Visionary Socialism: On the Anarchy of Capitalism and the Need for Social Planning

by Raymond Lotta

Revolutionary Worker #1071, September 24, 2000

The Revolutionary Communist Party, USA announced last year its plan for forging a new Programme—a Marxist-Leninist-Maoist Programme—for making and winning revolution in the United States.

The RCP is calling on people to help produce this new Programme. The Party wants to work with people to do research and investigation into the class structure and social fabric of the U.S. It wants to engage people in discussion, wrangling, and debate: about issues of analysis, about its vision of a new society and about its strategy for creating such a new society. The Party wants to hear people’s opinions and observations about the current (1981) Programme, and their suggestions for the new one.

To assist people in taking part in this project, the Revolutionary Worker is running a special reprint series which includes excerpts from the current Programme, from writings by the Chairman of the RCP, Bob Avakian, and from articles that have appeared in the Party press. The idea is to provide a background and grounding in certain Marxist-Leninist-Maoist principles, and in the Party’s developing analysis of society and the revolutionary process.

We continue the series this week with "On the Anarchy of Capitalism and the Need for Social Planning" by Raymond Lotta, which originally appeared in Revolution magazine, Spring 1992, as an appendix to the article "The Theory and Practice of Maoist Planning: In Defense of a Viable and Visionary Socialism."

Socialist economic planning, as it was practiced in revolutionary China, overcomes the situation in which blind economic forces rule people’s lives, and at the cost of immense human suffering. The following brief discussion is aimed at providing some theoretical background on the anarchy inherent in capitalism—why this is so and how it affects the basic functioning of this system.

Anarchy of social production is of the essence of capitalism, and only genuine socialism can overcome it. What this anarchy refers to is the fact that economic development under capitalism is not guided and shaped by any prior plan or social purpose. Society does not calculate in advance what is needed by whom and how best to meet those needs. Society does not figure out ahead of time what machinery and technology are required, and in what proportions, in order to keep the economy functioning properly. And capitalist society most definitely does not figure out what are the most pressing social concerns—whether it be housing in the inner city or research into AIDS—and then mobilize people and resources to meet those concerns.

These things do not and cannot happen under capitalism for two basic reasons. First, the many different labor processes that constitute the productive activity of society are privately organized. Productive activity is carried out by separate and competing capitals, each making its own production decisions. There are no direct social links between the agents of production—and thus production cannot be managed as a social whole. Second, the quest for profit dominates these privately organized labor processes. Profit determines what gets produced. This is why luxury condominiums get built while housing in the ghettos and barrios is allowed to decay.

Under capitalism the great bulk of products that society requires to maintain itself are produced as commodities. A commodity is a good produced not for direct use but for exchange, for sale on the market. What concerns the producer of commodities is not their useful functions but their exchange value, what can be gotten in exchange for them. Henry Ford put it quite well when he said that Ford was in the business of making money, not cars. In other words, most of what is produced in capitalist society is produced with no direct connection to social needs. These needs are met indirectly, as a byproduct of the pursuit of profit.

Capitalist production consists of many different capitals. Each exercises direct control and authority over its respective production processes and seeks to plan its activity and development. But there is no social authority coordinating the social process as a whole. Individual firms formulate investment, marketing, and research plans; coordinate production and internal purchases between different divisions; and seek direct control over raw materials. Modern capitalism requires a high degree of organization at the firm or enterprise level. But each decision-making unit is disconnected from other decision-making units. They may temporarily enter into agreements with one another. But, again, there is no social authority or central coordination for society’s economic processes taken together. Individual capitals do not know for whom and in what necessary quantity they are producing, or even if what they produce is really needed. Automobiles get manufactured, steel mills get built, new technologies are developed as capitalists battle each other for larger market shares. But whether these automobiles will actually get sold, whether the new steel capacity will actually get used, whether the new technology will find profitable application, this is only discovered after the fact—after the cars are manufactured, after the investments take place. In short, anarchy exists at the society level. And the partial, unsynchronized planning conducted by individual units of capital (banks, transnational corporations, etc.) ultimately intensifies the total disorder. Even when there is production for direct order, as when military contractors produce goods for the government, with exact quantity and quality specified in advance, the basic situation remains the same: there is no overall coordination of economic activity in society as a whole. Under conditions of modern capitalism, the capitalist state seeks to regulate certain aspects of social production in order to safeguard the interests of the national capital. But this takes place within the environment of commodity production and the competitive struggle for profit. Anarchy cannot be overcome; it reemerges at higher levels.

