Re: [a-list] [marxmail] Was the Soviet Union an idea ahead of its time ? (Boston Globe)

Would not have been ahead of its time if there had been a socialist revolution in Germany or France or maybe Italy . On Mar 31, 2021, at 4:18 PM, Jim Farmelant wrote:  I pretty much agree with Nestor concerning the genesis of Soviet-style central planning. During the power struggle that broke out after Lenin's death, it was Trotsky who was calling for ending the NEP, while Bukharin called for its continuation, with Stalin supporting Bukharin's position. Then when Stalin won out in the power struggle, he dropped his pro-NEP position, arguing that the defense needs of the Soviet Union required a very rapid industrialization which could only be facilitated by central planning. In other words, he called for a return to the War Communism that had existed in the civil war period but on an even more massive scale.This central planning, with all of its defects and deformities, was largely successful in attaining the goals that Stalin had set. The Soviet Union did succeed in rapid industrialization, albeit at tremendous costs, both in human terms and to the environment. But this industrialization did make it possible for the Soviet Union to win the Second World War and to become a global superpower after that war. This kind of central planning was good at providing the Soviet Union with lots of new hydroelectric plants and with beefing up the country's military establishment. It was much less successful in providing ordinary people with consumer goods. Khrushchev attempted to alleviate that situation with various reforms but those reforms were not terribly successful. Following the ouster of Khrushchev some more reforms were attempted under Kosygin (i.e. the Lieberman Reforms) in 1965, but those reforms had disappointing results too. More reform attempts were made in 1973 and later in 1979, but the results were less than impressive. The Soviet economy which had enjoyed rapid growth from the end of the Second World War through the 1960's into the 1970's, fell into stagnation. Years later, when Mikhail Gorbachev took over, he attempted more radical reforms with his glasnost and perestroika. Those reforms too failed and whole Soviet system unraveled. Jim Farmelant http://independent.academia.edu/JimFarmelant http://www.foxymath.com Learn or Review Basic Math ---------- Original Message ---------- From: Néstor Gorojovsky (via a-list Mailing List) To: a-list@lists.riseup.net Subject: Re: [a-list] [marxmail] Was the Soviet Union an idea ahead of its time? (Boston Globe) Date: Wed, 31 Mar 2021 13:30:05 -0300 I believe the answers are political. Central planning was a necessity under conditions of civil war and foreign intervention, first. And it was also a necessity under the ensuing conditions of foreign blockade of a magnitude it is seldom forgotten. However, this was basically central planning of misery. It was an externally enforced "solution". In more senses than one it was essentially more the face of imperialist states (and of the lack of understanding, to put it mildly, of the proletariat in imperialist countries) than the true face of the new social formation in construction. The way out was blueprinted with the NEP. However, and for reasons I would not discuss here, NEP was destroyed by what I cannot but define as a mock "central planning" which took the basic elements of the old one, but progressively threw aside every revolutionary élan in its concrete working and, in so doing, also its potentially mesmerizing power in the proletariat of imperialist countries. Domestic necessities took the Soviet high bureaucracy to substitute what was initially no more than a white lie ("socialism in a single country") for what would have been truthful recognition of the facts and limits of the country under such an environment. The white lie thus became a White lie: no proletarian in the imperialist countries would choose that kind of socialism for her or himself, thus reinforcing the isolation and somewhat dooming the whole great enterprise. By the turn of the 1930s the whole thing was already on its rails, running towards all that happened later (including the 1989/90 outcome). An erratic and cruel foreign policy reinforced the conviction in the imperialist proletarians, particularly in Western and Central Europe. And all this under permanent pressure from imperialist nations. Had the Soviet leadership stuck to the NEP in a different way, and had it also kept an actual, not a "kinda", internationalist conception (which "socialism in a single country" could only sap, as it did), the jump to the abyss may have been a leap into Heavens. Well, this is all that I believe can be said on the issue in a short mail message. I would also add that the People's Republic of China was very lucky after 1949. The sacrifice of the Soviet Union was, from a historical point of view, definitely NOT meaningless. China was NEVER a victim to the isolation that the Soviet leadership had to cope with. They also understood, through their own peripecies (which were feasible only BECAUSE the Soviet Union existed and kept fighting for her existence for decade after bloody decade), the necessity of a NEP. This, the NEP, is the domestic concrete result of the ugly fact that socialist revolutions at the core of the system were smothered blue by the extra surplus value provided by semicolonies and colonies the globe over. No, the Soviet Union was NOT an idea ahead of its time. The proletarians in the imperialist countries were a fact behind its time. It is not technical issues that impose their bias. Had the proletariat in imperialist countries (at least in some, the main ones) taken the path to revolution, then we would have had a conscious technical effort to create "technologies for matching supply and demand" decades earlier. AND we may also have "technologies for harnessing the forces of capital, particularly of financial capital, to human necessities and a rationally defined growth of global labor productivity". At least, this is the way I see the whole tragedy from Argentina. El mié, 31 mar 2021 a las 10:29, John Vertegaal () escribió: Without a theoretical and comprehensive answer to the question of the manifest source of "all profits, all returns to capital" in monetary terms, 'the' most crucial issue to clear up not only in political economy but in economics too, Fafchamps' article is just about as significant as blowing smoke into