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Sunday, 8 April 2012

Can a planned economy work by producing for peoples needs?

We are often asked as socialists well how would your socialism work? Well for a start it wouldn’t be ours it would be everyone’s everyone would have a true stake in society at long last.
Capitalism has created enormous wealth, science and technique. We have technology today that was unimaginable a generation ago.
The world economy is 17 times the size it was a century ago. Yet we are being told that the most basic public services - a decent public health service, the right to an affordable home - cannot be afforded by capitalism.
The current crisis is not caused by a bloated public sector but by the worst crisis of capitalism in 70 years. This is a crisis of the private not the public sector.
Yet all the major capitalist parties - Tories, Lib Dem and New Labour agree that it should be the working class and public services that pay for it.

It is clear to me and many others that there is the wealth in society to pay for all that we need. It is a lie that there is no money left and something we must and I mean must smash as there is huge amounts of money out there if it wasn’t so concentrated among a select rich few.

Capitalism has always been a system based on the exploitation of the majority, the working class, for the profits of a few at the top.
There was a brief period, from around 1950-73, when capitalism developed rapidly. At least in the more economically developed countries, including Britain, working-class people were able to win a few crumbs from the capitalists' table.
In Britain, a National Health Service and a mass council house building programme made a real improvement in workers' lives.
However, when capitalism went into crisis, it set about restoring its profits by driving down the share of the wealth taken by the working class. Production was moved abroad to countries with cheaper labour, wages were driven down, and spending on public services was cut back.

During the last boom profits reached an all-time record. However, they had difficulty finding profitable fields to invest in.
Investment in science, technique and production remained at an historic low. Why? Because working-class people lacked the means to buy the goods that could potentially be produced.
This is the terrible reality of capitalism. It does not matter that two billion people are without the most basic necessities of life; they are not 'a market' because they lack the money to buy what is produced.
Instead of investing in industry, the capitalist class made its profits in the last boom by gambling on the world's stock markets in a speculative frenzy. To try and increase their markets the working class got its own little share in the credit frenzy: cheap credit cards and mortgages - not crumbs but bubbles from the table.

How does Socialism create and maintain jobs and keep the economy functioning effectively and growing?
The first thing that would happen under socialism is that unemployment would be eliminated overnight. Even in 2000, during a boom period, the UK had 2 million people unemployed. The cost of this is estimated at £5,000 per family per year in terms of lost production and benefit claims. Under socialism everyone would be guaranteed a job by reducing the working week without loss of pay. The reason this doesn’t happen under capitalism (or at least neo-liberal capitalism) is because getting fewer people to do more work is a fantastic way to make profit! However, as Tony Benn said, if full employment can be used to fight Hitler why can’t it be used to feed people? Jobs would be created for the benefit of society as a whole, not for the bank balances of the rich.
As for allowing the economy to grow; even in a bureaucratically deformed workers’ state with no democracy such the USSR and other planned economies they had production levels that were for decades on a par and often better than in the West. This phenomenon would be magnified in a true socialist society with the active engagement of the population and the ‘oxygen’ of workers’ democracy.
Besides, as we’ve all seen recently, capitalism by no means guarantees economic growth indefinitely. What is happening at the present time is precisely what Karl Marx analysed years before, a classic case of over-production. Products such as cars were produced for people to buy but we could no long afford to buy back the things we had produced. And who suffers as a result of this system? Not the capitalists who caused this crisis but the ordinary workers who one day were in a job (so long as it made profit for the bosses) and the next on the scrapheap! This anarchy and unjust ‘employment strategy’ would be consigned to the dustbin of history.
How does it invest in research and development, and find new alternatives for industry, for example switching from dirty fuel such as coal to clean and renewable energy such as wind or hydroelectric power?
How does it create innovation and entrepreneurs, and inspire young people to work hard and achieve?

Under capitalism, the majority of people (i.e. the working class) are coerced to work, we literally have no choice but to otherwise we starve! We are compelled by the logic of capitalism to sell our labour and, as such, capitalism calls the shots, not the people who produce the wealth in society. Under socialism, people would of course be expected to work, but for very different reasons. Instead, workers would be encouraged to work for the benefit of society and not just reasons for of survival. Despite the arguments of conservatives, socialists believe that humanity is basically good but is shaped by the society it lives in. Therefore, I believe that people that believe in a society that works for them, and is, ultimately, run by them will make sure it works. As a socialist society is run by the working class it is in our interests to make sure it works. Every effort will be made to make people’s lives easier and it stands to reason that innovation will still be needed under socialism. A society can never be too efficient.
Again, under capitalism, innovation and entrepreneurship reflect class interests and is therefore only utilised to make profit and not for the overall good of society. The technology exists for everyone to drive around in environmentally-friendly cars but capitalism will not allow this to happen on a mass scale because it will cut into its profits. Production would be based on human need not personal greed.

As always the capitalists will fight back to maintain their profits and their system at the heart of all this.
That is why a crucial step towards solving the economic crisis would be to take the big corporations that dominate Britain's economy into democratic public ownership.
This would allow for production to be planned for need and not for profit. Even some of the representatives of capitalism have inadvertently recognised that this is the only way to solve the crisis.
Alan Greenspan, head of the US federal reserve during the boom years - once treated as a god by capitalism and how reviled as being responsible for the crisis - recently excused his role in the crisis by saying: "Unless there is a societal choice to abandon dynamic markets and leverage for some sort of central planning, I fear that preventing bubbles will in the end turn out to be unfeasible. Assuaging their aftermath seems to be the best we can hope for."
Democratically planned economy
In the coming years, on the basis of their experience of capitalism, millions of workers will draw the same conclusion as Greenspan. 'Central planning' in Britain - in the sense of a democratically planned economy - would mean that building workers, for example, could be put to work building and refurbishing high quality, environmentally friendly affordable social housing for the five million people who want it.
Huge resources could be put into the development of environmentally friendly technologies. The working week could be cut, without loss of pay.
This measure, combined with an expansion of public services, could quickly eliminate unemployment. All of these and much more would be possible on the basis of a democratic socialist plan of production.
Of course, capitalism is an international system, and any alternative could not stop at the shores of Britain. However, if a democratically elected socialist government in any country was to begin to implement the kind of programme outlined here it would act as an enormous inspiration to workers in the rest of the world struggling against capitalism's devastation of their living standards.
The ideas of genuine democratic socialism would spread like wildfire.

With extracts taken from Portsmouth socialist party s excellent blog and the socialist party’s website at

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