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International Socialist Review, Spring 1966




From International Socialist Review, Vol.27 No.2, Spring 1966, pp.34, 86.
Transcribed & marked up by Einde O’Callaghan for ETOL.


(The following letter is in response to Soviet Management Reform, by Ernest Germain, in the Summer 1965
International Socialist Review.)

* * *

To the Editor:

Mr. Germain might be well advised to make explicit the knowledge or interpretation of modern economic-planning theory that permits him to reject “supply and demand laws” as useful tools of analysis and rational economic determinants, even under socialism. Otherwise, his repudiation becomes cavalier, and his analysis of socialist economics becomes somewhat deficient in technical analysis. It is therefore one-sided.

It is of course true that Soviet workers and peasants have been arbitrarily and often ruthlessly ruled by a State and party bureaucracy. That bureaucracy has aggrandized itself materialistically, though it has not re-created the legal basis for its own unlimited private accumulation of wealth. Nor has the drive to industrial and technical maturity been diverted to luxury goods. Moreover, fantastic wage differentials are being permitted to narrow, and the lowest brackets are especially benefitting from wage raises. The frenzied drive to expand steel, coal and other domestic heavy industry, at the expense of the vast “non-priority” consumer goods sectors, has been attenuated. The increasingly self-confident Soviet citizens have repudiated the forced marches imposed by an inner party clique, and the centralized command economy is beginning to yield to diffusive pressures.

It could not be otherwise. An increasingly complex and interdependent industrial economy would falter at the obstacles imposed by inept “material balancing,” crude output targeting, and constrictively detailed resource allocation.

One waits for Mr. Germain to advance beyond vague “motherhood slogans” (workers self-management, true proletarian democracy, etc.), and as an economist, actually grapple with the tremendous technical problems facing socialist economics. Obviously full democracy, and popular control facilitate inquiry and experimentation, just as they attack vested interests and accumulated bureaucratic privilege. Obviously, too, these benefits will not come to the Soviet people without an intense struggle against a bloated ruling party with enormous economic and political power. But are these obvious truisms sufficient tools for a thorough analysis of the Soviet economy? Specifically, does Mr. Germain not see that he could use much of modern “abstract” economic theory as a tool to rationally calculate social and private costs and benefits, and to which he could attach goals of egalitarianism and rapid growth. His contention that some vague “principle of planning” stands above all of this simply opens the floodgates to all kinds of quackery and ill-considered material and human sacrifice.

Furthermore, Mr. Germain’s general denegration of citizens’ short and long run tastes as (at least) a powerful and fundamental determinant of resource and product allocation, leaves me wondering what party, what central committee, or what political executive he envisages substituting for the people’s desires. Perhaps Mr. Germain only meant to say that a socialist central authority would try to integrate and harmonize as many firm, industry and sector activities into a binding comprehensive plan as modern computers and programming techniques permit. Here “workers’ control” would involve less local choice of productive techniques and output mix, and more group experimentation, personnel allocation, and search for non-wasteful techniques to feed to the data processors and decision makers.

Or perhaps Mr. Germain meant that co-existing with wider workers’ control, plus large freedom for the firm in product and resource markets, there should be general programming of sectoral and aggregate investments to avoid sharp imbalances and depression.

But if he meant to say these things, Mr. Germain should have: (a) said them; (b) avoided implicit and careless equating of those useful “supply and demand” theorems of modern economists (predominately Western) with the vicissitudes of the capitalist economies in which they often happen to live.

May I once more apologize for the brevity (and obscurity) of this hurried comment. I have not bothered to praise the many competent points in Mr. Germain’s analysis, or the general revolutionary political conclusions. Instead I have briefly attacked those Marxist economic orthodoxies I think most harmful to a humane, efficient, and expanding international socialism.

With very best wishes for your future work,

Fraternally yours,
John McCormack

November 23, 1965

Reply by E. Germain

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