[OPE] Fw: Charles Bettelheim’s contribution. Is there one?

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----- Original Message ----- 
From: Jurriaan Bendien 
To: ope@lists.csuchico.edu 
Sent: Thursday, June 26, 2008 4:19 PM
Subject: Charles Bettelheim’s contribution. Is there one?

According to Bettelheim, the capitalist character of enterprises was defined by a double separation: the separation of workers from ownership of their means of production which are effectively controlled by managers, and by the separation of the enterprises from each other qua economic decision making. This is more or less a political criterion, and indeed Bettelheim's definition of a socialist economy had less to do with economics, than with who holds power. (Bettelheim 1970, Vol. 2, p. 8).

He argues that when Stalin died, a sort of coup or putsch occurred, and a process of capitalist restoration began, which was completed with the Liberman reforms, in 1965 - at that point, he says, investments were no longer determined by the plan, but by enterprise directors. Thus, the plan was no longer a real plan, but only a guide to market relations. 

He then argues that because markets began to dominate instead of the plan, the operation of the law of value was restored, i.e. the existence of markets is simplistically equated with the existence of the law of value. Effectively, the USSR became a kind of state monopoly capitalism in his opinion. But in the third volume of Class Struggles in the USSR, he even abandoned his idea that the October revolution had ever been a proletarian revolution at all - now he regarded it as a state-capitalist revolution.

But as regards the "double separation" idea, Hillel Ticktin and Ernest Mandel pointed out, that Soviet enterprises were not generally so independent, because they could not independently determine prices, wages, supply sources or who its buyers would be. In addition there was no open labour market, wages were not proportional to performance, and the money earnt from labour was just one way to acquire consumer goods. 

This being the case, I would argue that Bettelheim's argument is inconsistent, and rather dogmatically caricatures all the key concepts involved: planning, markets, law of value, capitalism, socialism, enterprise independence and so forth. In an intellectual tradition which goes back to the apologetic theory of Eugene Preobrazhensky, he falsely counterposes planning and markets, he falsely equates the existence of markets with the operation of the law of value, and he falsely assumes that all markets are one of a kind. I don't think he had much to contribute to the socialist calculation debate, nor did he seem to have any theoretical sense that capitalist calculation might be equally problematic, resulting in the commercial oversupply or undersupply of products. 

The regulative force of the law of value in the sphere of production depends on a generalised, developed and integrated market for its inputs and outputs, i.e. a coherent totality of interlocking price formation mechanisms for the bulk of economic resources produced, so that price variations of products are bounded by quantities of average social labour performed, rather than simply by scarcity, output levels or productive efficiency. 

But prices, wages and profits can exist without any mode of price, wage or profit formation (according to supply and demand forces) characteristic of such a generalised market in which most capital, labour and products/services can be freely traded. 

Prices can exist without freedom to buy and sell in open markets, wages can exist although wage formation is set according to non-market or political criteria, and profit can be an indicator of efficiency or plan overfulfillment. If resources are wasted or losses occur, it does not automatically mean that enterprise go out of business -  they might stay in business for some reason. 

This is a very elementary observation which would be clear to any economic historian acquainted with the real history of market expansion since the 16th century. But it is lacking in most socialist discussion, because it is always assumed that wages, prices and profits are intrinsically always evil and anti-socialist, rather than these things being evaluated according to whether they deliver a better life for all. The corollary is, that in socialist discussion, if there exist wages, prices and profits in an economy, then it must be a capitalist economy of some type, perhaps state capitalist. 

But in the real world there is a broad scala of options and possibilities between pure capitalism and pure socialism, and if we do not seriously consider their advantages and disadvantages, we turn the very possibility of a transition to socialism into a mystery. In addition, many different kinds of socialisms are possible, ranging from utterly despotic to extremely libertarian. 

Arguably this makes the very notion of socialism itself rather vague (which Bettelheim wants to avoid by stipulating definitions), but that is only because the existence of socialism cannot be defined simply in terms of economic categories. The real criteria for progress towards socialism are whether a society allocates resources empirically in a way which is egalitarian, just, sustainable and efficient, and whether it promotes forms of organisation which maximise the opportunities of all individuals for personal development, with effective freedom of choice. 

The central contradiction in socialist transition is not between planning and markets, but between freedom and socio-economic equality, as John Rawls's philosophy already implies. In Rawls's top-up theory of redistributive justice, there is of course room only for market-allocation and state redistribution. But this leaves out reciprocation, i.e. people recognising each other's mutual needs and meeting them directly, on the basis that they know that, with the given organisational framework and forms of association, they are all better off for so doing. 

Encouraging this, is presumably the primary goal of the socialist endeavour, but this does not necessarily have anything to do with any particular economic technique or particular property form - the application of the economic technique or property form is evaluated mainly in terms of whether it does in fact serve that purpose, or whether it conflicts with that purpose. 

This makes the debate a lot more specific, because it asks questions such as, "if you really wanted to create more egalitarian justice now, how would you optimally do it?" or "if you really wanted to maximise freedom for personal development now, how would you technically do it?". It is just that if the majority of the people does not control what the state does, and if the only shared goal a society has is self-enrichment, it is difficult if not impossible to implement the solutions. Because in that case, there is no full participation of the population in politics - the vast majority are excluded from politics and the relationship between rights and duties is ill-defined.

Jurriaan 

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