Red Plenty – My Brush With Brezhnevism

by John Holbo on June 1, 2012

Apparently some readers have been confused about Red Plenty, thinking it is non-fiction. I had the opposite problem, or possibly it wasn’t one. I knew it was fiction but I had the wrong idea about what kind. This error persisted, uncorrected. I actively avoided all reviews or summaries. I solicited no assistance, along the way, from “the panther-footed Mr. Google,” as he is described in Spufford’s “Acknowledgement” section. As a result, I didn’t know what the hell was going on – at all – until the end. Because the one thing I thought I knew about the book – no, I don’t know where I mis-acquired this notion – was that it is a fictional alternative history of how Red Plenty, the fairytale dream, came true.

WARNING: Contains plotspoilers. (It turns out the Soviet Union lost the Cold War!)

I thought the premise of the book was: technical-political obstacles to an efficient Soviet-style planned economy somehow overcome. Some Platonically profound mathematico-industrial linear-programming la-dee-da alternative to the price mechanism is discovered that is, stipulatively, consistently superior, in practice. The first chapter, ‘The prodigy’, about Kantorovich’s bright plywood notion (read it yourself!), confirmed for me that this was indeed where we were going. Now you tell the story of how, just as Krushchev predicted, the USSR buries the West – in washing machines. How would the West have reacted if, in 1980, the income of the average Soviet worker passed that of his Western counterpart? How would the philosophical defense of capitalism and Western democracy have held up if the Soviets had managed to keep the growth rate up around 6-8%, year on year on year. I imagined, on the Soviet side, we might be treated to the fictional spectacle of some Steel-and-Concrete Glass Bead Game cybernetician Magister Ludi thrillingly shuffling all the productive pieces around, to the appreciative oohs and aahs of an audience of knowing fellow academicians.

Oh, to be an economist who can perfectly, rationally, plan a whole economy! Such sensitivity! The music of the spheres is a tin whistle to this! Ah, the delicious counterpoint that shall play out if this PNSh-180-14s continuous-action engine for viscose production is placed just so, its twin output streams of sweater yarn and tire cord marching and braiding, one over the other, joining this yet-more-harmonious overall stream, flowing on into a vast ocean of production and distribution!

The less lovely counterpoint to this would, naturally, be an inevitable degree of oppressive, Soviet-style unfreedom, or at least political/cultural alienation of the average workers from the planners, whose heads are in the Marxist clouds. But lots of washing machines! Would you prefer Western freedom and inequality to rule by genuine Soviet Philosopher Kings, if the philosophers could provide cheaper, better washing machines?

Again: why did I imagine the book was going to go this way? As I said, I don’t know where I picked up the idea, but it really fired my imagination. I was kind of jazzed to read about it.

So I was reading and reading and, like Mr. Khrushchev, started to feel a bit confused that things weren’t working out. Bad harvest in ‘63. But I figured the followers of Kantorovich were going to pull off some tremendous last-minute technical save. How not, if we were actually going to get to what the title promised? With Mr. K. sidelined, it was going to have to turn out the Brezhnev of this, fictional world, was a go-getting reformer, and the linear programming would deliver the goods, just like Mr. Scott always manages to get the engine running on Star Trek. (The basically sensible-seeming objections put forth in the woods by the pragmatist-cynic stick insect Mokhov would be stipulated to meet some fitting technical-political death.)

And then it was, like … over. And the communists lost. The final pages of the book, which I had been counting on to relate the glorious futurity of Red Plenty, stretching perhaps even to the stars, turned out to be devoted to notes and acknowledgements. Man was I one confused kid.

But I don’t mind having been an idiot. I feel I have lived the dream, to an even fuller degree than the author himself can reasonably have hoped. So I suggest you give a copy of the book to a suitably sheltered and suggestible friend, and lie about what it’s about. Let them enjoy the fairy tale, for as long as it lasts. I did. (But I never believed in Lysenkoism! Not even for a page!)

{ 55 comments }

1

Bloix 06.01.12 at 3:04 pm

I left the book with the strong feeling that the point of story was contingency. If only Khrushchev had had better manners; if only cooler heads had prevailed at Novocherkassk; then, perhaps, the introduction of modern computing into central planning would have created a productive economy that would have allocated resources and encouraged innovation efficiently. So your misreading of the story seems natural to me – the actual historical ending, the novel contends, was not the inevitable result of an irredeemably flawed ideology.

2

Zamfir 06.01.12 at 3:09 pm

I though the same. The cover contributes to it, and for some reason it got a “science fiction” label attached to it.

3

William Timberman 06.01.12 at 3:26 pm

Lovely take. But it’s exactly that effect on you which distinguishes Spofford’s muse from those of other novelists/critics of the Soviet debacle. The academicians believed, at least for a time, that they could do it, and they probably felt very much like your misguided reader self felt as, slowly, they were disabused of those beliefs.

Couldn’t happen here, of course.

