Louis Proyect: The Unrepentant Marxist

June 27, 2012

Crooked Timber’s neo-Austrians

Filed under: conservatism,economics,Red Plenty — louisproyect @ 6:18 pm

Ludwig von Mises

I had a very strong sense of déjà vu reading the posts and the comments during the Red Plenty seminar at Crooked Timber, a liberal group blog resting comfortably on Keynesian/Fabian principles as if they were overstuffed cushions. They brought me back to objections I heard to a planned economy on the original Marxism list and on PEN-L in the early to mid-90s, when market socialism and its kissing cousin analytical Marxism were all the rage.

Striking a repentant pose, Ken MacLeod, science fiction novelist and erstwhile fan of Frank Furedi’s brand of socialism, commented:

In the 1970s I thought that central planning combined with democratic control along the lines argued for by (e.g.) Ernest Mandel was possible and desirable. Towards the end of the decade I stumbled upon the economic calculation argument, as briefly stated by David Ramsay Steele in a readable pamphlet. I didn’t understand it fully but I kept worrying at the problem it posed. In the 1980s I read Geoffrey Hodgson’s The Democratic Economy, and Nove’s The Economics of Feasible Socialism, which made some socialist sense of the same argument. More recently I’ve been interested in the more radical market socialism proposed by David Schweickart.

While it is hard to figure out where he is coming from politically, seminar participant Cosma Shalizi, a statistics professor at Carnegie-Mellon, says more or less the same thing:

We are pushed back, inevitably, to the planners having to make choices which express preferences or (in a different sense of the word) values. Or, said another way, there are values or preferences — what Nove called “planners’ preferences” — implicit in any choice of objective function. This raises both a cognitive or computational problem, and at least two different political problems.

The cognitive or computational problem is that of simply coming up with relative preferences or weights over all the goods in the economy, indexed by space and time. (Remember we need such indexing to handle transport and sequencing.) Any one human planner would simply have to make up most of these, or generate them according to some arbitrary rule. To do otherwise is simply beyond the bounds of humanity. A group of planners might do better, but it would still be an immense amount of work, with knotty problems of how to divide the labor of assigning values, and a large measure of arbitrariness.

Despite the sympathies that the seminar participants have for a nice polite liberalism, the intellectual roots of what Shalizi calls a “cognitive or computational problem” can be found in the writings of Ludwig von Mises, a luminary of the Austrian school of economics that begat Ayn Rand, Milton Friedman, Alan Greenspan and a host of others considered anathema in these circles and whose ideas about deregulation and free markets have led to immense suffering in Greece, Spain, and most of the third world.

In the pamphlet by David Ramsay Steele referred to by Ken MacLeod, von Mises is singled out as having figured something out that eluded socialists:

Of the trio which unleashed the economic calculation argument, Weber, Brutzkus and Mises, the outstanding figure was undoubtedly Mises. His statement was published first, it was soon incorporated into a comprehensive critique of socialism in all its aspects, Die Gemeinwirtschaft (Socialism: An Economic and Sociological Analysis), it quickly reached a wide audience of socialists and was so stinging and provocative that it could not be ignored.

Steele recapitulates the arguments found in the 1920 “Economic Calculation in the Socialist Commonwealth” that can be downloaded from the Ludwig von Mises institute website. This is a classic work for rightwing economics professors everywhere, the people that Michael Perelman labeled a “mafia” in a Nation Magazine article by Christopher Hayes on the degraded economics profession.

Antoaneta Dimitrova, another liberal professor who took part in the Red Plenty seminar, had this advice for the Greek victims of neoliberal-inspired economic collapse:

It may be anathema to Greece to let go of some national sovereignty as Eastern Europeans did when negotiating with the EU and submitting themselves to the guidance of the European Commission and sometimes also the IMF in their reform efforts. But, undemocratic and asymmetric as this external guidance has been, procedurally speaking, it has, on balance, proved good for democracy and governance in Eastern Europe.

Well, what does it matter if IMF reforms are undemocratic so long as if everything works out at the end of the day–to use a cable TV news show cliché? After all, the ends justify the means, don’t they? You gotta break some eggs to make an omelet, after all.

That’s something that old von Mises himself understood when he became an economic adviser to Engelbert Dollfuss, the fascist dictator in Austria. Here’s the self-described liberal economist in his 1927 “Liberalism: A Socio-Economic Exposition:

It cannot be denied that Fascism and similar movements aiming at the establishment of dictatorships are full of the best intentions and that their intervention has, for the moment, saved European civilization. The merit that Fascism has thereby won for itself will live on eternally in history.

The deeds of the Fascists and of other parties corresponding to them were emotional reflex actions evoked by indignation at the deeds of the Bolsheviks and Communists. As soon as the first flush of anger had passed, their policy took a more moderate course and will probably become even more so with the passage of time.

That sort of rings a bell, doesn’t it? When the Chicago boys, the ideological heirs of Ludwig von Mises, went down to Chile, they might have felt a momentary twinge of embarrassment about all the people being tortured, but in the long run it was for the good for the Chilean people to be saved from central planning. As Henry Kissinger once put it, “I don’t see why we need to stand by and watch a country go communist due to the irresponsibility of its people. The issues are much too important for the Chilean voters to be left to decide for themselves.”

