Responding to Critics

Abundance and Scarcity

First, we have to define what scarcity is. Orthodox economics argue it is limited supply - versus- boundless demand. Our wants are essentially “infinite” and the resources to meet them, limited claim the economists. Von Mise and Parecon claim that without the guidance of prices socialism would sink into inefficiency. According to the argument, scarcity is an unavoidable fact of life. It applies to any goods where the decision to use a unit of that good entails giving up some other potential use. In other words, whatever one decides to do has an "opportunity cost" — that is the opportunity to do something else which one thereby forgoes; economics is concerned with the allocation of scarce resources. However, in the real world, abundance is not a situation where an infinite amount of every good could be produced. Similarly, scarcity is not the situation which exists in the absence of this impossible total or sheer abundance.

Abundance is a situation where productive resources are sufficient to produce enough wealth to satisfy human needs, while scarcity is a situation where productive resources are insufficient for this purpose. Abundance is a relationship between supply and demand, where the former exceeds the latter. In socialism, a buffer of surplus stock for any particular item, whether a consumer or a producer good, can be produced, to allow for future fluctuations in the demand for that item, and to provide an adequate response time for any necessary adjustments. Thus achieving abundance can be understood as the maintenance of an adequate buffer of stock in the light of extrapolated trends in demand. The relative abundance or scarcity of a good would be indicated by how easy or difficult it was to maintain such an adequate buffer stock in the face of a demand trend (upward, static, or downward). It will thus be possible to choose how to combine different factors for production, and whether to use one rather than another, on the basis of their relative abundance/scarcity.

We are seeking what some call a "steady-state economy" or "zero-growth", a situation where human needs are in balance with the resources needed to satisfy them.

Such a society would have decided on the most appropriate way to allocate resources to meet the needs of its members. This having been done, it would only need to go on repeating this continuously from production period to production period. Production would not be ever-increasing but would be stabilised at the level required to satisfy needs. All that would be produced would be products for consumption and the products needed to replace and repair the raw materials and instruments of production used up in producing these consumer goods. The point about such a situation is that there will no longer be any imperative need to develop productivity, i.e. to cut costs in the sense of using fewer resources; nor will there be the blind pressure to do so that is exerted under capitalism through the market. Technical research would continue and this would no doubt result in costs being able to be saved, but there would be no external pressure to do so or even any need to apply all new productivity enhancing techniques.

In a stable society such as socialism, needs would most likely change relatively slowly. Hence it is reasonable to assume that an efficient system of stock control, registering what individuals actually chose to take under conditions of free access from local distribution centres over a given period, would enable the local distribution committee to estimate what the need for food, drink, clothes and household goods that would be required over a similar future period. Some needs would be able to be met locally: local transport, repairs and some food produce are examples as well as services such as libraries and refuse collection. The local distribution committee would then communicate needs that could not be met locally to the bodies charged with coordinating supplies to local communities.

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.

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. And we can set out a possible way of achieving an eventual zero growth steady state society operating in a stable and ecologically benign way. This could be achieved in three main phases.

First, there would have to be urgent action to relieve the worst problems of food shortages, health care and housing which affect billions of people throughout the world.
Secondly, longer term action to construct means of production and infrastructures such as transport systems for the supply of permanent housing and durable consumption goods. These could be designed in line with conservation principles, which means they would be made to last for a long time, using materials that where possible could be re-cycled and would require minimum maintenance.
Thirdly, with these objectives achieved there could be an eventual fall in production, and society could move into a stable mode. This would achieve a rhythm of daily production in line with daily needs with no significant growth. On this basis, the world community could live in material well being whilst looking after the planet.

Socialism will seek an environmental-friendly relationship with nature. In socialism we would not be bound to use the most labour efficient methods of production. We would be free to select our methods in accordance with a wide range of socially desirable criteria, in particular the vital need to protect the environment. What it means is that we should construct permanent, durable means of production which you don’t constantly innovate. We would use these to produce durable equipment and machinery and durable consumer goods designed to last for a long time, designed for minimum maintenance and made from materials which if necessary can be re-cycled. In this way we would get a minimum loss of materials; once they’ve been extracted and processed they can be used over and over again. It also means that once you’ve achieved satisfactory levels of consumer goods, you don’t insist on producing more and more. Total social production could even be reduced. This will be the opposite of to-day's capitalist system's cheap, shoddy, throw-away goods with its built-in obsolescence, which results in a massive loss and destruction of resources.

