How socialism can operate

Money flows through every aspect of society, and therefore affects every aspect of our lives. What possessions we have, the efficiency of the services we use, and how we are supposed to value ourselves are all shaped by the money system. We’re encouraged to think of the economy in much the same way as we think about the weather – something changeable, but always there. When the climate is ‘good’, life feels brighter. When the climate is ‘bad’, we huddle down until we can ride out the storm. Although we’ll always have the weather, the economy doesn’t have to be permanent. Our weekend of talks and discussion looks at the role of money in our society. In what ways does money affect how we think and behave? How does the economy really function? How did money come to be such a dominant force? We also look forward to a moneyless socialist society, which will be – in more than one sense of the word – free. In a socialist society, there will be no money and no exchange and no barter.

Goods will be voluntarily produced, and services voluntarily supplied to meet people's needs. People will freely take the things they need. Socialism will be concerned solely with the production, distribution, and consumption of useful goods and services in response to definite needs. It will integrate social needs with the material means of meeting those needs. Common ownership means that society as a whole owns the means and instruments for distributing wealth. It also implies the democratic control of the means and instruments for producing and distributing wealth, for if everyone owns, then everyone must have equal right to control the means and instruments for producing and distributing wealth.

Socialism is a money-free society in which use values would be produced from other use values, there would need no have a universal unit of account but could calculate exclusively in kind.The only calculations that would be necessary for socialism would be calculations in kind. On the one side would be recorded the resources (materials, energy, equipment, labour) used up in production and on the other side the amount of the good produced, together with any by-products. Calculation in kind entails the counting or measurement of physical quantities of different kinds of factors of production. There is no general unit of accounting involved in this process such as money or labour hours or energy units. In fact, every conceivable kind of economic system has to rely on calculation in kind, including capitalism. Without it, the physical organisation of production (e.g. maintaining inventories) would be literally impossible. But where capitalism relies on monetary accounting as well as calculation in kind, socialism relies solely on the latter. That is one reason why socialism holds a decisive productive advantage over capitalism by eliminating the need to tie up vast quantities of resources and labour implicated in a system of monetary/pricing accounting.

The individual would have free access to the goods on the shelves of the local distribution centres; the local distribution centres free access to the goods they required to be always adequately stocked with what people needed; their suppliers free access to the goods they required from the factories which supplied them; industries and factories free access to the materials, equipment and energy they needed to produce their products; and so on. Production and distribution in socialism would thus be a question of organising a coordinated and more or less self-regulating system of linkages between users and suppliers, enabling resources and materials to flow smoothly from one productive unit to another, and ultimately to the final user, in response to information flowing in the opposite direction originating from final users. The productive system would thus be set in motion from the consumer end, as individuals and communities took steps to satisfy their self-defined needs. When introducing new products it is not necessary to start out producing millions of units. You make a few thousand prototypes with some form of consumer testing and feed-back and measure how rapidly consumers take them from the store. Whether it will be the individuals whose job is to develop new products (chemical engineers, mechanical engineers, etc.) who can decide on their own to submit the requisition for resources to the manufacturing line, or whether some degree of community endorsement is also needed, will be society's policy choice.(It wouldn't be the workers' choice whether or not they want to make them much to the chagrin of some syndicalists on this list, or an industrialist unionist of the Industrial Workers of the World)

By the replacement of exchange economy by money-less common ownership basically what would happen is that wealth would cease to take the form of exchange value, so that all the expressions of this social relationship peculiar to an exchange economy, such as money and prices, would automatically disappear. In other words, goods would cease to have an economic value and would become simply physical objects which human beings could use to satisfy some want or other. The disappearance of economic value would mean the end of economic calculation in the sense of calculation in units of value whether measured by money or directly in some unit of labour-time. It would mean that there was no longer any common unit of calculation for making decisions regarding the production of goods.

Socialist production is self-adjusting production for use. It will be a self-regulating , decentralised inter-linked system to provide for a self-sustaining steady-state society. Socialism is self-correcting, from below and not from the top . Planning in socialism is essentially a question of industrial organisation, of organising productive units into a productive system functioning smoothly to supply the useful things which people had indicated they needed, both for their individual and for their collective consumption. What socialism would establish would be a rationalised network of planned links between users and suppliers; between final users and their immediate suppliers, between these latter and their suppliers, and so on down the line to those who extract the raw materials from nature. The responsibility of these industries would be to ensure the supply of a particular kind of product either, in the case of consumer goods, to distribution centres or, in the case of goods used to produce other goods, to productive units or other industries. Planning is indeed central to the idea of socialism, but socialism is the planned, but not Central Planning. Needs would arise in local communities expressed as required quantities such as kilos, tonnes, cubic litres, or whatever, of various materials and quantities of goods. These would then be communicated according to necessity. Each particular part of production would be responding to the material requirements communicated to it through the connected lines of social production. It would be self -regulating because each element of production would be adjusting to the communication of these material requirements. Each part of production would know its position. Stocks of goods held at distribution points would be monitored, their rate of depletion providing vital data about the future demand for such goods, information which will be conveyed to the units producing these goods. The units would, in turn, draw upon the relevant factors of production and the depletion of these would activate yet other production units further back along the production chain. There would thus be a marked degree of automaticity in the way the system operated. A maintenance of a surplus reserve would provide a buffer against unforeseen fluctuations in demand. The regional production units would, in turn, communicate its own manufacturing needs to their own suppliers, and this would extend to world production units extracting and processing the necessary raw materials.

In a society such as capitalism, people's needs are not met and people feel insecure. People tend to acquire and hoard goods because possession provides some security.

Under capitalism, there is a very large industry devoted to creating needs. Capitalism requires consumption, whether it improves our lives or not, and drives us to consume up to, and past, our ability to pay for that consumption. In a system of capitalist competition, there is a built-in tendency to stimulate demand to a maximum extent. Firms need to persuade customers to buy their products or they go out of business. They would not otherwise spend the vast amounts they do spend on advertising.

There is also in capitalist society a tendency for individuals to seek to validate their sense of worth through the accumulation of possessions. The prevailing ideas of society are those of its ruling class so we can understand why, when the wealth of that class so preoccupies the minds of its members, such a notion of status should be so deep-rooted within workers. It is this which helps to underpin the myth of infinite demand. It does not matter how modest one's real needs may be or how easily they may be met; capitalism's "consumer culture" leads one to want more than one may materially need since what the individual desires are to enhance his or her status within this hierarchal culture of consumerism and this is dependent upon acquiring more than others have got. But since others desire the same thing, the economic inequality inherent in a system of competitive capitalism must inevitably generate a pervasive sense of relative deprivation. What this amounts to is a kind of institutionalised envy and an alienated capitalism.

In world socialism, the notion of status based upon the conspicuous consumption of wealth would be devoid of meaning because individuals would stand in equal relation to the means of production and have free access to goods and services. The only way in which individuals can command the esteem of others is through their contribution to society, and the stronger the movement for socialism grows the more will it subvert the prevailing capitalist ethos, in general, and its notion of status, in particular.

But when the requirement for rationing does arise, it is not unsurmountable to devise means that are viewed as democratic and fair and non-circulating.
Lotteries have been suggested. Easiest could be on a first come, first served basis, or special needs can determine priority - the sick or young or old having access to seasonal shortages of food-stuffs that may be in short supply.

But we do also have existing solutions now in capitalism - time-share for the Tahiti paradise huts, car pools for the limos, and who wants to wear diamond necklaces all the time, they could be lent out on demand for those special dress-up occasions just like tool hire does now. Also, would people be too unhappy with substitutes, emerald jewellery or a holiday in the Maldives, instead.

 Some things considered essential nowadays will very quickly be transformed into luxuries, such as tea and coffee since the first thing those estate workers will do is end their back-breaking drudgery in unbearable weather and end the physical hardships by seeking out another life-style and for a time the priority for developing machinery to take over for the raw human muscle power required to grow and harvest tea or coffee will not be the prime priority of society.

Also where health and safety risks of those producers will result in non-production of some goods that we consider necessary in today's world when workers are no longer compelled to labour under dangerous and hazardous conditions. For things that are essential and necessary, job rotation will be required. The 'Dispossessed' by Ursula Le Guin had some form of work conscription that was viewed as a rite of passage for youth and forgetting the politics for the moment, the Americans had the Peace Corps and the Second World War had the Women's Land Army--- who knows what system will be thought up in the future.

We hope that offers an idea of how money is superfluous to satisfying human need.