Many years ago I—like my friend Doug Henwood—was a libertarian and took all the bullshit I read in National Review seriously. Well, half-seriously anyhow. Back in 1960, when JFK was a candidate, I decided to join the Young Americans for Freedom with my rich cousin Louis (who had material incentives to believe in this nonsense) in order to spite my high school classmates. As someone who was very “unpopular” back then, I decided to find other reasons for people to hate me besides being un-athletic and short. I embraced conservatism for the same reason that Charles Bukowski told his classmates in a Los Angeles high school before WWII that he liked Hitler—just to rile them up.

To refresh my memory of what the Austrian school was about, I read (very possibly reread) “Economic Calculation in the Socialist Commonwealth” by von Mises. Most of it consists of warnings about attempting to organize an economy other than on the basis of “economic calculation”, in other words money.

One may anticipate the nature of the future socialist society. There will be hundreds and thousands of factories in operation. Very few of these will be producing wares ready for use; in the majority of cases what will be manufactured will be unfinished goods and production goods. All these concerns will be interrelated. Every good will go through a whole series of stages before it is ready for use. In the ceaseless toil and moil of this process, however, the administration will be without any means of testing their bearings. It will never be able to determine whether a given good has not been kept for a superfluous length of time in the necessary processes of production, or whether work and material have not been wasted in its completion.

Von Mises was a member in good standing of the Austrian school of economics whose founder Carl Menger came up with the idea of marginal utility. The basic idea goes something like this. A consumer good like a hot dog might bring maximum enjoyment on the first eating, but subsequent dishes might provide a diminishing return—unless of course you compete professionally like Takeru Kobayashi who ate 69 Nathan’s hot dogs in ten minutes on July 4, 2011, setting a new Guinness world’s record. When I read about marginal utility, I can’t help but think of the stump speech that Peter Camejo used to give in the early 70s. Under socialism, there would be so much abundance that food would be virtually free. So if somebody walked out of a grocery store with a bunch of apple pies, the reaction would be to call mental health professionals rather than the cops.

Philip Wicksteed, a British preacher and disciple of the Austrians, tried to explain the theory this way:

We may now go on to the next great step in advance in our analysis of the scale of preferences or relative estimates. We have noted incidentally more than once that the question may arise not only, for example, whether to buy any new potatoes at all, but also how many to buy. Suppose the usual consumption of potatoes in a family is about 4 lbs. a day (2 stone a week), and sound old potatoes are about ½d. the lb. If new potatoes are 2d. the housewife may determine to buy 2 lbs. that week, for a treat, reckoning that they will go once round on Sunday, the second dish to be of old potatoes as usual, or if that takes too much trouble the second dish to be dispensed with. If they are 1½d. a lb. she may buy 4 lbs. and have all new potatoes on Sunday, or one dish on Sunday and one on some other day in the week; or she may buy enough for the birthday dinner of one of the children. But when new potatoes come down to a penny she will buy no more old potatoes at all.

What all this has to do with the rejection of socialism might not be obvious at first blush. Somebody trying to decide whether to buy potatoes or not would not, for example, explain the famine in the Ukraine of the early 30s, would it?

Von Mises took the marginal utility theory and applied it to money. Thorsten Polleit, an economist working for a precious metals firm, has a piece on the von Mises website titled What Can the Law of Diminishing Marginal Utility Teach Us?  that concludes with this profound lesson:

Violations of individual property rights (for instance through government taxation, regulations, etc.) will make property owners value present goods increasingly more highly than future goods — a conclusion which follows from the law of diminishing marginal utility.

Violations of individual property rights thus raise peoples’ time preference, increasing consumption at the expense of savings and investment, thereby reducing (or even reverting) the pace of capital accumulation. An interventionist-socialist societal order will therefore necessarily lead to impoverishment relative to a free market societal order, in which there are no systematic violations of individuals’ property rights.

The one thing you will note throughout the Austrian school literature, as well as its offspring from Chicago to business schools everywhere, is its emphasis on the individual. As Margaret Thatcher, one of their most fervent supporters put it in a 1987 interview: “And, you know, there is no such thing as society. There are individual men and women, and there are families.”

If you want to shift the focus away from social classes, this comes in very handy. Instead of trying to explain why millions of people don’t have the money to buy food and need to rely on food stamps, you create artificial scenarios where an abstract human being is contending with abstract baskets of goods. This is fundamentally how bourgeois economics is taught. In good times, it might pass muster but during a depression it prompts a Charles Ferguson to make an Academy award winning documentary that exposes people like Columbia’s Glenn Hubbard for the con artist that he is.

In doing some research on this article, I was happy to see that Nikolai Bukharin, my favorite Bolshevik next to Leon Trotsky, wrote a book that took the Austrians on. Titled “Economic Theory of the Leisure Class”  and written in the same year as von Mises’s dreadful “Economic Calculation in the Socialist Commonwealth”, it puts the focus on social classes rather than the individual.

Bukharin described the Austrian school in sociological terms as expressing the class outlook of the rentier, a representative of the dominant financial bourgeoisie that “is not capable of looking forward.” Bukharin describes their philosophy as “Enjoy the moment,” a characterization that would still apply to the hedge fund operators of today with their $30 million dollar penthouses and fleets of Ferraris.