4

Neville Morley 06.01.12 at 3:42 pm

At the risk of becoming very tedious on the subject, I return once more to the theme of the importance of implied counterfactuals – something which also, I think, helps explain the generic confusions discussed in, and in response to, several of the earlier posts. Most ‘proper’ historians regard counterfactual history as a bit of a joke, a trite and intellectually vacuous game that promotes a narrow and rather silly view of historical causation – mainly because it usually is (e.g. Niall Ferguson’s Virtual History collection). However, as Geoffrey Hawthorn has argued in Plausible Worlds, and a few other people like Ned Lebow have demonstrated, counterfactual history can be a powerful tool for analysing caustion and consequences – above all because all historical accounts rest on implicit counterfactuals, even if the writer isn’t actually aware of this. And of course science fiction has, in a different but equally powerful way, shown the same thing.

What’s striking about Spufford’s book is that it doesn’t offer a counterfactual history of its subject; perhaps because, inevitably, the moment you start deviating from the path of what actually happened, especially in describing a world unfamiliar to your readers so they don’t have any criteria of their own for judging the plausibility of what’s being narrated, the sky’s the limit and so there’s no particular reason to believe that the account is anything other than fantastic. If Spufford had offered a counterfactual Soviet Union, actually managing to solve its problems and achieve sustained, non-capitalistic growth, it would all too easily be dismissed as a polemical fantasy, and rendered more or less pointless.

No, what we get is a historical account that constantly emphasises the possibility of alternatives; the counterfactual is always before our eyes, the contingency of history is represented time and again. The whole aim of the presentation, cleaving as close as possible to reality even in the fictional sections, is to make us believe in the real possibility that things could very well have been different (and, as I’ve suggested elsewhere, to imply that they could also be different in future; it’s the old Marx move of showing that the past does not support the idea of the inevitability and universality of capitalism, therefore there’s no particular reason to believe that capitalism is our only option for the future).

Or, what Bloix said.

5

J. Otto Pohl 06.01.12 at 3:47 pm

Whether the problem was flawed ideology seems broader than the scope of the book. The problem was the actually existing Soviet economy had a number of problems that made it unsustainable in the long run. Effective central planning would have resolved some of the most important economic problems. But, it would not have solved all of them. Soviet agriculture was always a problem not only regarding distribution which was linked with planning, but also in production. They simply could not make their collective system produce enough food to adequately feed their population. It was the one basic area where the USSR was not self sufficient and was faced with the choice of either famine (1921-1922, 1932-1933, and 1946-1947) or importing food. Now importing food is a strategy used by a number of economically successful countries including the UK. But, ideologically the Soviet system aimed for autarky. It is one thing for capitalist states to rely upon international markets for key goods and quite another for the motherland of socialism to be dependent upon capitalist farmers in the US and elsewhere for the very physical survival of its population. The other option would have been to follow Poland and Yugoslavia and dismantle the collective and state farms. Perhaps by expanding the private plots allocated to collective farmers. But, this would represent a serious roll back of socialist property in favor of private property and may very well have served as the basis for a move to greater privatization just as it has in China and Vietnam.

6

ajay 06.01.12 at 4:05 pm

Because the one thing I thought I knew about the book – no, I don’t know where I mis-acquired this notion – was that it is a fictional alternative history of how Red Plenty, the fairytale dream, came true.

I had exactly the same notion, up to at least half way through the book.

Spufford’s obsession seems to be “Failed Dreams”, actually – being first to the Pole, finding the North-West Passage or Symmes’ Hole, building a British space programme or a SST, and now this…

7

Bloix 06.01.12 at 4:07 pm

“the actually existing Soviet economy had a number of problems that made it unsustainable in the long run.”

This may indeed be true. But I read Spofford as arguing that it’s not necessarily true.

8

Sock Puppet of the Great Satan 06.01.12 at 4:11 pm

“But, it would not have solved all of them. Soviet agriculture was always a problem not only regarding distribution which was linked with planning, but also in production. They simply could not make their collective system produce enough food to adequately feed their population.”

J.Otto, was that a problem of USSR’s geography or a problem with their agricultural practices? Could they not effectively use methods like are used in U.S. Agriculture? Or was it a shortage of synthetic fertilizers? Lack of high-yield grain hybrids? My impression of the USSR is that their mechanical engineering was great, their electrical and electronic engineering OK, but their process and chemical engineering was frickin’ awful, and their biology retarded by Lysenko, so I wouldn’t be surprised if they had shortages of the agrochemicals or grain hybrids that raised Western agricultural yields.

9

J. Otto Pohl 06.01.12 at 4:25 pm

#8

It was largely a problem of lack of incentives to produce on the collective farms. The work brigades got paid for work unconnected to actual productivity. So they did that work and did not do what was necessary to maximize production. On a small scale experiments in the link system rather than the brigade system proved to be quite successful. That is giving small groups of kolkhoz workers financial incentives to increase agricultural output. But, the Soviet government rejected a large scale move from the brigade system to the link system for political reasons. Also the private plots given to collective farmers after 1936 despite being small produced a very large portion of Soviet vegetables, eggs, and chickens. This is because they could sell them for premium prices at the various farmers’ markets in the USSR. Technical problems like a lack of chemical fertilizers could be solved within the Soviet system. For instance while there was a shortage of such chemicals in the 1960s by the 1980s Uzbekistan’s cotton and other crops had been dangerously over saturated with fertilizers.