Built in to capitalist commodity production is a contradiction that has to be continually resolved. On the one hand, individual producers organize and carry on their activity independent of one another; on the other hand, they are mutually dependent on one another, they are part of a larger social division of labor. Individual capitalists in every major branch of production depend on other capitalists to supply them with raw materials, with energy, with machinery and equipment, with what it takes to carry on production. And they all expect their commodities, whether they are production goods or consumer goods, to be sold. How then does capitalist society’s economic activity get coordinated? How do the different pieces of production fit together?

The answer is that these privately organized labor processes are linked together and regulated by market exchange. In order for production (or consumption) to take place, needed products must be transferred from one capitalist to another (or sold to consumers). This takes place by means of exchange, which has its own laws. Commodities are bought and sold at prices that reflect the labor time socially necessary to produce them. (And labor power itself is a commodity that is bought and sold.) This law of exchangeability is one aspect of market regulation.

The market also forges individual labor processes into a social division of labor. It does this through the guiding hand of prices and profits. In response to the movement of prices and profits, capital moves into high-profit sectors and moves out of low-profit sectors. In response to the expand-or-die need to increase profit and capture a larger share of the market, capitals will raise efficiency, lower cost, and undersell competitors. Individual capitals are subject to the discipline of the market. If an investment does not produce a satisfactory profit, or if a particular commodity does not get sold at a price which can cover its cost, then capital is forced to raise its efficiency or to shift into another line of production. And so the market regulates and dictates reorganization: U.S. Steel closes inefficient steel mills and gets into real estate, the auto industry retools and cuts its labor force, companies go bankrupt or get swallowed up, workers are forced to change jobs. The movements of prices and profits provide the news and information upon which businesses base their production decisions and learn whether the labor process under their command is actually needed or is up to competitive standard. In this way, the social division of labor is forged and reforged.

But this is blind and anarchic regulation. It is a hit-and-miss, too-much-and-too-little, trial-and-error process of after-the-fact adjustment. In boom times, investment is expanded too much. New technologies wipe out older ones before their usefulness has been exhausted. In periods of economic slowdown, there is too little investment. Great numbers of people are condemned to unemployment while urgent social needs go unmet. The process of market regulation and adjustment is wasteful and destructive and causes tremendous human suffering. This is the outcome of a relentless competitive battle that forces capitals to expand, or run the risk of defeat and ruin. It is a competitive battle that requires individual capitals to maximize gains and minimize losses, regardless of the effects on the economy and society as a whole. It is a competitive battle that periodically erupts into economic crises. This anarchic system of production dominates the world. Its expand-or-die inner compulsion leads to international economic rivalry; its drive for profit results in savage exploitation and oppression of the people of the Third World; its politics of "great power" control and domination and its economics of global expansion give rise to the causes of war.

Under socialism, the situation of separate and private production decisions governing social production and social life is completely changed. Labor power is socially allocated according to a plan based on the needs of society. The products of labor and the means of production are distributed according to a plan based on the needs of society. The productive forces are managed as and for what they are, social productive forces. In the deepest sense, social and economic development is now the outcome of the conscious and collective control over society by freely associated human beings. On this foundation, socialism eliminates the anarchy of capitalism.

This article is posted in English and Spanish on Revolutionary Worker Online
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