The failure of free market policies evidenced by the collapse of major banks and big falls on the stockmarket raise whether there is an alternative to the market as a way of running society. Judy McVey examines what a planned socialist economy would look like

Millions of people are looking for answers as the economic crisis grows daily. In a complete turn-around western leaders have abandoned pure neo-liberal economic policies and admit that the state can intervene to save jobs and take over businesses and that we can spend government surpluses in a recession.

This has given rise to hope that we are seeing an end to the neo-liberal consensus which has wrecked our lives for the past 25 years.

But their idea of nationalisation of the major banks is not about bailing out the workers who face losing their homes.

Although public anger has led governments to talk about imposing limits on CEO salaries there is no talk of governments asserting control over the banks’ operations or taking a slice of their profits.

The bailouts are about stabilising capitalism not taming the market.

But the question has been raised—is there a better way to run the economy than leaving things to the free market? Would a nationalised economy be better?

Many people are learning that the money is there for governments to save jobs and improve welfare. If we taxed the rich and their corporate profits adequately we could fund homes, pensions, services and jobs to benefit us all.

The housing crisis has resulted in hundreds of empty homes left by victims of unaffordable mortgages, yet thousands are homeless. It is not difficult to draw the conclusion that homeless people can be housed in empty houses.

It should be a principle that all people have access to water, food and shelter. After all the economy should be about satisfying the needs of human beings.

Socialists support nationalisation if it is used to protect jobs and homes.

Nationalisation would mean the government running the factory or service, which is not the same as Kevin Rudd’s subsidy to the car industry—this will save jobs but its aim is to save the car industry bosses and their profits.

Socialists argue that if the car bosses cannot run their businesses and protect workers, then the government should take over and run the business.

Nationalisation would provide some protection, but it is not enough to protect workers. Look at how successive governments have cut jobs in publicly-owned services or the current effort of state governments to insist on below inflation wage rises for public sector workers.

Many commentators mistakenly call state-run enterprises socialist. However, real socialism is about ordinary people running things and managing the economy in the interests of human need, not profit. It’s about workers’ control.

Today the priorities in our workplaces are decided by bosses and managers, based on competition for profit.

So bosses wouldn’t be able to organise and do the actual work. Imagine the CEO of BHP-Billiton working in a steel mill, or the hospital managers really dealing with emergency wards.

The real needs of people with disability are addressed by care-workers. Teachers understand about learning difficulties and know how to create better learning environments. Childcare workers’ and parents’ input into childcare centres is crucial.

Apologists for capitalism say that market mechanisms like supply and demand can create a more efficient distribution of goods and services. But the food crisis illustrates how, even though we have more than sufficient food, it can’t get to people without the money to pay. The water and climate crises show those with power can block sensible suggestions for renewable energy.

Competition and the capitalist market must be eliminated.

Competition and planning

The free market is inherently inefficient due to competition between firms and the lack of planning across the economy. Different companies compete to manufacture and sell the same products, for example cars. This means there is unnecessary duplication in research and factories by any number of manufacturers producing very similar products.

But all car manufacturers compete to try to get a larger slice of the potential market—the number of people prepared to buy a car. That means they cannot know how many cars they are going to sell, and have to produce goods that may never be able to be sold. This problem—of overproduction—is particularly bad when recession hits and demand for goods such as cars slumps.

Today’s capitalism shows enormous potential for cooperation and planning despite the competitive logic. Individual firms undertake extensive planning in order to make sure they have sufficient inputs to continue production or to get their products to the stores on time. Postal services can only get mail to its destination through complex systems involving th=e cooperation by tens of thousands of workers.

Government welfare and health systems rely on tens of thousands of workers cooperating across the continent. Some people say the system is too complicated. Yet new technology makes it easier to communicate and share ideas and proposals.

A genuine socialist society would involve planning across the economy based on decisions made at thousands of local meetings in workplaces and communities to determine what individuals and society needed.