10

Data Tutashkhia 06.01.12 at 4:27 pm

Buried in washing machines, huh; but in reality it’s not all that exciting. I once watched some documentary, and they had excerpts from Khrushchev’s diaries. They read an entry, he just returned after visiting Sweden. It went something like this: ‘the damned Swedes, they have exactly what we were trying, so desperately, to build, all these years. And they achieved it with little sweat and without any blood at all. How did they manage, dammit?’

So, there you go: Sweden is the story. Bo-ring.

11

J. Otto Pohl 06.01.12 at 4:38 pm

Data:

#10

Yes, by the 1960s the ideology of actually achieving communism had pretty much died in the USSR in favor of a social welfare state providing an ever increasing material standard of living. The Soviet’s were pretty good at this in the 1950s and 60s and even into the 1970s there were considerable strides made in Central Asia. But, a giant Sweden is not something that really stirs anybody’s passions. The USSR compared to Sweden, however, had a few disadvantages. First, it was a lot poorer. Second, it was an authoritarian police state. Third, it was not an ethnically homogeneous state free from discriminatory practices. The loss of belief in the revolutionary ideology that marked the early USSR was pretty notable even outside the USSR by the late 1960s. China, Cuba, North Vietnam all became more important models for many revolutionary socialists than the USSR.

12

Norwegian Guy 06.01.12 at 5:05 pm

“It was largely a problem of lack of incentives to produce on the collective farms. The work brigades got paid for work unconnected to actual productivity. So they did that work and did not do what was necessary to maximize production.”

While that could be true, it’s not different from most other workplaces. I have worked in several occopations, both in manufcturing industry and services, and I’ve never had financial incentives connencted to productivity.

13

shah8 06.01.12 at 5:51 pm

One thing about authoritarian police states:

They really, really, hate the decentralization of power (and centralization of tax/law) implied by modernizing rural agriculture in a productive way. The US South wouldn’t do it. The Nazi dreamed of something else entirely. The Soviets never really committed to anything other than a very Taylorist model. The Chinese still has ridiculously unproductive rural agriculture. And the Uzbecks? Oh the poor Uzbecks!

The Soviets couldn’t compete with either nearly free labor as what Myanmar rice gets, or the capital-intensive model you see in the US or Australia. They certainly couldn’t provide sophisticated boutique items like what you see out of Italy or Japan, neither of which is *that* productive.

Looking at how a country produces food provides a great deal of intelligence about the country’s political system.

14

Brad DeLong 06.01.12 at 6:23 pm

William Timberman Inserts the Knife into My Gut, Twists, and Leaves Me Collapsed and Bleeding on the Floor:

>Lovely take. But it’s exactly that effect on you which distinguishes Spofford’s muse from those of other novelists/critics of the Soviet debacle. The academicians believed, at least for a time, that they could do it, and they probably felt very much like your misguided reader self felt as, slowly, they were disabused of those beliefs.

>Couldn’t happen here, of course.

15

Phil 06.01.12 at 7:07 pm

oppressive, Soviet-style unfreedom, or at least political/cultural alienation of the average workers from the planners

Say you work for Lockheed or General Motors or Coca-Cola. In what sense are you, as an average worker, *not* alienated from the planners?

16

Sebastian h 06.01.12 at 7:24 pm

“Say you work for Lockheed or General Motors or Coca-Cola. In what sense are you, as an average worker, not alienated from the planners?”

Your purchases still influence the economic calculus in ways that don’t exist in a planned economy. Or choices not to purchase can still lead to something failing. No one is arguing that average individuals rule in a capitalist economy, but their aggregate influence is typically much stronger than in a command economy. Also they tend to be ridiculously freer, which some here will argue is a historical accident.

17

Walt 06.01.12 at 7:34 pm

I had the exact same impression about the book as Holbo, et al, until this seminar.

18

The Raven 06.01.12 at 8:06 pm

“inevitably, the moment you start deviating from the path of what actually happened, especially in describing a world unfamiliar to your readers so they don’t have any criteria of their own for judging the plausibility of what’s being narrated, the sky’s the limit”

No, not so. The physical world doesn’t change, nor does human society magically change.

I now refer you 75 years of post-John Campbell science fiction.

(Colin Danby, if you are reading, this is part of your answer.)

19

Neville Morley 06.01.12 at 9:20 pm

Okay, “the sky’s the limit” was a massive exaggeration, but given that we’re talking about what is and isn’t plausible in the development of a very different society from anything we’re familiar with, I think there is an issue here. In a counterfactual account of our own society (you could even take 1984 as a paradigm of this) the writer is constantly having to work to circumvent the reader’s inclination to say “no, that could never have happened here, we Brits aren’t like that”. The problem in Red Plenty is that the society being described is already strange and almost unbelievable; Spufford can persuade us that it’s real by citing historical evidence and studies, and through the rhetoric of realism, but that still leaves him without much scope to deviate from the reality because, as far as most of his audience is concerned, any deviation is just as plausible and hence just as implausible as any other.

Shorter version: I don’t accept the implication that ‘human society’ is a universal constant…

20

Chris Williams 06.01.12 at 10:05 pm

Ajay: ““Failed Dreams”,… building a British space programme or a SST,” – but there _was_ a British SST. Spufford’s angle on it is about how the state capitalists made it pay (for some values of ‘pay’). And the BBC guy is the one who makes Vodaphone work, Wellcome _do_ sequence the genome for nothing, and Dave Braben is happy with the infinite space he’s created, even if Ian Bell isn’t. Not all the dreams have failed.

