Cockshott&Cottrell’s planning techniques a moot point

Towards a new socialism by W. Paul Cockshott and Allin Cottrell (Spokesman Books, 1993) is an intriguing book. The model of socialism the authors espouse assumes from the outset that the main means of production are owned in common. C & C then address the problem of how the socialist economy will be planned. They advocate using direct measurement of labour time. Workers will be paid according to the time they have put in and the amount of work required to carry out tasks will be used as the basis for the plan. Their model is mathematically sophisticated.

C & C advocate using input-output models. They deal with the objection raised by Alec Nove in The economics of feasible socialism that there were 12 million different commodities in the Soviet Union at the time he wrote his book (1983). Nove argued that if all these commodities are interconnected in an input-output model of the economy it would be quite impossible to plan the interconnections between them all. Nove, ?quoted the estimate of one O. Antonov that to draw up a complete and balanced plan for the Ukraine would take the labour of the whole world?s population over a 10 million year period.?

Not true, say C & C. The authors invoke complexity theory and Gaussian elimination, a set of rules to solve systems of linear equations to deal with the problem. If we can reduce the calculations to an algorithm, then the planning process can be done in next to no time by computer.

C & C are of course aware that not only direct labour applied to the task but indirect labour used in making the tools etc. necessary to carry out the work must be incorporated in the plan; but they suggest that direct labour inputs can be used as a first approximation. Here?s how it works.

The idea here is that as a first approximation we ignore all inputs to the production process apart from directly expended labour. This gives us a first, approximate estimate of each product?s labour value… To arrive at our second approximation we add in the non-labour inputs valued on the basis of the labour values computed in the first phase… An answer correct to four significant decimal digits (which is better than the market can achieve) would require about 15 iterations round our approximation process.

They also remark in passing that, ?The input-output table for an economy is in practice mostly blanks. In reality each product has on average only a few tens or at most hundreds of inputs to its production rather than a million.? This means that planning in that amount of detail is not really necessary in a socialist society. The decision to co-ordinate millions of production decisions in a system of ?taut planning? proved impossible in the Stalinist economies, mainly because of the lack of workers? democracy.

This continuous adjustment would be solved by ?perpetual relative overproduction?, according to Marx in Capital Volume II. In other words in most sectors the solution would be to hold a small amount of stocks of finished goods to deal with contingencies. This is what happens under capitalism in any case. No doubt there is a link between hot dog production and the demand for bobble hats. This link is and should be unimportant to the Central Planning Authority.

C & C?s approach must be differentiated from some nineteenth century English socialists and Proudhon criticised by Marx, and their contemporary successors like Dieterich, who see the issue of labour notes as a way of bypassing ?the money swindle?. In this view equal quantities of labour exchange for equal quantities of labour and exploitation can be eliminated without social revolution.

To see the fallacy of Dieterich?s approach, let us look at the case of Lets (Local Exchange Trading Systems). Lets are the contemporary equivalent of labour notes, in this case records held on PCs. The founders of the system did not intend to revolutionise society, but merely for neighbours to mutually exchange skills and time outside the market. The concept was invented in Canada and the founders believed that one hour of labour of one type should be worth one hour of labour of any other type.

In fact computer experts who are exchanging time with others with different skills, for instance babysitting, know that their time is worth more since their skill is scarce. They consult the local paper, check up the relative pay scales and charge the difference in hours. In other words Lets mimic the market rather than subverting it.

This was the critique Marx made of Proudhon and the other ?time-chitters?. They saw the determination of value by labour time as an egalitarian principle. In fact this is the foundation of capitalist society. Exploitation is not just a money trick and cannot be done away with by cutting out the middle person. The deviation of price from value is not a fault, but an inevitable consequence of the way exchange value is determined in an anarchic society.

Marx?s criticism does not apply to Robert Owen?s labour notes. Marx points out in Capital Volume I that ?Owen?s ?labour money, for instance, is no more ?money? than a theatre ticket is.? Owen presupposes directly socialised labour.? In C & C?s book the revolution has already taken place and is organised according to their plan. Producers receive labour notes and exchange them for goods measured in labour time.

Unfortunately, since writing the book, C & C have reverted to a position like that of Dieterich:

  1. We do not place the nationalisation of industry at the center of our concerns; instead we emphasise a positive assertion of the rights of labour to the full value added.

  2. We propose a radical restructuring of monetary policy to move the whole economy towards a non-money ?equivalence economy? based on working time.? (‘Transition to 21st century socialism in the European Union’)

Why is determination of labour time important for a socialist society?

On the basis of communal production, the determination of time remains, of course, essential. The less time the society requires to produce wheat, cattle etc., the more time it wins for other production, material or mental. Just as in the case of an individual, the multiplicity of its development, its enjoyment and its activity depends on economisation of time. Economy of time, to this all economy ultimately reduces itself. (‘Grundrisse’)

First society, like an individual, has to allot its time purposefully. Secondly the expenditure of time may be a measure of what the individual receives back. This is a remnant of what the Critique of the Gotha programme calls ?bourgeois right.? In Capital Volume I Marx says, ?We shall assume, but only for the sake of a parallel with the production of commodities, that the share of each individual producer in the means of subsistence is determined by labour time.?

The experience of post-capitalist societies shows that this second use of labour time calculation is redundant. ?Economy of time? in the first sense will remain vital. The book is a trenchant rebuttal of the ?impossibility? of socialist planning. It shows we can use labour time calculation, but whether we need to apply C & C?s planning techniques in the way they suggest is a moot point.

Mick Brooks


2 thoughts on “Cockshott&Cottrell’s planning techniques a moot point”

  1. The point about not necessarily advocating nationalisation now, is twofold. Tactically is based on an assesment that it is likely that one could gather a wider basis of electoral support by demanding an immediate end to exploitaton and the payment to workers of the full value created by their labour, than one could by demanding nationalisation. But secondly nationalisation does not remove the relationship of wage labour, it just involves a change in the employer to be the state, whereas the right of the producers to the full value they create, abolishes the specific capitalist relation of exploitation.

  2. Our proposal to enshrine in law the right of workers collectively within a company to have the full value of their labour is a transitional demand. Its winning establishes what amounts to a cooperative form of socialism. In this commodity prices are denominated in labour but would individually deviate from the actual labour content prior to the establishment of systematic planning. Economies can not transform from capitalism to full socialism overnight, it has to occur through a sequence of transitional stages. It is not a reversion to Proudhonism, but an attempt to spell out the concrete transitional measures needed to establish socialist economy.


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