Actually Existing Contradictions

Planning is a social process. But what exactly does that mean?

If we take as a point of departure the attempts at social planning under “actually existing socialism”, it has primarily meant dealing with the interests of both those responsible for and those affected by this planning. These are, by their very nature, two vastly different things. Planning procedures must therefore be able to accommodate these interests, weigh common and special interests, as well as prevent the realization of certain interests.

In this article, we will endeavour to understand existing social interests. In theory, this may seem like a simple task, but it is actually incredibly complex. The groundwork for this has been laid by the history of national economic planning in the German Democratic Republic (GDR), yet in the final analysis, the attempts to solve the problems associated with the consciously planned organization of society were similar in all actually existing socialist states, despite variations in their frameworks or preconditions. These iterations extend from the Soviet Union at the beginning of the 1920s and continue in the other countries after the end of World War II.

Conscious Planning

The Communist parties that took power followed a Marxist understanding of a post-capitalist society. Planning was not the only metric that Marx, his comrades-in-arms, and their students used to envision a post-capitalist society. Their ultimate goal was not only a planned society, but one that was consciously and systematically organized. As such, planning was to be carried out by everyone, in the interests of everyone, and on a global scale.

In her studies on economic issues pertaining to the events of 1912, Rosa Luxemburg followed Marx in emphasizing the need to distinguish between “plan and consciousness”. In so doing, she draws upon the role of planning in those pre-capitalist societies characterized by a natural economy. This formed the basis of one of the fundamental assumptions of the later Marxist planning debate: that, in principle, it is possible to consciously shape society and to organize economic and social processes — the metabolic relation between humans and nature — in a systematic manner on the basis of aligning the interests of all members of society.

The wager was that the socialization of the means of production, paired with people’s individual development, as well as the bulk of the wealth to be distributed, should lead to the delegitimization of social egotism and competition between individuals. It was clear that this would be a demanding process. People would need to be able to collectively balance their interests in a spirit of solidarity and then agree upon and execute a coordinated plan of action. Planning was seen as an instrument for shaping society as a whole, not just certain segments, as was the case for planning under capitalism.

The first attempts at a planned economy were based on Marx’s assumption that the road to socialism would gradually obviate contradictions of interest and make way for solidarity.

It was thought that this ability — which would enable planning in a post-capitalist society — would emerge from the lessons learned under the conditions of large-scale capitalist production with its wide-ranging and global division of labour, as well as from the social devastation it caused. Many on the Left saw the planning of production in capitalist ventures, the war economy, and the experiences of workers’ cooperatives in the wake of World War I as a sign that the time had come for a society free of competition, crises, unemployment, socially produced forms of suffering, and colonial exploitation. The debates around socialization during this time, which have come to be associated with names like Richard Müller or Otto Neurath, as well as the debates on the planned economy in Soviet Russia influenced by Lenin, were all based on this assumption.

Production was no longer dependent on individual entrepreneurs, but rather on the society’s capacity to consciously organize its “metabolic relation” with nature and the corresponding social relationships. Once experience and learning had made this clear, there would no longer be any conflicts of interest. As such, they focused on the ability of workers — who had previously been the object of corporate and state planning — to recognize their own interests and shape production and distribution accordingly, with the outcome being a different kind of planning.

Contradictions Old and New

However, the first attempts at a planned economy were also based on Marx’s assumption that the road to socialism would gradually obviate contradictions of interest and make way for solidarity. The alignment of interests was understood as an identity of interests. As a result, economic phenomena such as money, credit, and so on would lose their relevance.

In the wake of the October Revolution of 1917 and the experience of the USSR and post-1945 in the actually existing socialist countries, the assumptions about the behaviour of the various economic subjects, including companies, the public administrations, and both of their respective employees were in many respects governed by a revolutionary — and to some extent delusional — optimism, but also at least by dreams of a completely fresh start. However, it became clear very early on that the “birthmarks of the old society” were more persistent than the revolutionaries of 1917 and 1945 had anticipated, and that the new constellations of contradictions were no less complicated.