21

TallDave 06.01.12 at 11:30 pm

#11 — Sweden had a banking crisis in the early 1990s and sliced gov’t control from ~70% to about 50% of the economy, while the U.S. has grown it from ~30% to ~40% in that time. More importantly Sweden’s full of cultural Swedes, they’ve always been highly productive all the way back to ~1900.

22

TallDave 06.01.12 at 11:34 pm

#16 Are we merely lucky to live in a world where freedom is more successful than tyranny? I think here I can invoke the weak anthropic principle and suppose a universe that gives rise to the complexity of intelligence life is likely to also favor systems of free association with their greater collective decision-making processing power.

23

The Raven 06.02.12 at 1:03 am

Prof. Delong, I don’t think it is as bad as all that. It seems to me that there has been progress between the time of red plenty and our time. Not enough, no. But the stories of austerity and wealth are centuries-old in our culture; the stories of cooperation are being written now.

24

Plume 06.02.12 at 1:40 am

Thanks, Crooked Timber, for doing this seminar. I have Red Plenty at home, but have not opened it up yet. Reading David Mitchell’s Cloud Atlas right now, but Red Plenty is next in line.

My first encounter with your seminars was George Scialabbi’s, which was immensely helpful in my own intellectual development. Sent me chasing after all kinds of different thinkers and thoughts, after his book had done that many times over.

Looking forward to reading all entries closely.

25

John Holbo 06.02.12 at 1:41 am

Thanks for comments. I’m glad I am not alone in having a completely wrong idea about the novel!

26

Plume 06.02.12 at 2:30 am

TallDave,

30 to 40% of the economy? Might you be confusing government spending(roughly 25% of GDP) with government control? Because, from where I sit, private business controls the American government, not the other way around. There is very little American economy in public hands, and certainly nowhere near 30%. Yes, the government endlessly spends public money to prop up, support, bail out and enable private business profitability. But it does so with very few strings attached, and never demands ownership over the means of production. It pumps up private profit often in the background as well, building up infrastructure, paying for R and D the private sector won’t pay for, developing technologies that are not profitable (short term) for private investment, etc. etc. In short, it externalizes their costs to a massive degree. Private business profits from that public expenditure enormously — never giving back what it takes from that public — and could not succeed without it.

Our national coffers are drained at an enormous clip to protect private business ownership, expand private markets for those owners, police private markets for those owners. Our endless wars are almost exclusively fought on the behalf of private business concerns, and almost never by people who own those private business concerns. If I read you correctly, you believe there is a dichotomy between our system and the Soviet’s: freedom versus tyranny. I see no such freedom in our system, except for the capitalist class. But their freedom and liberty is our enchainment, and the planet’s.

We desperately need another system, neither capitalist nor Soviet style. IMO, it must be fully democratic, localized, capped to be in harmony with nature, with the needs of all always and forever trumping the greed of a few. It should have no profit, no money, no private ownership of the means of production. Our dwellings should be our own (castle), but no business is in private hands. Decentralized, democratic control, with national guidelines, laws, goals. The main goal being to live sustainably, under an egalitarian, democratic flag.

27

Sebastian 06.02.12 at 2:31 am

You left the spoiler above the fold damn you!

28

William Timberman 06.02.12 at 3:27 am

Brad Delong @ 14

Yeah, I should put away the knife. I know as well as anyone does that the aggression which comes in the wake of fear and frustration is always misplaced. The truth is that you and your fellow dissident economists are among those I owe the most to, my essential mentors in comprehending the incomprehensibilities of our present discontents. I think of you all, believe it or not, the way that Paul Krugman sometimes thinks out loud about the Europeans: If I start disbelieving in this solution to economic and political progress, where shall I go? What will be left? In truth, that’s not your problem, it’s mine, or rather ours — in the broadest sense of ours.

Where indeed shall we go? To be successful, I suspect that whatever comes next will have to be a work of bricolage as well as an act of faith, and we’re going to need all the pieces. So, yes, I owe you an apology, and offer it to you freely. Henceforth I’m gonna try to give credit where credit is due, put away my knives, pins and voodoo dolls, and try to get on with understanding what actually needs to be understood, doing what actually needs to be done.

29

TallDave 06.02.12 at 4:38 am

Plume,

Yeah okay, let me know when private business shows up in DC with guns and seizes 1/3 of what the government earns in voluntary exchanges.

Private business used to do R&D, I remember IBM had a whole giant campus devoted to it. Then the government started doing it for “free” — oh excuse me, I mean with money they seized from private businesses.

I know, I know — but TallDave, what about roads! Let me note for the record that roads are a legitimate function, and I fully support the roughly 1% of gov’t spending that actually goes towards building roads (not including the $100K here and there to move a common landscaping bush because it’s a “wild” specimen, build a fence around it to keep the overeager public from trampling it in their excitement at seeing a common landscaping bush, and monitor the bush for the next 100 years — you think I’m kidding here, don’t you?).

A fully democratic system? Really? So, if 51% of the people decide any fraction of the other 49% should be put to death for any particular, the system should allow that? Okay then, you enjoy your fully democratic state, I’ll take a constitutional republic that is quite anti-democratic in its protections of life, liberty, and property.