a soap bubble. Marx "solved" this query which for him was a real dilemma ("It will not do to obviate this difficulty by plausible subterfuges")*, by evoking either a hoard or an increase in successful gold mining as its only equilibrium possibility. Problems with that solution are multifold, like: its empirical impossibility; no steady increase in the price of gold has ever happened; we're long since off the gold standard; so either Marxists need to come up with a very different source in terms of fiat money, as a rule coming into existence as a to be resolved debt (M'=more debt?), which would mean the need for having a coherent theory of what money is; or I'm afraid they're all just blowing smoke too. It's another** indication, that Marx's notions of surplus value and returns to existing capital are fundamentally, and even fatally, flawed; and, that the concept of central planning is a solution in search of a problem. Some dream indeed... There's nothing that's inefficient about cost+ pricing, though the key to it all lies in first understanding what aggregatively determines that 'plus' , and act accordingly; not only with logic on one's side, but from the perspective of an economy's universal purpose. Out of which inquiry will roll: a Mondragon-style socialism, with its employee ownership, and a tax incentivized work-sharing to include all the able and willing; being all the world needs. It's most unlikely to get that though, without the old order imploding first; and the latter, with vested interests being powerful, could very well have consequences that are nasty for the overwhelming majority as long as the cause isn't clear-cut, and can be hidden by the powers-that-be at the time. Amazon's and Alibaba's algorithms as linearly-programmed solutions work; because ever increasing private-debt levels, as well as governments covering their own short-falls by borrowing, as far as pertaining to a hoarding of their incomes by Bezos and Ma; are considered to be externalities, lying outside their programmable scope of data. But the basic fact is that our economy functions neither linearly, as Marx and conventional economists take for granted, nor chaotically non-linear as is held by the other end of the theoretical spectrum, but instead does so in a reciprocally non-linear way, through an effective demand by all its personal-income extractors for final output; and that neither Amazon nor Alibaba ever got an order to fill for a certain Mr. Capital. Market pricing is the only solution to that underlying fact, combined with steeply progressive taxation rates affecting both the likes of Bezos and Ma, and the economy's aggregate net-savers (i.e. solely the 1 to 5-percenters)***; so as to effect a dynamic equilibrium and unencumbered continued economy. An economy wherein every activity is accounted for****, cannot be analyzed as being at some given point in time; when, as following its first principle, it is always only in an overlapping state of becoming to be. And the converse of this is: that everything that appears to be, is indeterminate in time and in economic value. No analytical point of departure, for planning purposes or whatever, is construable from such entities. For in the absence of imperative returns, regardless of all its embedded labor, all pertinent capital is valueless; and there'd be no economy to analyze. Algebra and differential equations are thus useless for analyzing anything economic; indeed, just about as much so, as these math subjects are to cost accountants. The difference being that accountants are fully aware that overlapping periods, for one, prevents analytically correct snapshots in time, yet they thrive in their profession; while the economists' academe is in a deep crisis, as there is nothing in their output from math inputs, they can point to as having made a difference to the well-being of society. The answer ought to be obvious: first of all get out of the slow lane, going nowhere from static first principles, like C+V+S and Y=C+I; they're myths, unable to reflect a dynamic reality. The assumption that a dynamic economy is an extremely difficult to analyze refinement of a comparative-static one is false. Next, induce a set of dynamic and realistic first principles; these will be true until a contradiction appears. And with any luck one might get somewhere, rather sooner than later. Economics=macro-accounting≠cosmology. *)How can capitalists continue to extract £600 from an economy, when they only put £500 into it? (paraphrased) Marx, Capital II; Ch.17. Brilliant question, but dim answer. **)Approaching Marx's folly from a different direction – http://www.vcn.bc.ca/~vertegaa/Marx_Debunked.pdf ***)So much for MMT's concern of needing to accommodate all those who want to net save out of their income. The overwhelming majority of individuals thus inclined, is already well accommodated by the enormous number of net borrowers of to be resolved disbursed income. ****) This means a number of things. Such an economy stands, is maintained, and falls, by the status of its accounts. Its materiality, or its physical existence, is entirely irrelevant to those conditions; and so, following a collapse, the pieces are ready to be picked up after an overnight electronic adjustment of those accounts. A depression era is unnecessary. Marx picked a point of departure that became incoherent as soon as he realized accounting couldn't be dispensed with, for some of his logic. Capitalism isn't only amoral, it's illogical; Marx's grudging admiration for its accumulation prowess is totally misplaced. While we do make a living within an economy, we don't live within it; this in turn means that economic final output transcends its boundary upon sale, while re-materializing from non-material values-in-exchange into material use-values, within the same domain as natural resources have their reality. Within an economy, no use-values exist. The entire economy inherently is a means to an end only... For all these to be coherent, they must ultimately be deducible from its first principles. There are more, but these should give anyone enough of a sense, as to why their own search for reality isn't complete, nor coherently completable; unless: money≠unit-of-account. John V On 3/25/2021 11:52 AM, Jim Farmelant wrote: The dream of central economic planning died with the USSR. Thirty years later, technologies for matching supply and demand are a reality in America — as is the potential for