The industrial bourgeoisie was consumed with the need to produce but this parasitical class was much more focused on consumption, hence the preoccupation of the marginal utility theorists with their potatoes, etc. Bukharin elaborates:

This crass individualism is likewise neatly paralleled in the “subjectivist-psychological” method of the new tendency. To be sure, the theorists of the bourgeoisie had assumed an individualistic attitude even in earlier periods; they always enjoy making references to Robinson Crusoe. Even the representatives of the “labour value theories” based their position on individualistic references: their labour value was not, as one might perhaps expect, the social objective law of prices, but the subjective evaluation of the “economic subject” (the economic man) who evaluates the commodity variously, depending on whether the expenditure of labour has been connected with greater or less inconveniences (for example, Adam Smith).

The brunt of Bukharin’s critique is directed against Eugen Böhm-Bawerk, whose rejection of Marx’s value theory was also based on marginal utility theory. Just as Crooked Timber became a hotbed of von Mises’s calculation thesis around the novel “Red Plenty”, so it became the sounding board of attacks on value theory based implicitly on Böhm-Bawerk. In a series of articles laying siege to Karl Marx, communism, and revolution, one of the blog owners—an Australian economist named John Quiggin who has more awards than Heineken beer–came close to being sued for plagiarism by the Böhm-Bawerk estate:

For those engaged in attempts to achieve a better, more equal and more sustainable society, Marx’s theory of value has little to offer. What can it tell us, for example, about the relative merits of trying to promote equality through higher minimum wages, through more progressive taxation or through expansion of public ownership? But, in the Communist Manifesto and elsewhere Marx had a lot to say about capital and capitalism that was, and remains, both interesting and insightful.

Considering the fact that Quiggin’s article was titled “Marxism without revolution: Capital“, it is hard to figure out why he felt the need to characterize Marx as “interesting and insightful”. As Karl Marx might have put it when his Jewish roots were acting up, “Favors like this who needs?”

Invoking the good Nikolai Bukharin, one might feel the need to look at Crooked Timber sociologically. How is that 100 years after the Austrian school was in its heyday, the professors on this high-profile blog are attempting to use the same arguments and for the same purpose: to put the final nail in Marx’s coffin.

There was an Austrian social scientist (a Hungarian citizen of the Austro-Hungarian Empire actually) who was von Mises and Böhm-Bawerk’s contemporary but drew much different conclusions about the capitalist system. His name was Karl Polanyi and his best-known work was “The Great Transformation”, a broadside against markets and those who serve as its apologists.

In June 1989, Monthly Review magazine published an article by Kari Polanyi Levitt, his daughter and only child, and Marguerite Mendell titled “The Origins of Market Fetishism”. It is worth quoting at some length:

In the setting of intellectual Vienna of the 1920s, Mises and Hayek and their associates were the misfits–the remnants of old Vienna’s privileged urban elites whose security had been shattered, whose savings had been decimated by wartime and postwar inflation, and whose taxes were financing the pioneering housing programs of Vienna’s socialist municipal administration. In their parlors and favorite coffee houses the patrician middle classes, now deprived of their prewar privileges, fed their fears of “the dictatorship of the proletariat.” They were particularly terrified by the 1926 Linz Program of the Social Democratic Party which resolved to defend Austria’s democratic constitution–by armed struggle if necessary–against threats by the Christian Socials to crush the working class and its organizations. They made common cause with the rising forces of clerical reaction which eventually led to the suspension of Parliament in 1933 and the violent destruction of the working-class movement in February 1934, leaving the country defenseless against Hitler’s occupation in 1938. The heirs of the Liberal tradition of the 1860s joined forces with clerical fascism in their paranoiac fear of the working classes.

A special target of Hayek’s polemics in the 1920s was the regime of rent control and public housing, which effectively eliminated private high-rental residential construction. (Hayek: 1929) Working-class families were now privileged in access to low-rental, bright, spacious, modern apartments with parks, kindergartens, and other communal facilities. These programs, together with a sweeping educational reform based on Alfred Adler’s theories of psychology, plus the large-scale participation of the working people of Vienna in a remarkable variety of cultural, recreational, and educational activities organized by the Socialists made “Red Vienna” a world-class showpiece of avant-garde urban lifestyle.

The elite of the intellectuals of Vienna were socialist sympathizers. In Vienna alone 350,000 people belonged to Social Democratic organizations, while socialist trade unions comprised 700,000 workers. “Never before or since,” wrote Ernst Fischer, “has a Social Democratic Party been so powerful, so intelligent, or so attractive as was the Austrian party of the mid 1920s.” (Fisher: 143) According to another contemporary, the “piecemeal reforms were to be the first building blocks of a future socialist society.” (Zeisel: 123)

“The ultimate justification of socialism derived from our expectation that it would usher in a new man, a new morality…. The essence of being a socialist is the holding of certain ethical positions about justice and about duties to our fellow man.” (Zeisel 123, 131) As we shall see, it is precisely the fundamental conflict of values which underlies the contending visions of democratic socialism and individualistic libertarianism.

