So i just i read the "Communism in wonderland" chapter in the book and here's some highlights
Top-down planning stifled initiative throughout the system. Stagnation was evident in the failure of the Soviet industrial establishment to apply the innovations of the scientific-technological revolution of the 1970s and 1980s, including the use of computer technology. Though the Soviets produced many of the world's best mathematicians, physicists, and other scientists, little of their work found actual application
or more specifically:
- Managers were little inclined to pursue technological paths that might lead to their own obsolescence. Many of them were not competent in the new technologies and should have been replaced.
- Managers received no rewards for taking risks. They maintained their positions regardless of whether innovative technology was developed, as was true of their superiors and central planners.
- Supplies needed for technological change were not readily available. Since inputs were fixed by the plan and all materials and labor were fully committed, it was difficult to divert resources to innovative production. In addition, experimentation increased the risks of failing to meet one's quotas.
- There was no incentive to produce better machines for other enterprises since that brought no rewards to one's own firm. Quite the contrary, under the pressure to get quantitative results, managers often cut corners on quality.
- There was a scarcity of replacement parts both for industrial production and for durable-use consumer goods. Because top planners set such artificially low prices for spare parts, it was seldom costefficient for factories to produce them.
- Because producers did not pay real-value prices for raw materials, fuel, and other things, enterprises often used them inefficiently.
- Productive capacity was under-utilized. Problems of distribution led to excessive unused inventory. Because of irregular shipments, there was a tendency to hoard more than could be put into production, further adding to shortages.
- Improvements in production would lead only to an increase in one's production quota. In effect, well-run factories were punished with greater work loads. Poor performing ones were rewarded with lower quotas and state subsidies.
Particularly 1,4 and 8. I'm interested in available solutions cause tbh nothing comes to my mind and the book wasn't about that.
I suggest reading Paul Cockshott's book Towards a New Socialism where he talks about how to solve these problems in a planned economy.
Basically the problems in the USSR(and even today's Cuba and NK) arise because of the following reasons :
Prices are not calculated based on labor content(i.e the law of value) but there are many political factors that go into the setting of prices. You can see this in something called cheap food populism, where the prices of food are kept below their labor content in order to make it cheap, but it only results in shortages as people have more money to buy food than they would have if prices reflected labor content.
Lack of accurate price calculation also makes it difficult to consistently implement policies. For example, regarding innovation, those enterprises that innovate (i.e implement new labor-saving tech) can be temporarily subsidized, like they were under Stalin.
Firms shouldn't be run like capitalist firms like they were in the USSR, i.e there shouldn't be any profit motive and incentive. In the early stage of socialism, the incentive should be the wages of the workers themselves i.e, workers are paid according to the socially necessary labor time they contribute to society, and instead of money, it is much better to use labor-tokens instead . Labor-tokens can be used to buy stuff, but once they are exchanged they are destroyed, so it not a circulatory object, i.e it is not money. This will prevent the resurgence of capitalist relations like black markets etc. This was the problem with USSR, they used money(rubles) and they engaged in commodity-production i.e the reason for production was for selling for money, rather than for consumption. Eliminating commodity production requires the abolition of money, profit, interest, rent etc.
Profit is simply that part of the SNLT that is not used up for paying wages, replacing the used-up capital etc. When you eliminate the profit motive, it must be replaced by something else, and that is the conscious planning. However, planning requires objective metrics to determine its efficiency and rationality, this is why it's so important to calculate prices according to the law of value.
Innovation can be encouraged by subsidizing labor-saving technology, by setting planning targets using metrics like labor-productivity and quality instead of just bulk revenue targets.
I recommend watching these videos, they explain what I'm saying in a clear manner -
Why USSR collapsed - https://www.youtube.com/watch?v=EE-kCZnlGZU
What a modern communist society could look like - https://www.youtube.com/watch?v=ZgkWnODtS6g and https://www.youtube.com/watch?v=cI01-5zhwdA
:maduro-salute: to a fellow Cockshott poster. I was going to recommend him but you have a great summary here.
Thanks for the recommendation! All these sound interesting but number 3 in particular sounds confusing and scary? Was this system ever tried before? It sounds impossible to implement without paperless money, which is meh to me as someone living in a barely industrialised third world country.
Say my co-op sells dresses to other workers, how exactly does this exchange go? I receive their labour-tokens then destroy it? But I also receive labour tokens for making the dress from the state? Am I understanding it right?
I'll be watching the videos as soon as have WiFi. Thanks a lot for the suggestions!
It hasn't been implemented before. It doesn't necessarily require paperless tokens, they can simply be pieces of paper like 10 labour-hour notes or 100 labour-hours etc.
Now this is all hypothetical, since actual socialist countries used money instead of labour tokens. But it would work quite similar to what you're describing.