30

TallDave 06.02.12 at 4:47 am

14 BDL,

And a lot of people in the West wanted to believe they had succeeded, that’s why Duranty received a Pulitzer Prize for claiming things were wonderful during the truly horrific period the Ukrainians call Holodomor.

http://en.wikipedia.org/wiki/Holodomor

Soldiers loaded the harvest onto trains and the people they left behind were fighting over who got to eat their shoes, it is viscerally awful even to read about it 80 years later.

Wishful thinking can have terrible consequences.

31

Data Tutashkhia 06.02.12 at 8:29 am

Wishful thinking can have terrible consequences.

Are you saying that Duranty caused the Ukrainian famine?

32

peterv 06.02.12 at 9:12 am

Sock Puppet of the Great Satan at #8 said:

“My impression of the USSR is that their mechanical engineering was great, their electrical and electronic engineering OK, . . . “

In fact, for avionics (electronics used in aircraft and spacecraft), the USSR was well ahead of the West, which is why Western defence electronics firms quickly recruited Soviet avionics engineers and purchased Soviet avionics engineering enterprises immediately the Wall came down.

33

David 06.02.12 at 10:04 am

“TallDave 06.01.12 at 11:30 pm
#11—Sweden had a banking crisis in the early 1990s and sliced gov’t control from ~70% to about 50% of the economy, while the U.S. has grown it from ~30% to ~40% in that time. More importantly Sweden’s full of cultural Swedes, they’ve always been highly productive all the way back to ~1900.”

Sweden has certainly become more inegalitarian in the last 20 years, but taxes haven’t gone down, the private sector isn’t larger, around 50%.

34

M 06.02.12 at 3:41 pm

Your purchases still influence the economic calculus in ways that don’t exist in a planned economy. Or choices not to purchase can still lead to something failing. No one is arguing that average individuals rule in a capitalist economy, but their aggregate influence is typically much stronger than in a command economy.

Actually, one of the reasons planners never got the prices right was that when staples weren’t deliberately underpriced, the state tended to face popular resistance.

(Also, since the aggregate influence of individuals is always 100%, and consumption Ginis in the Eastern bloc were lower, I don’t think the quantitative claim here is at all plausible.)

35

DaveL 06.02.12 at 4:32 pm

It’s a relief to find out I wasn’t the only one who expected an alternate-history SF novel*. I too kept wondering when it was going to deviate and it never did. Still, a fine novel and an informative and pleasurable read.

The story has been done before as alt-history. I wish I could remember by whom. Spinrad? (After all, he did the Hitler-as-SF-author novel “The Iron Dream.”) The idea was that one big computer would be better than lots of little ones. No linear programming, as I recall.

* I blame Ken MacLeod. His recommendation did it, because obviously SF authors only recommend SF books, imiright?

36

TallDave 06.02.12 at 5:47 pm

Are you saying that Duranty caused the Ukrainian famine?

That’s like asking if Goebbels caused the Holocaust. He wasn’t driving the trains, obviously, but had Duranty not covered up the crimes of Communism millions of lives might have been saved, not just in the Ukraine in the 1930s but later in China, Korea, Cambodia, Vietnam…

Sweden has certainly become more inegalitarian in the last 20 years, but taxes haven’t gone down, the private sector isn’t larger, around 50%.

Gov’t has gone from about 70% of GDP to about 50%. This was done mainly in response to the economic crisis of the early 1990s.

37

Plume 06.02.12 at 6:02 pm

@TallDave,

The American government has always done R and D. Going back to its inception. And private business has cashed in on that for more that two centuries, and owes the American people, the public, the commons trillions it will never pay back.

Again, the public sector has externalized massive mounts of costs for the private sector. The private sector could not exist as it does now without that. It never could have grown without the physical, virtual, technological and transport infrastructure created by that public sector. Plus, the government protects the shipping lanes (land, sea and air) for business, at the cost primarily to people who don’t own businesses. As in, with their deaths, maiming, impoverishment. The capitalist class is disproportionately UNrepresented in casualty counts, even though pretty much every war is waged on its behalf. The American empire itself was created for the benefit of capitalists. The Westward expansion was done on its behalf. Again, most of the blood and treasure spilled came out of the working class.

As for that supposed 1/3 seized from capitalists. Nonsense. Most American corporations pay no taxes. None. Zilch. Quite a few actually manage to manipulate the tax code enough to receive rebates, after billions in profits. If you want to complain about high taxes, you don’t have a leg to stand on when it comes to our system, as it’s the most business-friendly, business-coddling, business-pampering in the world. Read David Harvey’s recent The Enigma of Capital for a full list of the hundred plus times capitalism has been bailed out by taxpayers just since 1970. Total cost well over 16 trillion and counting.

Oh, and BTW, just one mile of roadway costs roughly one million dollars to make. A tiny fraction of Americans ever pay that much in taxes over the entire course of their working life. Yet we get to use unlimited miles of those roadways. Sorry, but every single American receives far more in public sector benefits than they put into the system, and no one receives more than business owners and the wealthy in general. That’s primarily due to the magic of generational investment, and horizontal sharing of costs.