For those who have been keeping track of current events, this does not sound that much different from the planet earth in the last 3 years or so, with its Arab Spring, its Greek protests against austerity both in the streets and in the ballot boxes, as well as the Occupy Movement in the USA which lives on despite its eviction from public spaces.

Our goal, of course, is to build once again a massive socialist movement that will not only give these neo-Austrians the fright of their lives but wipe a decadent system off the face of the earth.

 

April 22, 2012

Red Plenty

Filed under: computers,Red Plenty,Stalinism,ussr — louisproyect @ 8:15 pm

The NY Times was not content to give Francis Spufford’s mixture of fact and fiction about the USSR (faction—really) “Red Plenty” one rave review. At least two were necessary. On February 14th this year, Dwight Garner wrote this valentine:

Any reader with a pencil has a dozen ways to express negative sentiment in the margins of a book — I am partial to ick, ack, awk, ugh and the occasional wha? — but a writer’s great sentences, in their bid for posterity, mostly just get underlined. At the end of the first chapter of Francis Spufford’s “Red Plenty,” however, I printed a nerdy but heartfelt word: “Bravo.” I felt like giving the author a little bow, or maybe a one-man standing O.

For what it is worth, Garner also went head over heels for Saïd Sayrafiezadeh’s “When Skateboards Will Be Free”, a callow memoir about growing up an SWP red diaper baby. I guess that even if there was no longer a single Marxist alive anywhere in the world, reviewers will still be singing the praises of such books. That is to be expected when the contradictions of capitalism create the objective conditions for a renewed interest in Marxism, as is the case today.

On March 2nd, Andrew Meier was just as effusive, concluding his review thusly:

Yes, “Red Plenty” is a literary/historical seesaw, a work sure to have even the most bilious Kindle-haters tapping for hyperlinks. But it is a work, by turns learned and lyrical, that grows by degree, accreting into something lasting: a replica in miniature of a world of ideas never visible to most, and now gone.

Neither Garner nor Meier are typical hardened anti-Communists. In fact, their political outlook is not that much different from that of Spufford, a liberal I have described as preferring the “devil you know” to the socialism some unrepentant types still uphold.

One thing is made abundantly clear from the introduction to Part Five of “Red Plenty”, the USSR was rotten from the beginning:

But the Soviet experiment had run into exactly the difficulty that Plato’s admirers encountered, back in the fifth century BC, when they attempted to mould philosophical monarchies for Syracuse and Macedonia. The recipe called for rule by heavily-armed virtue—or in the Leninist case, not exactly virtue, but a sort of intentionally post-ethical counterpart to it, self-righteously brutal. Wisdom was to be set where it could be ruthless. Once such a system existed, though, the qualities required to rise in it had much more to do with ruthlessness than wisdom. Lenin’s core of Bolsheviks, and the socialists like Trotsky who joined them, were many of them highly educated people, literate in multiple European languages, learned in the scholastic traditions of Marxism; and they preserved these attributes even as they murdered and lied and tortured and terrorized. They were social scientists who thought principle required them to behave like gangsters.

In other words, Lenin led to Stalin. This is the same formula that is at the heart of all Sovietology, whether of the liberal variety like Robert Tucker or the reactionary Robert Service. Spufford grudgingly admits that the USSR was proceeding along a viable path in the 1920s under the NEP, but concludes that Stalin’s war on the peasantry was practically necessary: “the farmers’ incomes made them dangerously independent, and food prices bounced disconcertingly up and down. Collectivisation saw to all these problems at once.”

One suspects that Spufford views the NEP as an outlier. For him, the main course of Soviet history is a blend of top-down economic planning and the police state. Even more disconcertingly, this historical narrative would appear to be in consonance with Marx’s writings rather than an assault on them.

The dead giveaway is the reference to Plato in the citation above. When Heinrich Blucher (Mr. Hannah Arendt) was indoctrinating me as an undergraduate at Bard College in the early 60s, he insisted that totalitarianism was the logical outcome of a German philosophical idealism rooted in Plato’s philosophy. The Soviet dictatorship was nothing else but the embodiment of the philosopher king. This obsession with ideology ran very deep in the 50s and early 60s. To some extent, it was a reflection of the existentialism of the day (Blucher and Arendt were part of Heidegger’s circle in the 1920s) but also Anglo-American sociology typified by Daniel Bell’s “End of Ideology”. Now that I am older and wiser (go ahead and laugh), I understand that American pragmatism–the official ideology of the ruling class–never received the same kind of critical scrutiny. After all, as Marx pointed out, the ideas of the ruling class are in every epoch the ruling ideas. Why should America be any different?

Although book reviewers are beside themselves with Spufford’s literary skills, I find them just as dubious as his political analysis. The brunt of this review will be about the latter, but a few words about style are necessary.

I counted 56 characters in “Red Plenty”—some fictional like Khrushchev and others made up like Galina, a college student who is a kind of hard-core Communist. Unlike a novel, there is little attempt to connect them. They pop up in one part and only reappear a decade or so later. It is almost as if Spufford had written a thousand page novel and about half of it got lost on the way to the printer. Not just the first half or the second half, but random pages perhaps strewn by the wind. In many ways, they remind me of the “interludes” in John Dos Passos’s “USA”, his brief profiles of people like Henry Ford, etc. But “Red Plenty” is all interludes with no connective plot tissue. This is certainly “novel” in the sense of being new, but no competition to the traditional novel of ideas that such a subject (the crisis of Soviet planning) deserves.