surveillance Lenin and Stalin could only have dreamed of. By Marcel FafchampsUpdated March 24, 2021, 9:22 a.m. When the Soviet Union was created, beginning in 1917, its rulers wanted all profits, all returns to capital, to accrue to the state. This would not have been possible with decentralized markets, since the state could not know the profits made by individual entities, regardless of whether they were privately or publicly owned. This, they anticipated, would lead to underreporting of income and defeat the rulers’ objective. To circumvent this problem, they turned to scientific planning to replace the market with algorithms. Production units were asked to declare their plans and capacities. Retail chains were asked to project the demand for consumer goods. Government ministries were asked to stipulate their needs for investment in various kinds of infrastructure. These numbers were then put together in matrices, and a mathematical method known as linear programming was used to optimize the allocation of workers and productive capacity so as to achieve the objective of the plan at the lowest resource cost. While this system could more or less handle large planned investments in heavy industry — steel mills, coal mines, and the like — it was woefully insufficient at handling consumers’ demand for varied goods and services once the Soviet economy started to develop. The problem was that the rulers at the time had only simple mathematical algorithms and no computers. Running an entire complex economy via algorithm was simply not feasible. This probably explains why after several Eastern European countries fell into the orbit of the Soviet Union in the late 1940s, some of them did not even attempt to adopt its full-fledged central planning system and instead allowed a modicum of market exchange to remain. By the time the Soviet Union was disbanded in the early 1990s, its central planning system of exchange was judged a failure, and it was rapidly replaced with a decentralized market system. Spin the clock forward another 30 years, and we are now in a world where a large and increasing fraction of economic exchange is run, quite successfully, by algorithms. Amazon and Alibaba perform essentially the same tasks as the Soviet central planners: They collect information on items available for sale and, by doing so repeatedly over short time intervals, effectively track productive capacity. They collect day-to-day information on consumers’ requests for various goods and services, thereby tracking the evolution of demand over time. They match supply and demand in real time. And they organize the dispatch and delivery of these items to consumers across the globe. If the Soviet Union had had such tools at its disposal, it would no doubt have used it to run its economic exchange system. By observing all transactions and all payments, the rulers would also have observed all profits and incomes and thus been able to appropriate whatever they thought was due to the state. As a matter of fact, the United States and other Western countries have begun to use sophisticated algorithms for central planning purposes, with a view toward appropriating economic surplus. The best example is the auction sale of bands of the airwaves for mobile-phone and other communications services. Companies interested in buying communications licenses are asked to place bids on the airwave bands they want, and a computer allocates the licenses so as to both minimize the chances of airwave interference and maximize the government’s income from the licenses. Similar auctions have been used to allocate foreign exchange by central banks and the procurement of goods and services by government agencies. Matching algorithms are used to assign medical interns to hospitals, students to schools, and workers to jobs — and even to arrange meetings or marriages between people. Lenin could not have been more pleased. But such algorithms now do much more than simply matching individuals or firms based on their stated preferences: They also forecast demand. Artificial intelligence and big data make it possible to predict preferences at the individual level in real time, thereby enabling algorithms to facilitate trade by reducing consumers’ search costs. This is achieved by collecting vast amounts of individual data, often without anyone being aware of how revealing this data is about their political views, sexual orientation, health conditions, criminal activity, wealth, and income. Not even the East German Stasi or the Romanian Securitate could have dreamed that such information would be surrendered without resistance. So where do we stand? We are at a crossroads. The technology necessary to put in place a centrally planned police state is now a reality. Whether this technology is used for this purpose is but a matter of time. At the end of last year, Jack Ma, the creator of Alibaba, went missing for three months. We later learned that he had been chastised by the Chinese authorities for announcing an ambitious plan that would have strengthened Alibaba’s position in the economy. This warning shot only serves to remind us that algorithms of exchange can one day fall under direct or indirect government control. Alternatively, private interests could just as easily capitalize on this technology for huge private gain. The question then is: How can we protect civil liberties in the face of these enormous challenges while continuing to enjoy the benefits that all these algorithms generate? This is the biggest question facing us today. How we resolve it will determine how we — and our children — will live tomorrow. Marcel Fafchamps, an economist at Stanford University, is senior fellow at the Freeman Spogli Institute for International Studies. This article was updated on March 24 to clarify the reference to the Soviet Union’s creation. Jim Farmelant http://independent.academia.edu/JimFarmelant http://www.foxymath.com Learn or Review Basic Math ____________________________________________________________ Top News - Sponsored By Newser Biden Doubles Vaccination Goal at First Press Conference NFLer Was Walking in a Public Park. Then, Screams for Help Charlottesville Mayor Likens Her City to Rapist -- Néstor Gorojovsky ____________________________________________________________ Choose to be safer online. Opt-in to Cyber Safety with NortonLifeLock. Plans starting as low as $6.95 per month.* NetZero.com/NortonLifeLock --- To unsubscribe: List help: