explain why this is. In fact, this is the fatal flaw that the commodity (which is NOT the same as a good) engenders; "exchange value ultimately [[succeeds]] in controlling use." Its creates a kind of infinity loop where highly "useful" commodities thus mean higher "exchange values" and the "usefulness" of an object is based the "exchange" it took to "create it".

Vaneigem confronts the issue of "quantity" and "Exchange" on a broader scaled in The Revolution of Everyday Life

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The calculation of a man's capacity to produce or to makes others produce, to consume or to make others consume, concretises to a T that expression so dear to our philosophers: the measure of man...With the rate at which economic 'imperatives' are buying up feelings, desires and needs, and falsifying them, people will soon be left with nothing but the memory of having once been alive. Living in the past; the memories of days gone by will be our consolation for living on. How could spontaneous laughter let alone real joy, survive in a space-time that is measurable and constantly measured? At best, the dull contentment of the man-who's-got-his-money's-worth, and who exists by that standard. Only objects can be measured, which is why exchange always reifies.

zarathustra
Posts: 197 Joined: 08-12-07
11 May, 2008 - 20:09
Quote:
You're arguing, I presume. that the exchange value of the pneumatic drill should be higher than ice cream, presumably because its "use value" is also higher, though you don't explain why this is.

No, the disutility to the manufacturer of pneumatic drills is greater than that of ice-cream even tho we like ice-cream more!

Anarcho "Raise the Black Flag!"
Posts: 333 Joined: 22-10-06
12 May, 2008 - 08:42

Kevin does make an interesting point:

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And of course, once the principle of planning is substituted for that of the market, there is no way to avoid such ossification.

Yet the problem with the market is that it produces a "race to the bottom" system, where people work longer and harder simply to survive on it... Which may produce tendencies to autocracy in even self-managed firms subject to market forces.

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The answer is to minimize reliance on organization itself as much as possible.

The need is for maximising horizontal links between firms -- I think that notions of "planning" are taken for granted too much. I don't remember any notion of "planning" in Kropotkin, for example. It seems to have been raised in syndicalist circles more than any, probably in response to the rise of Leninism and the apparent "success" of Stalinist planning.

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Part of the problem in Spain was the existence of federal and regional bodies superior to the individual factories. The factory management, although elected by workers, came to identify with the federal bodies rather than the workers to whom they were nominally responsible.

Kevin makes no attempt to link the examples of management authoritarianism to federalism. He simply assumes that the corruption of self-management is directly related to federalism. Conversely, it could be that calls against "laziness" were the product of needs to meet market demand, for example. Unless there is some analysis made between autocrocratic behaviour and federal organisation, Kevin's position may be considered unproven.

Quote:
Had there been no federal bodies, in which they could meet with their counterparts from other factories to commiserate on the atavism and laziness of "their" workers, the sole source of pressure on them would have come from below--from the workers who could recall them at will.

And, of course, the workers' could stil do that in the federal system. And it should be remembered that a constant refrain of the CNT was precisely that the collectives were a half-way house, imposed by the incomplete nature of the revolution. Levin goes so far as to call them "neo-capitalist" (which is incorrect, mutualist would be more accurate). Some of the "federalism" was imposed by the Republican state, via the collectivisation degree. How the economy would have evolved without this is a moot point, as is the notion that all the autocratic distortions were due to the existance to "federal" organisations.

Equally, war situations tend to produce ripe-rhetoric. After all, when you are facing Fascism you tend to be a bit pissed off if some people think its a good time to take it easy...

Still, Kevin makes a valid point. Some anarchists tend to be simplistic about creating and running a communist economy. Talking about "planning" does not cut it, particularly as capitalist firms plan as well. The question is how do we organise an economy to ensure the efficient use and communication of information and to ensure that individual and social priorities are identified and met.

The problem with the market is that it hides more information than it displays. Contra the "Austrians", the price of a good does not tell you whether it is actually an efficient use of resources or whether market power is at work or whether the low price is due to externalities and pushing costs onto workers, the environment, customers and so on. Equally, the collective results of lots of individual decisions can be irrational, forcing people to make decisions which are not in their self-interest. The "Austrians" forget all this, plus the awkward fact that their critique of "socialist" planning is just as application to the hierarchies within the capitalist workplace and wider economy.

I think we need to get away from Marx and Engels simplistic comments on plans, national or other wise, and look at the need for horizontal links between self-managed (and so self-planned) workplaces and communities.