Lastly, I’m not talking about democracy without a constitution. The people would vote on laws that would apply to all, so that that absurd scenario you toss off would never occur. Pure, participatory democracy, with no classes, no political parties, no private ownership of the means of production, and no way to concentrate power in a few hands. Power would be evenly distributed, across the board, to all citizens. The law would apply equally as well. We would be one big family, and share what that family produces equally, making what we need, in accordance with nature’s limits. As opposed to our currency system, which steals from those who produce (workers) and gives to those who rule (capitalists). Nothing could be less “democratic”.

38

TallDave 06.02.12 at 10:19 pm

It was only in the second half of the 20th century that the gov’t became such a large part of the economy that it began to dominate research. Furthermore, gov’t research is public domain — no company can patent and profit from it. That means the benefits redound to consumers, not companies.

The gov’t IS costs. You have it completely backwards — the government could not exist without the revenue it seizes from private business. All the things you mention aren’t done for businesses (which could do all of those things themselves at substantially less cost than they pay in taxes), they’re done for citizens who enjoy the fruits of production.

Ask Socrates if democratically sanctioned murder is an absurd scenario. And who says the laws apply to all? That’s just a U.S. law, what if people vote it down in your democratic system that doesn’t let people own things? “The people” can pass a law saying citizens should be put to death if they criticize your wonderful new system.

Workers are a cost, they only produce if a capitalist risks his capital to employ them in producing something.

The notions you propose have been tried and they have always resulted in poverty and/or mass murder. When everyone owns the means of production mutually, no one has any incentive to produce, and when property rights are taken away, rights to speech, life and liberty are quick to follow.

39

Grizzled 06.03.12 at 2:50 am

“Private business used to do R&D, I remember IBM had a whole giant campus devoted to it. Then the government started doing it for “free”—oh excuse me, I mean with money they seized from private businesses.”

Back in the real world, IBM did R&D when they WERE the computer industry and could expect to recover the great bulk of the benefits resulting from their research. The reason the private sector systematically underinvests in R&D is that the people paying for the work can’t capture all the returns; in other words, R&D has some of the characteristics of a public good. Public goods are under-provided by the market, which is why government spending on research is a net public gain.

All of which is the most orthodox of economics.

“Furthermore, gov’t research is public domain—no company can patent and profit from it. That means the benefits redound to consumers, not companies.”

Maybe in your alternate universe this is true; in the actual world e.g. the biotech industry is basically founded on the ability to patent things developed in universities using public money.

40

Matt 06.03.12 at 3:56 am

It was only in the second half of the 20th century that the gov’t became such a large part of the economy that it began to dominate research. Furthermore, gov’t research is public domain—no company can patent and profit from it. That means the benefits redound to consumers, not companies.

This has been wrong since at least 1980 in the United States. See the Bayh-Dole Act. The United States government itself holds a large patent portfolio and then makes the technologies available for licensing by private entities under the terms of 37 CFR Part 404. They’re certainly not in the public domain. See any of the technology transfer programs from the US national laboratories or NASA, where they proudly help to turn publicly funded research into privately owned commercial products.

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Plume 06.03.12 at 4:54 am

Matt,

It goes back further than that by a long shot. Private enterprise has always benefited tremendously from public sector work. A good book on the subject is Lewis Hyde’s excellent Common as Air. He traces the erosion of the Commons back centuries, focuses on our own history, but includes Europe and Asia as well. When it comes to recent private benefits after all the heavy lifting was done by the public sector, see the Human Genome Project, which is highlighted in Hyde’s book.

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Plume 06.03.12 at 5:37 am

@TallDave,

There is much to argue against in your post, but I’ll try to narrow that down to this paragraph:

Actually, government has no need of private tax revenue. Ever. Remember, it creates money and then releases it into the wild. It could just as easily control it directly and play hands on maestro(read David Graeber’s Debt for a great history on coinage, etc).

In the capitalist system, in fact, there is no viable currency for business without government creating it, distributing it, pricing it and guaranteeing its worth. Take government out of the picture, and you get chaos — with millions of competing currencies and methods of payment, none of which could be counted on to last. A recipe for disaster, obviously.

Government could just as easily decide to be the sole distribution point, collector, paymaster and arbiter of all economic transactions. It doesn’t need a single private business or citizen to pay taxes, if it doesn’t release money into the wild in the first place. Even in our system, there is no fundamental difference between you sending your tax dollars to DC or your state in exchange for goods and services, and you sending your consumer dollars to various CEOs for goods and services. All of it is economic activity. All of it creates economic activity and ensures the circulation of money. All of it is “other people’s money” at every stage of the game. In short, “redistribution.” It matters not (technically) whether the public sector controls all of that activity, or the private sector, or a mixture of the two (our system). Redistribution and endless circulation occur, regardless.

Where it does matter is in what is created, and for whom. Who benefits from production and distribution? When the for-profit private sector is involved, you have built-in incentives to do what is right solely for ownership, at the cost of what is right for workers, consumers, and the environment. When for-profit companies are involved, the consumer instantly pays far more than they should for any given product or service, because they pay for a multitude of things unrelated to the actual object. Like, marketing, lobbying, obscenely high executive compensation, tax attorneys, lawyers, shareholders, insurance, unsold merchandise, stolen merchandise, etc. etc. Workers in the private system are always ripped off, because ownership makes the vast majority of its money by underpaying them.