The other major problem is the rather clumsy attempt by Spufford to achieve verisimilitude by throwing in all sorts of reminders that this is happening in a very backward Russia and nowhere else. You can turn to practically any page and read something like this:

But the smell of vodka merged with the sweaty sourness of the workers a little further forward, whose factory had plainly lodged them in a barracks without a bathroom, and the fierce rosewater scent the short woman had on, into one, hot, composite human smell, just as all the corners and pieces of sleeve and collar he could see fused into one tight kaleidoscope of darned hand-me-downs, and worn leather, and too-big khaki.

Aaah! I can hear the Song of the Volga Boatmen in the background now.

From the very top of the hierarchy to the very bottom, Spufford’s characters are marked by a Quixotic belief that their system works, even if they disagree on how to make it work better. Unlike some of the classic anti-totalitarian literature of the 20th century, there is no Winston Smith to put forward a contrary analysis even though there is an implication throughout that a Grand Illusion is at work.

At its core, “Red Plenty” is a rehashing of issues that I first ran into nearly 20 years ago when “market socialism” was all the rage among certain elements of the left. On PEN-L, the Progressive Economists Network listserv, you had both Marxists and liberals similar to Spufford arguing that planning was futile. Some were even ready to agree with the Austrian school that markets were necessary for the proper allocation of resources.

There was always an assumption that planning existed in the USSR. Even with computers, planning was doomed to fail—a central thesis of “Red Plenty”. But how warranted was that assumption? While I admit to having only a skimpy knowledge of planning in the USSR in the 50s and 60s, I have to wonder how much it differed from what went on when its rulers were up-and-coming bureaucrats.

The Soviet government announced the first five-year plan in 1928. Stalin loyalists, like Krzhizanovksy and Strumlin, who headed Gosplan, the minister of planning, worried about the excess rigidity of this plan. They noted that the success of the plan was based on 4 factors: 1) five good consecutive crops, 2) more external trade and help than in 1928, 3) a “sharp improvement” in overall economic indicators, and 4) a smaller ration than before of military expenditures in the state’s total expenditures.

How could anybody predict five consecutive good crops in the USSR? The plan assumed the most optimistic conditions and nobody had a contingency plan to allow for failure of any of the necessary conditions.

Bazarov, another Stalin loyalist in Gosplan, pointed to another area of risk: the lack of political cadres. He warned the Gosplan presidium in 1929, “If you plan simultaneously a series of undertakings on such a gigantic scale without knowing in advance the organizational forms, without having cadres and without knowing what they should be taught, then you get a chaos guaranteed in advance; difficulties will arise which will not only slow down the execution of the five-year plan, which will take seven if not ten years to achieve, but results even worse may occur; here such a blatantly squandering of means could happen which would discredit the whole idea of industrialization.”

Strumlin admitted that the planners preferred to “stand for higher tempos rather than sit in prison for lower ones.” Strumlin and Krzhizanovksy had been expressing doubts about the plan for some time and Stalin removed these acolytes from Gosplan in 1930.

In order for the planners, who were operating under terrible political pressure, to make sense of the plan, they had to play all kinds of games. They had to falsify productivity and yield goals in order to allow the input and output portions of the plan to balance. V.V. Kuibyshev, another high-level planner and one of Stalin’s protégés, confessed in a letter to his wife how he had finessed the industrial plan he had developing. “Here is what worried me yesterday and today; I am unable to tie up the balance, and as I cannot go for contracting the capital outlays–contracting the tempo–there will be no other way but to take upon myself an almost unmanageable task in the realm of lowering costs.”

Eventually Kuibyshev swallowed any doubts he may have had and began cooking the books in such a way as to make the five-year plan, risky as it was, totally unrealizable.

Real life proved how senseless the plan was. Kuibyshev had recklessly predicted that costs would go down, meanwhile they went up: although the plan allocated 22 billion rubles for industry, transportation and building, the Soviets spent 41.6 billion. The money in circulation, which planners limited to a growth of only 1.25 billion rubles, consequently grew to 5.7 billion in 1933.

As madcap and as utopian as the original plan was, Stalin tossed it into the garbage can immediately after the planners submitted it to him. He commanded new goals in 1929-30 that disregarded any economic criteria. For example, instead of a goal of producing 10 million tons of pig iron in 1933, the Soviets now targeted 17 million. All this scientific “planning” was taking place when a bloody war against the Kulaks was turning the Russian countryside into chaos. Molotov declared that to talk about a 5-year plan during this period was “nonsense.”

Stalin told Gosplan to forget about coming up with a new plan that made sense. The main driving force now was speed. The slogan “tempos decide everything” became policy. The overwhelming majority of Gosplan, hand-picked by Stalin, viewed the new policy with shock. Molotov said this was too bad, and cleaned house in the old Gosplan with “all of its old-fashioned planners” as he delicately put it.