For starters, a political revolution only partially transforms the conditions under which people live and work. Even if private ownership of the means of production is abolished or restricted, the productive apparatus and its technologies remain unchanged. This is also true of the hierarchies among employees, not least with regard to the contradictions in gender relations. As early as 1920, Nikolai Bukharin asked why workers’ behaviour should be any different after the revolution. After all, eight hours spent working on the production line is exhausting and limited workers’ ability and desire to plan or reflect on how to evaluate the economic relationships that initially seemed to have nothing to do with their everyday lives.

It became clear that planning in a post-capitalist society could not simply be a matter of distributing products and services.

There was another problem as well. In his 1923 essay “On Morals and Class Norms”, Soviet economist Yevgeni Preobrazhensky contrasted the behaviour of employees in the commercial sector under the conditions of war communism — in other words, a (more or less) planned distribution of products without the interference of market relations or money — with that under the conditions of the New Economic Policy (NEP). This shift in economic policy officially authorized the market, commerce, and money. According to Preobrazhensky, unfriendliness and arrogance had previously been the norm. With the change of policy, the shop assistants had once again become friendly and courteous. It was obvious that market relations could not simply be abolished and replaced. Their existence was not a question of ideology or power, but appeared to have firm economic foundations.

In light of this, it became clear that planning in a post-capitalist society could not simply be a matter of distributing products and services. Planning meant planning the circulation of goods and money, among other things. Marx had analysed what the resulting contradictions meant for capitalism, but what did they mean for socialism, in the transition to a post-capitalist society? In order to pivot from mere planning to a consciously planned organization of society, planning had to be understood both in theoretical and practical terms as a process of resolving contradictions of interest or as a process of creating the conditions for this resolution. From the mid-1950s onwards, all theoretical debates and practical attempts at reform centred on this.

The issue was the relationship between the interests of individual employees, the collective interests of the company, and the interests of society as represented by the state. Resolving the contradiction between the workers’ justified interest in high wages, decent social benefits, sufficient leisure time, a normal workload, and opportunities to be involved in decision-making, on the one hand, and society’s interest in high labour output and productivity on the other proved more complicated than it previously appeared.

For example, social policy had to be secured by a constant increase in labour productivity and continued modernization of the production apparatus. This in turn was only possible through training and qualification programmes, with the associated shifts in hierarchies among employees it entailed, and by challenging previous social norms. All of these factors also had to be summarized in appropriate metrics in order to evaluate them in the planning process. The aim was to express these factors in monetary terms. But how can emancipation (as the goal of socialism) be expressed in financial terms?

The question also arose as to how to resolve the contradictions between urban, rural, and other regions, or the contradictions in bourgeois educational privilege. Balancing the limited availability of both training programmes and university education with the need for a workforce that matched the desired economic and social structures meant that not everyone was able to receive the education they actually desired.

The support given to working-class children at universities meant that children from intellectual families were at a disadvantage, even though there were many other avenues for them to pursue their academic ambitions. The targeted promotion of women challenged traditional patriarchal hierarchies in all social classes. On the topic of higher education: the requirement that people accept job assigned to them in their desired profession after graduation (even if there were different options available), was also often at odds with personal interests and interfered greatly with individual life plans. Just because a person recognized the social necessity, did not mean that they were satisfied with the situation.

Who Actually Manages the Economy?

On another level, the fundamental question arose as to the character of the objects of planning, the production sites and industries, and the economic subjects. Answering this question allows us to characterize the relevant potential or required methods of planning. Commodity-money relations and the market play a central role here. The question of whether or not a post-capitalist or non-capitalist economy can still be defined by commodity production is still the subject of heated debate today. Beyond the political and ideological dimension of this problem, the answer depends on the importance one attaches to the interests of economic subjects: are they merely the object of planning or are they both object and subject?