1. Value created by the workforce (X)

minus

2. Payroll distributed to that workforce (Y)

If that private company also has shareholders, it becomes even worse for workers, because ownership must take more from workers to give to shareholders, who provide zero “sweat equity” in the company and are forever changing.

And, if private companies slash prices for consumers, they must take even more from workers, or they lose money. There is no way around this. The system is set up to benefit very few at the expense of the many and the planet itself.

OTOH, a true democracy, with a citizenry that owns the means of production with equal shares, votes for what they want and don’t want to produce, votes for wages, prices and the like, can actually create a sustainable, egalitarian system that benefits the vast majority. And they would have an unprecedented reason to do just that. For the first time in history, a majority would be able to do what is best for the majority.

And, no, it’s never been tried before. There has never been a truly democratic socialist state, much less true communism. If the planet is to survive, we need to implement just such a system, to set the stage for real, small “c” communism.

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Plume 06.03.12 at 5:39 am

Sorry,

My coding failed. Meant to put this (from TallDave) into blockquotes:

“The gov’t IS costs. You have it completely backwards—the government could not exist without the revenue it seizes from private business. All the things you mention aren’t done for businesses (which could do all of those things themselves at substantially less cost than they pay in taxes), they’re done for citizens who enjoy the fruits of production.”

Wish you folks had a preview button.

:>)

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The Raven 06.03.12 at 7:00 am

Sebastian h, #16: “Your purchases still influence the economic calculus in ways that don’t exist in a planned economy. Or choices not to purchase can still lead to something failing.”

I remember the first time I saw similar language: it was on a sticker on a furnace in a rented apartment. True!

I don’t think you know very much about marketing. Marketeers are the planners of capitalism, and they do it, well, mostly, about as well as the Soviet planners did it. Oh, every now and again you get someone who really gets their hands on an understanding of some human need and makes a pile. But mostly it’s fail-land.

Perhaps it’s fair to say that that the problem is the same for all systems.

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Tim Wilkinson 06.03.12 at 1:51 pm

Also the marketers find their planning simplified by sticking as far as possible to a supply-push rather than demand-pull approach to desire satisfaction.

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Plume 06.03.12 at 5:06 pm

@The Raven and Tim Wilkinson,

Along those same lines. Marketing in American-style economies is deeply irrational in another way. It must create endless, constant demand for over-production. Your “supply-push”. Since the vast majority of what we have on our shelves was never ordered by any customer, they must find a way to sell what was produced without those orders. A more rational system, a far less wasteful system, would be “make to order.” Better yet, make to order locally.

Of course, it would be slower. But it would also lead to a heck of a lot less growth for land-fills, and prices could be lower because we’d no longer be paying for unsold goods, etc.

To me, commerce leaves the realm of logic, rationality and morality pretty much as soon as it leaves the single proprietor craftsman. I build a chair for you with my own two hands. You pay me for my time, skill and costs. If I then hire on people to build chairs for me, I no longer make my money from my own sweat, unless I still make chairs as well. Even then, I make additional money through the underpayment of my workers. I make more money the less I pay them in relationship to their production. Once I have a workforce, the capitalist system actually gives me incentives to underpay my workers. It’s built in. And the bigger I get, the further removed I am from the actual scene of production, and the more those workers are cheated.

I’ll never understand the cheerleading from those who think our capitalist system is so much better and more rational than any other economic system. To me, it rewards theft, inefficiency, waste and the endless exploitation of natural resources. It guarantees horrific inequalities of wealth, power and access. Capitalist triumphalism is pure delusion.

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The Raven 06.03.12 at 5:55 pm

Plume, #26: and the overweight US population is a direct manifestation of the supply-push.

What industrial capitalism does so effectively is make use of industrial production. Are you aware that the original Arts and Crafts movement was a political and social movement as well as a design movement? But it failed, and it failed on the raw economics: craft production could never supply the desires of more than a small aristocracy. When the early 20th-century capitalists realized they could pay their workers enough for them to buy the products they made, that was the end of craft production.

Industrial capitalism is a system that exploits industrial production. It is in many ways an inhuman system, but for satisfying human needs and desires it is a vast improvement over craft production. Without going the full Hayek, it seems likely that, even if Soviet planning had worked, it would have produced at most a modest incremental improvement over a mixed economy.

But…

There is, not very noticeably, a new arts and crafts movement in the offing. Exploiting new information-technology based methods of short-run production, it is possible it will eventually challenge mass manufacturing in the production of physical culture. Continuing John Holbo’s theme of a parallel universe, or perhaps a possible future, we might imagine an economic order which synthesizes the macro-economic insights of Keynesianism, the environmental and energy insights of modern research, and the short-run production technologies that are now emerging, into a more humane system.

But only perhaps. If this is going to be done, we are going to have dig in and start working on it.

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Doctor Memory 06.03.12 at 8:07 pm

Plume– at the risk of appearing to take TallDave’s side in this (and trust me, I do not have any truck with the saturday morning cartoon version of capitalism’s history), I think it’s worth asking the question, given your model, why all businesses are not then worker-owned cooperatives. If my options are between making chairs for you at a loss relative to the value of my labor, or making chairs for an enterprise in which my labor is fairly rewarded, why would I or anyone else ever choose anything but the latter option?