Now the USSR was clearly a different place in 1960 than it was in 1930. But it was subject to the same distortions as it was earlier. Politics trumped science. No matter how cogent the strategies put forward by software engineers, they were likely to be superseded by the feudal-like social relations that existed under Stalinism, with a King at the top—the General Secretary of the CP—and all the fiefdoms underneath him run by factory managers. Socialism is not just about planning. It is about workers control. Without thoroughgoing democracy that is fed by initiatives by those who produce the wealth of society, it is very difficult to use scientific methods to create “plenty”. The implied message of “Red Plenty” is that since democratic socialism is impossible, you might as well live with market relations and all the shit that goes along with it, well on display in his own country and the rest of Europe today.

In the 1980s I was president of the board of Tecnica, a kind of radical Peace Corps that sent programmers and engineers to Nicaragua to volunteer their skills. While Nicaragua was not socialist, it was committed to planning on a large scale. Our organization reported to Carl Oquist who was Daniel Ortega’s chief economics adviser. But no matter how many volunteers we sent, including some very capable people from Bell Labs and other blue-chip American firms, and no matter how many Nicaraguans we trained in the use of spreadsheets and database management systems, it could never compensate for a contra war that was draining the country economically.

Missing from “Red Plenty” is any engagement with the costs of war on economic development in the USSR. Spufford has no use for Stalin but does not explain how the Soviet people ended up with him. A contra war that ensued after the Bolsheviks took power resulted in the deaths of many of the most democratically minded and politically educated worker cadres who made the revolution. A political vacuum and the country’s inherited backwardness made it all the more easy for a despot like Stalin to take power and build a “socialism” that had much more in common with the primitive accumulation stage of capitalism than the Marxist beliefs of those who were shot down by American and British rifles in 1919.

In an interview with the Browser, Spufford is asked whether he agrees with the thesis of Yuri Slezkine’s “The Jewish Century”, namely that “in the 1920s and 30s the Soviet Union was a brilliantly successful state for Jews.”

While admitting that some aspects of the book are “undeniable”, he repeats the catechism of the professional anti-Communist:

But communism is a bit embarrassing now. It is getting hard to get people to own up to the fact that once upon a time they thought it was sensible. It was part of the centre of gravity of the 20th century. What I agree with about it is that it brings an aspect of the 20th century into view. One of the hardest things for us to remember about Stalinism is that as well as being a system of horrors it also represented modernity and social mobility and opportunity for lots of people. In a horribly straightforward way the great purges opened up an incredible number of jobs, as we saw with Khrushchev, who is a fine example of Russia being a land of opportunity built on numerous graves.

In generational terms, I belong to the 60s—a time when many young people still believed that the Soviet Union was “progressive” but only in the most dialectical sense. Born in 1964 and nearly 20 years my junior, Spufford comes of age at a time when Francis Fukuyama’s “end of history” and Austrian economics were becoming hegemonic.

Those born 20 years after Spufford are now in their late twenties and unlikely to be convinced that history is at an end or that markets and “plenty” go together. These are the young people with crappy jobs if they are lucky and/or with huge college debts. They are also the kinds of people in the vanguard of the Occupy movement and the democratic revolutions sweeping the Middle East.

No matter how many books get written about the evils of 20th century communism, I doubt that this will matter to them. They want a society that is based on economic justice and peace. Whatever name you call it, this is what they seek no matter how many glowing reviews that “Red Plenty” garners in the New York Times. As has been the case since Marx and Engels were the same age, capitalism creates socialism through its own contradictions. As long as there is capitalism, there will be a movement for socialism. It is our job in the 21st century to rebuild a movement that is the only hope for the future, starting now.

April 9, 2012

British liberals versus Karl Marx; Marx wins by a TKO

Filed under: economics,liberalism,Red Plenty,ussr — louisproyect @ 6:12 pm

Francis Spufford

John Lanchester

The heavyweight champ

For someone deemed so obsolete and irrelevant, Karl Marx has a way of getting under the skin of liberal intellectuals 193 years after his birth. For example, John Lanchester—a British novelist and nonfiction writer born in 1962—spends 6016 words (!) trying to drive a stake through the heart of Marx’s ideas in an essay titled Marx at 193 that appears in the left-leaning London Review of Books:

The most obvious mistake in his version of the world is to do with class. There is something like a classic Marxian proletariat dispersed through the world. But Marx foresaw that this proletariat would be an increasingly centralised and organised force: indeed, this was one of the reasons it would prove so dangerous to capitalism. By creating the conditions in which labour would be sure to organise and assemble collectively capitalism was arranging its own downfall. But there is no organised global conflict between the classes; there is no organised global proletariat.

About a month before this article appeared, Crooked Timber—a group blog hosted by liberal academics also obsessed with burying Karl Marx—advised its readers that Francis Spufford’s new mixture of fact and fiction (faction in more senses than one) titled “Red Plenty” is “a mosaic novel that simultaneously speaks intelligently to the Soviet calculation debate, and has engaging characters.” Like Lanchester, two years his senior, Spufford writes both novels and nonfiction and is British. Since both Lanchester and Spufford were too young to be part of the sixties radicalization when socialist revolution had more of a palpable reality than it does today, one suspects that there might be a generational thing going on. Or Oedipal, if you are into Freud.

Oddly enough, the disappearance of the Soviet Union and the general decline of a revolutionary movement are not enough to assuage them. Could it be possible that if there was only a single human being committed to socialism living on the planet Earth at some point in the distant future, outlets like the London Review of Books and Crooked Timber would still be writing broadsides against this “irrelevant” movement? What the liberal intelligentsia fails to understand is that Marxism will exist as long as there is capitalism. Capitalism generates its negative critique—Marxism—through the creation of class antagonisms born out of the brutal reality this unnatural social system generates. If Karl Marx had never been born, someone else would have come along to develop an analysis of the capitalist system and a program to eliminate it. That’s the dialectic the liberals cannot understand.

I am currently about 40 percent through with “Red Plenty” and will be posting a critique but in the meantime I want to direct you to the introduction of Part Three where Francis Spufford dispenses with his fictional examination of Soviet characters involved with attempts to modernize the economy through automation and lays out “what went wrong” with the USSR. I have scanned the introduction, which can be read here: http://www.marxmail.org/Red_Plenty_Intro.htm. I want to single out a couple of sections to give you a feel for his approach:

Spufford’s take on Lenin comes out of the Cold War Sovietology playbook:

With almost no industrial workers to represent, the Bolshevik (‘majority) faction of the Russian Social Democratic Party was a tiny, freakish cult, under the thumb of a charismatic minor aristocrat, V.I. Lenin, who had developed a doctrine of the party’s, and by extension his own, infallibility. The Bolsheviks had no chance of influencing events, and certainly no chance at getting anywhere near political power, until the First World War turned Russian society upside down. In the chaos and economic collapse following the overthrow of the Tsar by disorganised liberals, they were able to use the discipline of the cult’s membership to mount a coup d’etat — and then to finesse themselves into the leadership of all those in Russia who were resisting the armed return of the old regime. Suddenly, a small collection of fanatics and opportunists found themselves [sic, should be itself, since "a small collection" is singular, not plural] running the country that least resembled Marx’s description of a place ready for socialist revolution.

Robert Service could not have put it better.

After several decades of Stalin’s forced march, the USSR began to catch up to the industrialized West, so much so that it became possible to consider a stepped-up investment in consumer goods. The term ‘Red Plenty’ alludes to the hopes of its various Soviet characters that they would have just as much as the Americans et al. Spufford writes:

Yet somehow this economy had to grow, and go on growing, without a pause. It wasn’t just a question of overtaking the Americans. There were still people in the Soviet Union, at the beginning of the 1960s, who believed in Marx’s original idyll: and one of them was the First Secretary of the Party, Nikita Sergeyevich Khrushchev. Somehow, the economy had to carry the citizens of the Bolshevik corporation all the way up the steepening slope of growth to the point where the growing blended into indistinguishable plenty, where the work of capitalism and its surrogate were done at last, where history resumed its rightful course; where the hunting started, and the fishing, and the criticising after dinner, and the technology of abundance would purr in the background like a contented cat.

For Spufford, the USSR of the 1950s and 60s is kind of a funhouse mirror of the United States of the same period—in other words a country aspiring to look like the hit television show “Mad Men”. Socialism becomes more or less equated with a hankering for more, rather than for freedom. Since Spufford is a man of the left, it is not surprising that he is appalled by consumerism, whichever ideology fosters it. He told the Guardian in August 2010:

Our version isn’t costless either. The steel and concrete required to sustain it are created for us elsewhere, out of sight, leaving us free to stroll around our pastel pavilion, on the side of which glimmers the word “Tesco”. Inside are piled, just as Khrushchev hoped, riches to humble the kings of antiquity. But terms and conditions apply.

While I will be on the lookout for any clues that Spufford has entertained the possibility that 21st century socialism will proceed on utterly different foundations than what Henry Miller once called the Air-Conditioned Nightmare, the prognosis seems guarded. The general impression I get from what I have read so far, both in “Red Plenty” and his musings elsewhere, is that of a jaded intellectual who believes that it is better to deal with the devil you know—an understandable stance if you are a college professor in London instead of a Greek pensioner.

Turning now to John Lanchester’s essay, you can at least be grateful to him for providing so many examples of how not to read Marx. It is a kind of clinical study in liberal confusion, mixed with deliberate misrepresentation, starting with the nonsense about the disappearance of the working class as a “centralized” and “organized” force. Perhaps the only thing worth stating at this point is if nobody ever wrote a single word from a Marxist standpoint after Marx’s death, Lanchester’s comments would be valid. However, Marxism continued after Marx’s death—surprise, surprise. While Lanchester refers to David Harvey in his essay (see below), he does not seem to have grasped his key theoretical contribution, namely the ability of capital to decentralize the working class through geographical displacement of its internal contradictions. With respect to it being “organized”, we can only say that this is not Marx’s responsibility—it is ours.

His essay tries for the umpteenth time to refute some of the basic precepts of Capital, especially Marx’s concept of value:

There are obvious difficulties with Marx’s arguments. One of them is that so many of the contemporary world’s goods and commodities are now virtual (in the digital-oriented sense) that it’s not easy to see where the accumulated labour in them is. David Harvey’s lectures on Capital, for instance, the best beginning for anyone studying Marx’s most important book, are of immense value but they’re also available for free on the internet, so if you buy them as a book – you can take in information much more quickly by reading than by listening – the surplus value you’re adding to is mainly your own.

Huh?

There is so much confusion packed into this brief paragraph that it would take a week to draw out and dissect it. To put it briefly (and this is all it deserves), the books, music and videos available for free on the Internet were either created originally through the process of surplus value creation (just ask the NY Times reporter if his work was originally “for free”) or by schnooks like me who want to win friends and influence people on a pro bono basis. If the writers, artists, and film-makers whose stuff gets circulated on Huffington Post never got paid, there never would have been anything to look at (except of course for the bloggers who got conned into writing for free.) How this invalidates Marx’s theory of value is anybody’s guess.

Lanchester also believes that when you carry your own bags at the airport for free, you are proving Marx wrong:

Online check-in is a process which should genuinely increase the efficiency of the airport experience, thereby costing you less time: time you can spend doing other things, some of them economically useful to you. But what the airlines do is employ so few people to supervise the bag drop-off that there’s no time-saving at all for the customer. When you look, you see that because airlines have to employ more people to supervise the non-online-checked-in customers – otherwise the planes wouldn’t leave on time – the non-checked-in queues move far more quickly.

The same thing is true for the CVS pharmacy across the street from me that replaced most of its sales clerks with scanning machines. I ring up my scanned goods and pack them myself. But this is not what CVS is about. Mostly it is about commodities stocked on the shelves that are the products of alienated labor. For example, the paper products Vanity Fair, Angel Soft, and Northern Quilted are all made by Georgia-Pacific, part of Koch Industries. In December 2010, the workers at Georgia-Pacific in Portland, Oregon rallied against their bosses’ greed:

On the cold afternoon of December 4th, fourth generation Georgia- Pacific (G-P) employee Travis McKinney raised his voice above the frigid wind as he stood with close to one hundred of his co-workers, union allies and community supporters in front of the office at the company’s largest distribution center for paper products in Portland, Oregon.

He described to an outraged crowd, management’s cold-blooded refusal to allow him to tend to his daughter’s health: “When I had to take my daughter to the hospital to be diagnosed, the company told me I had to stay and work overtime instead.” Travis was eventually able to get medical help for his daughter – despite G-P’s lack of support – and found that she was autistic.

Doug Stilwell, another G-P employee, spoke at the rally about management’s constant pressure to speed up forklift operations. “There is no safety… ever since they put this computer system in here [to automatically direct workers when to move loads], we’re all taking shortcuts trying to get this stuff down, pushing their paper out. It’s wrong,” said Stilwell.

This is the underlying reality of CVS or American Airlines, another labor-bashing outfit, not me scanning my toilet paper or doing online check-in’s of my suitcases.

Lanchester’s trump card is just as what one might have expected: the welfare state. The fact that we are no longer working 12 hours a day and one step away from the poorhouse makes Marx obsolete:

The contemporary welfare state – housing and educating and feeding and providing healthcare for its citizens, from birth to death – is a development which challenges the basis of Marx’s analysis of what capitalism is: I think he would have looked hard at the welfare state and wondered whether it fundamentally undermined his analysis, just because it is so different from the capitalism Marx saw operating in his day, and from which he extrapolated. Perhaps he would argue that what has happened is that British society in its entirety has become part of a global bourgeoisie, and the proletariat is now in other countries; that’s a possible argument, but not one that’s easy to sustain in the face of the inequalities which exist and are growing in our society. But Scandinavian welfare capitalism is very different from the state-controlled capitalism of China, which is in turn almost wholly different from the free-market, sauve-qui-peut capitalism of the United States, which is again different from the nationalistic and heavily socialised capitalism of France, which again is not at all like the curious hybrid we have in the UK, in which our governments are wholly devoted to the free market and yet we have areas of welfare and provision they haven’t dared address.

How odd to see someone pointing to the welfare states of Europe nowadays when all of them are on a forced march to resemble the United States, with Greece a prime example of the fate that befalls them all—Germany and the Scandinavian countries to follow suit. All of them are under pressure to compete in a global market that is putting immense pressure on the more prosperous countries to drive down the wages of their workers so as to compete with the less prosperous.

It should be understood, however, that the existence of these welfare states is predicated not on the tendency of the bourgeoisie to operate against its own class interests. Historically, they came into being only because they were seen as a way to preempt proletarian revolution. In some ways, German’s Bismarck paved the way for FDR, the Scandinavian and British welfare states and all the rest.

Under Bismarck, the following pieces of legislation were enacted:

  • Health Insurance Bill of 1883
  • Accident Insurance Bill of 1884
  • Old Age and Disability Insurance Bill of 1889

He sponsored such legislation only because the German socialists were building a counter-force to German capitalism that had the potential to eliminate it. Even when he was pushing through welfare-state legislation well ahead of his time, Bismarck made sure to enact anti-socialist laws that resulted in the closing of 45 newspapers.

FDR was not that different. Widely recognized for fighting against the capitalists in order to preserve their own system, he made sure that the only threat to the status quo—the Trotskyists—ended up in prison at the beginning of WWII.

Whatever nostalgia you confront in “Red Plenty” for a fat and happy consumerist America of the 1950s or in Lanchester’s welfare state disappearing before your eyes like a Cheshire cat, the reality we confront is much more like Marx’s 1860s than either liberal is willing to accept. That is their problem, not ours.

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