In any event, the reality quickly revealed that these economic subjects are fully-fledged producers of goods, and that the market continues to exist as a transitional society under socialism. This applied not only to the private companies that still existed in the GDR, for example, but also to the state-owned, co-operative, and state-run enterprises. In addition, the economies under actually existing socialism were closely intertwined with the capitalist-dominated world market and thus were unable to behave in any other way than as commodity producers.

If we can draw any lessons from actually existing socialism, it is that actually existing conditions must serve as the starting point for a planned economy.

Until the 1970s, theory and economic policy wrestled to understand the simultaneous existence of the market and the planned economy. In the end, it was generally accepted that under the current conditions, the uneven development of production prohibited the kind of immediacy that would have ideally characterized relations between the economic subjects in economies without commodity relations. This meant that the fruits of labour had to be transformed into commodities in order to be exchanged.

As producers of goods and participants in the market, enterprises had to adapt to fluctuating demand, sell their goods at the highest possible prices in order to generate profit so as to then be able to pay wages and invest. This pitted their interests against those of other enterprises (who had the same goals) and against consumers. Every stipulation and every withdrawal of funds for social purposes meant a subsequent decline in the enterprises’ interest in operating more effectively. Furthermore, this occurred irrespective of whether these restrictions ultimately benefited the workforce in the form of social benefits.

The economic reforms implemented in all states under actually existing socialism from the 1960s until its demise attempted to do justice to this constellation of interests. They consistently oscillated between two poles: expanding the innovative capacity of different companies by granting them more autonomy — which in turn led to social problems such as growing income disparities — and restricting their autonomy with regard to decisions on investments and product range, which in turn generated supply problems and a decline in economic performance. None of the approaches, be it the more centralized approach in the GDR, the Yugoslavian approach of workers’ self-management, or the Hungarian approach of greater autonomy for companies, was able to solve these problems.

What Can We Learn?

If we can draw any lessons from actually existing socialism, it is that actually existing conditions must serve as the starting point for a planned economy. Furthermore, it is almost impossible to make reliable predictions about how a planned economy will look in the future — everything depends on the environment in which this question arises.

Every new attempt at a planned economy will be a planned economy in transition, in which new economic, social, and cultural relationships emerge. The implementation of the consciously planned development of society must result from social learning processes. In today’s world, this means carefully studying the real planning processes and participating wherever possible, or even creating these opportunities ourselves.

Before planning models can be developed, a capacity for self-change must first be cultivated.

The attempt to democratize budgetary policy, as undertaken in Porto Alegre and Rio Grande do Sul in Brazil in the early 2000s, was perhaps the most comprehensive attempt at emancipatory planning. Determining what services are needed, comparing needs and existing resources, prioritizing projects in a public, grassroots democratic process, formulating clear directives for parliaments and administrations, and holding politicians and administrations publicly accountable for fulfilling citizens’ directives was similar to the planning process under actually existing socialism, but realized in a very different way.

Nonetheless, this grassroots democratic principle formed the basis of incorporating computer programmes and the Internet into planning practices. As far as the present discussions are concerned, we can conclude that the question of digital planning and replacing money with other units of exchange must be preceded by a sober analysis of the interests at play and the conditions of reproduction in different companies.

The results of such attempts never cease to surprise. In this case, right-wing conservatives and left-wing avant-gardists alike felt that their perceived monopoly on representing the interests of “the people” was under threat. The initiative foundered in the face of resistance from both camps. Initiatives in Germany inspired by this project suffered a similar fate.

Before planning models can be developed, a capacity for self-change must first be cultivated. Despite its often being underestimated, the transition from planning to regularity ultimately also constitutes a “cultural revolution”. This must begin now, not when the issue of social planning becomes relevant.

This article first appeared in LuXemburg. Translated by Hunter Bolin and Louise Pain for Gegensatz Translation Collective.