We have said above that the most urgent task will be to stop people dying of hunger but the supply of decent housing will require a vastly greater allocation of labour than any necessary increase in food production. This means that a great surge of required materials and equipment will flow through the units producing building supplies. A structure of housing production that is generally adjusted to the market for housing under capitalism, which is what people in socialism would inherit, will in no way be able to cope with a demand for housing based on need. So, within the wider context of a democratically decided housing policy, in which questions of planning and the environment would have been taken into account, the job of implementing housing decisions would eventually pass to the committees or works councils throughout the construction industry.

We see the technological perfection in modern society – automation. And we see also a productive apparatus capable of producing more than sufficiency for all. The age-long problem facing man – production – has been solved. The very evolution of capitalism itself has solved the problem of production. The material conditions are now ripe for the establishment of Socialism. The " World of Abundance" referred to by socialists has never referred to the open-ended consumerism encouraged by the advertisers but has rather as its target a stable and more satisfying way of life in which the scramble to accrue things is no longer central. With material survival removed from the marketplace by the abolition of commodity production we can expect that individuals will calm down their acquisitive desires and pursue more satisfying activities.

For socialism to be established, there are two fundamental preconditions that must be met. Firstly, the productive potential of society must have been developed to the point where, generally speaking, we can produce enough for all. This is not now a problem as we have long since reached this point. Secondly, the establishment of socialism presupposes the existence of a mass socialist movement and a profound change in social outlook.

When we propose different scales of social co-operation such as local, regional and world scales, this is not a question of there being a hierarchy with power located at any central point. What we anticipate is both an integrated and flexible system of democratic organisation which could be adapted for action to solve any problem in any of these scales. This simply takes into account that some problems and the action to solve them arise from local issues and this also extends to the regional and world spheres. Crucial to the question of democracy is not just the ability to make decisions about what to do but also the powers of action to carry out those decisions. But with the abolition of the market system, communities in socialism will not only be able to make free and democratic decisions about what needs to be done they will also be free to use their resources to achieve those aims. Problems are not solved with money resources. They are solved by people using their labour, skills and the necessary materials and there is in fact an abundance of these material resources. But it will take the relations of common ownership to release them for the needs of communities and this will also mean that communities will be free to decide democratically how best to use those resources.

If people didn’t work then society would obviously fall apart.
If people want too much? In a socialist society "too much" can only mean "more than is sustainably produced."
If people decide that they (individually and as a society) need to over-consume then socialism cannot possibly work.
This does require that we appreciate what is meant by "enough"

To establish socialism the vast majority must consciously decide that they want socialism and that they are prepared to work in socialist society. The establishment of socialism presupposes the existence of a mass socialist movement and a profound change in social outlook. It is simply not reasonable to suppose that the desire for socialism on such a large scale, and the conscious understanding of what it entails on the part of all concerned, would not influence the way people behaved in socialism and towards each other. Would they want to jeopardise the new society they had helped create? We think not. If people cannot change their behaviour and take control and responsibility for their decisions , socialism will fail.

Free-access socialists strive to create a society where people have accepted socially mutual obligations and the realisation of universal interdependency and we understand that this would profoundly affect people’s choices, perceptions, conceptualizations, attitudes, and greatly influence their behaviour, economically or otherwise.

We will use the tools and systems that capitalism bequeathes us, which will be suitably modified and adapted and transformed for the new conditions. There are countless professional and trade associalitions and marketing boards and government departments which have the research and diagnostic tools available , not to mention the trade union movement . All those bodies may be at present based on commerce but can be quite easily democratised , socialised and integrated organisationally .

Stock or inventory control systems employing calculation in kind are, as suggested earlier, absolutely indispensable to any kind of modern production system. While it is true that they operate within a price environment today, that is not the same thing as saying they need such an environment in order to operate. The key to good stock management is the stock turnover rate – how rapidly stock is removed from the shelves – and the point at which it may need to be re-ordered. This will also be affected by considerations such as lead times – how long it takes for fresh stock to arrive – and the need to anticipate possible changes in demand. The Just- In- Time systems are another well tried and trusted method of warehousing and linking up supply chains which can be utilised .

Then there will be the existence of buffer stocks to provides for a period of re-adjustment. It may be argued that this overlooks the problem of opportunity costs . For example, if the supplier of baked beans orders more tin plate from the manufacturers of tin plate then that will mean other uses for this material being deprived by that amount. However, it must be born in mind in the first place that the systematic overproduction of goods – i.e. a buffer stock – applies to all goods, consumption goods as well as production goods. So increased demand from one consumer/producer, need not necessarily entail a cut in supply to another or at least, not immediately. The existence of buffer stocks provides for a period of re-adjustment. Another point that this argument overlooks the possibility of there being alternative suppliers of this material or indeed, for that matter, more readily available substitutes for containers (say, paper rather than plastic).

Some kind of “points system” might be used to evaluate different projects facing society - cost-benefit analysis which is not dependant upon dollars and cents calculations .Under capitalism the balance sheet of the relevant benefits and costs advantages and disadvantages of a particular scheme or rival schemes is drawn up in money terms , but in socialism a points system for attributing relative importance to the various relevant considerations could be used instead. The points attributed to these considerations would be subjective, in the sense that this would depend on a deliberate social decision rather than on some objective standard. In the sense that one of the aims of socialism is precisely to rescue humankind from the capitalist fixation with production time/money, cost-benefit type analyses, as a means of taking into account other factors, could therefore be said to be more appropriate for use in socialism than under capitalism. Using points systems to attribute relative importance in this way would not be to recreate some universal unit of evaluation and calculation, but simply to employ a technique to facilitate decision-making in particular concrete cases. The advantages /disadvantages and even the points attributed to them can, and normally would, differ from case to case. So what we are talking about is not a new abstract universal unit of measurement to replace money and economic value but one technique among others for reaching rational decisions in a society where the criterion of rationality is human welfare.

There is the “Law of the Minimum” which was formulated by the agricultural chemist, Justus von Liebig in the 19th century. Liebig’s Law can be applied equally to the problem of resource allocation in any economy.For any given bundle of factors required to produce a given good, one of these will be the limiting factor. That is to say, the output of this good will be restricted by the availability of the factor in question constituting the limiting factor. All things being equal, it makes sense from an economic point of view to economise most on those things that are scarcest and to make the greatest use of those things that are abundant.

Priorities can be determined by applying Maslow’s “Hierarchy of Needs” as a guide. It would seem reasonable to suppose that needs that were most pressing and upon which the satisfaction of other needs are dependant would take priority over those other needs. We are talking here about our basic physiological needs for food, water, adequate sanitation and housing and so on. This would be reflected in the allocation of resources: high priority end goals would take precedence over low priority end goals where resources common to both are revealed (via the self-regulating system of stock control) to be in short supply.

To ensure the smooth functioning of the system, statistical offices ( and those exist now in a variety of forms ) would provide estimates of what would have to be produced to meet peoples likely individual and collective needs. These could be calculated in the light of consumer wants as indicated by returns from local distribution committees and of technical data (productive capacity, production methods, productivity, etc) incorporated in input-output tables. For, at any given level of technology (reflected in the input-output tables), a given mix of final goods (consumer wants) requires for its production a given mix of intermediate goods and raw materials; it is this latter mix that statistical offices would be calculating . Such calculations would also indicate whether or not productive capacity would need to be expanded and in what branches. The centres would be essentially an information clearing house, processing information communicated to it about production and distribution and passing on the results to industries for them to draw up their production plans so as to be in a position to meet the requests for their products coming from other industries and from local communities.

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.Each part of of production would know its position . If requirements are low in relation to a build-up of stock , then this would an automatic indication to a production unit that its production should be reduced . The supply of some needs will take place within the local community and in these cases production would not extent beyond this , as for example with local food production for local consumption .Other needs could be communicated as required things to the regional organisation of production. Regional manufacture would produce and assemble required goods for distribution to local communities .

The socialist economy is not a command economy but a responsive one to provide for a self -sustaining steady state society. There would be a marked degree of automaticity in the way the system operated. What decisions that may be required will be made at different levels of organisation: global, regional and local but with the bulk of decision-making being made at the local level.