And yet while cooperative enterprises exist and occasionally even thrive, they are a tiny and feeble minority compared to their traditionally organized competition. I have my own set of pet theories as to why this is (and I do not believe that it is entirely due to the larger organizational deck being stacked by the capitalists), but I’d be curious to hear your take.

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Plume 06.03.12 at 10:24 pm

Doctor Memory,

obviously, it’s complicated. But, basically, we can’t test the theory because we don’t have enough options/variables to do so. Workers don’t have the ability to quit hierarchical structures to go to horizontal co-ops, because, as you say, so few exist. There aren’t enough jobs total out there, much less options between vertical and horizontal business structures, to really see if a change would work. And the powers that be do everything they possibly can to prevent a change from the vertical to the horizontal.

To me, logic says that if we get rid of all the obstacles in the way of worker-owned means of production, it would thrive. And by that, I’m not talking about Soviet Style or Chinese style ownership via political party. Their systems were/are top down as well. Never horizontal. Never democratic. Never participatory.

I’m saying if we could start fresh, truly fresh, we could design a system that meets social justice criteria as well as efficiency standards — the first being far more important in my book. Capitalism, afterall, meets neither, so we would still be ahead of the game if we gave extra weight to social justice at the possible cost of some efficiency.

Basically, we’d have no money, no profit, and no private ownership of the means of production. Our homes, OTOH, would be our own and would remain outside the realm of the Commons. But all commerce would fall under the rubric of the Commons. In place of money, we go to a system of virtual digits, awarded for work done. We each have a debit card, and we add or subtract those digits depending upon what we purchase. Virtual digits are infinite, so we never run out of funding for anything. There is no need for taxes, loans or debt. A national bank has all the funds it ever needs, so it need not tax citizens. All prices and wages would be locked down, via our national Constitution. There would never be any inflation or bubbles to burst. By law, we’d establish, say, four levels for wages:

Apprentice
Apprentice Artisan
Artisan
Artisan/Organizer

From top to bottom of the wage scale, we’d never go beyond a 4 to 1 ratio.

At the risk of turning this into a novel, will stop there. Would be happy to fill in blanks via questions, etc.

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TallDave 06.04.12 at 4:14 pm

Grizzled — nonsense, IBM did that before the first transistor was developed, and so did lots of other companies. Nor do biotech companies patent basic research, they productize basic research, which is very, very hard to do. If you don’t think so, please let us know when you make your first billion patenting other people’s gov’t research.

Plume — “Actually, government has no need of private tax revenue. Ever. Remember, it creates money and then releases it into the wild.” Uh huh, ask Zimbabwe how well spending unbacked fiat currency works out. That is just an astoundingly ignorant statement, and as my time is finite I’m not even going to bother reading anything else beyond that. Enjoy your economic fantasy realm.

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mds 06.04.12 at 7:03 pm

Uh huh, ask Zimbabwe how well spending unbacked fiat currency works out.

Ahem. That is just an astoundingly ignorant statement, and as my time is finite I’m not even going to bother reading anything else beyond that. Enjoy your economic fantasy realm.

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Plume 06.04.12 at 8:38 pm

According to goldbugs, our currency isn’t backed by anything either. Yet inflation for the last thirty years has run in the 3% range. Two years after we printed 16 trillion and handed it out like candy to kids, no change in inflation. And, again, there may be as much as a thousand trillion in derivatives circulating in the world today. Obviously, there are no actual, tangible assets backing that amount.

It’s all a fantasy. It’s all fraudulent. But the 1% lives high off the hog in real terms off of that fantasy. I’m saying let everyone share the fantasy, with real-world, uplifting, positive impact. Let everyone in on the sham and remake the sham into a new regime of social justice for all. Why do we protect and defend that fantasy for plutocrats alone? There is nothing rational about the concentration of wealth at the top of the top. Let’s extend that fantasy to every human being on the planet, and let’s do it the right way. Make labor the value. Make labor the measure. Not capital. Labor.

We could take a page out of our own history books to get us part of the way there:

Labor is prior to and independent of capital. Capital is only the fruit of labor and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.

– Abraham Lincoln. First State of the Union Address, 1861

What’s the difference between a thousand trillion in derivatives and infinite virtual digits, really? Nothing tangible backs our currency now, or those derivatives. Why not really back our currency, with human beings? Our existence and our labor is justification for those virtual digits, and the fact that we’re all human beings is the justification for their equal allotment.

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David 06.05.12 at 3:28 am

Winning the cold war seems to have sucked.

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Jake 06.05.12 at 4:13 am

The reason they’re called gold bugs is that they’re wrong. Citing their beliefs about monetary policy does not help your goal, unless your goal is to exasperate, bore, or troll. In which case: strong work, carry on.

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Plume 06.06.12 at 11:43 pm

Yes, they are wrong. And you would have caught that I agree if you had actually read what I said about inflation, which counters everything the goldbugs believe in. Not to mention the use of the term itself, which should have been a dead giveaway.

But, please do tell. If my writing bores you, why did you read it? And if you think me a troll, why on earth take the time to respond? Isn’t the better course of action to ignore, and keep silent on such boring, exasperating trollery?

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