The best examples of workers’ cooperation have developed in workers’ struggles against exploitation and oppression. Because production depends on labour, workers had enormous potential social power to create a new social order based on this collective productive activity.

In 1917 workers kicked out the Russian Czar and set up a society run by workers councils. This workers government legislated equality for women and minority groups, an end to Russia’s participation in war and gave land to the peasants.

One of the first decrees issued by the Bolsheviks on taking power stated that “workers’ control over the manufacture, purchase, sale and storage of produce and raw materials and over the financial activity of enterprises is introduced in all industrial, commercial, banking, agricultural, cooperative and other enterprises”.

John Reed, a US socialist in Russia in the early days of the revolution, describes this process:

“There was a committee meeting at one of the factories, where a workman arose and said, ‘Comrades, why do we worry? The question of technical experts is not a difficult one. Remember, the boss wasn’t a technical expert, the boss didn’t know engineering or chemistry or bookkeeping. All he did was to own. When he wanted technical help, he hired men to do it for him. Well, now we are the boss. Let’s hire engineers, bookkeepers and so forth … to work for us.’ “

Over the last 90 years workers‚ control has reappeared again and again. In Spain 1936, in France 1968, in Chile 1973, in Poland 1980 and most recently in Argentina, workers have taken control of their own workplaces and shown that the old owners and managers were quite unnecessary.

In Iran in 1979, when the Shah’s dictatorship was overthrown, workers established “shoras” (councils) to run the factories. The writer Maryam Poya described how they functioned:

“The shoras began to exercise their power at every level of factory life, in purchasing, sales, pricing and orders for raw materials. Different committees were organised to carry out various tasks. Guild committees to secure trade union demands with respect to wages, conditions, insurance, health and safety.

“Financial committees to control the incomes and expenditures of the individual factories and to watch over managerial financial affairs. Communications committees to maintain contact with shoras in other factories.

“Women’s committees, made up solely of women, to press women workers‚ specific demands, especially in the chemicals and textiles industries where women constituted the majority of the labour force.”

In these examples the real movement came from below. As factory owners were driven out or fled, workers had no option but to take over the workplaces and run them for themselves.

The working class today is larger and more international than ever. While working conditions have changed, the potential social power of workers only grows because of human economies continue to depend on labour. For all the new technology and massive machinery, workers are needed to operate it.

A new society cannot emerge automatically. It must be built out of the people and situations we have today. But it will not be given to us from our governments. Are the proponents of neo-liberalism likely to put jobs and planet ahead of profit?

Workers will have to fight for change. It is in the struggles for reforms today that new ideas for better ways of organizing can emerge.

But while nationalisation may protect some jobs, we need to convince activists and unionists of the need for a new mass movement for real change.

There is a complex relationship between the state of the economy and the potential for resistance, many people may lose confidence as they lose their jobs and houses, but there will be anger and there are pockets of resistance already.

This year a revolt by unionists and anti-privatisation activists was the driving force behind a totally unexpected change of government in NSW as part of a campaign to stop electricity privatisation.

The worldwide crisis we are confronting is not simply the crisis of neo-liberalism as an ideology and as a policy regime, but of the capitalist mode of production itself.

We need to argue to defend every job and public service. Working people must fight for policies to ensure ordinary people don’t pay for the crisis and at the same time build alternative structures based on ideas of democratic workers’ control.

To do this effectively will require a rebuilding of the trade unions and the broader left and that is where socialists can put their energies. Socialist answers to the crisis are now more relevant than ever.

1 COMMENT

  1. Karl Max (the Great Socialist Economist) indicated long time ago that Capitalist economy is inefficent and it exploits the working class by making what he termed as “surplus value” which in simple terms means profit on the expenses of the poor. He concluded that due to those adverse factors capitalism will collapse and Socialism will emerge over capitalism and he emphasised that, such revolution is inevitale nor avoidable. Is this time that Karl Max was reffereing to? If it is, let the market economy go and welcome the Socialist economy.

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