[OPE] Venezuela and Human Rights Watch

Alejandro

I cannot tell why you disagree with me. It is a know fact capital flight occurred from Cuba and Venezuela - you think you could prevent it, if you provided incentives of some kind?

In modern discourse, the term "dictator" and "dictatorship" are used very loosely to describe a situation in which a leader seems to have a lot of power. It can be a sort of swearword. But I think we ought to inquire at least about what such a dictator is actually able to dictate, in his position. Was Louis Bonaparte a dictator? Was Gorbachev a dictator?

Because I haven't had the opportunity to study Venezuela's economy yet in detail at this moment, I cannot very well critically examine now what is happening there in detail. But surely a lot more is done now to improve ordinary people's lives there than previously? Isn't that progressive? Compared to other Latin American countries, Cuba's economy has done extremely well, even despite trade boycotts and imperialist aggression.

My argument is basically that a socialist-type of society has more options available for resource allocation to serve the needs of the people - but it makes no sense to get rid of markets, if markets do a better job than non-market allocation can (generate more economic justice, efficiency, satisfaction and so forth).

I admit that this is maybe a bit too easy to say, a sort of truism - point is that you may be forced into a particular type of allocation by circumstances, and if you choose certain means of allocation, then you are necessarily committed to other sorts of allocation which are at least compatible with it. Presumably the point of socialist economy would be to generate more effective choices for all, and to generate better human development on a more egalitarian basis, but I am arguing that this can involve a combination of market and non-market methods.

Preobrazhensky suggested that there is a conflict between "state planning" and the "law of value", but what he really means, is that there is a conflict between "allocation by the state authority" and "market allocation".

The first problem with that idea is theoretical/scientific - you cannot simply put an equal sign between planning and the state authority, and you cannot put an equal sign between the law of value and the existence of markets. Only the crudest Marxisms do this.The two "pairs" may conflict, but they may also be compatible, depending on the situation. To say they must always conflict is dogmatic and unrealistic, since no developed capitalist society can even exist without an enormous amount of planning, and a non-market society need not involve centralised planning.

The second problem is political/ideological: Preobrazhensky's theory became a sort of "scientific apology" for the reality that the appropriation of agrarian surplus product, and farmer's surplus labour, had to finance industrialization in the USSR, that was really what the conflict was about. Since farmers were unwilling to sacrifice part of their surplus - it wasn't in their immediate interest - they had to be expropriated, and forcibly turned into wage earners. This was justified among other things by the famines that occurred, but it resulted in low agricultural productivity.

Unfortunately, as I aim to demonstrate in an article I am still in the process of writing, the meaning and implications of the law of value are not well understood by Marxists. Just as economists falsely assume that GDP means "the whole economy", the law of value is thought to regulate "the whole of the capitalist economy". But this is gibberish - it conflates "the capitalist mode of production" with "the capitalist economy".

The law of value can at best only act as a constraint on the price structure of current output of reproducible products of human work, and possibly influences the price structure of related assets to some or other extent. However, at any time there are vastly more prices and assets than those applying to current output of reproducible products, and therefore, the law of value can never "regulate the whole economy". Once this is acknowledged, Preobrazhensky theory falls down.

Contrary to the Marxists, I do not regard the law of value in the Marxian sense as an "equilibrium principle" either - I regard that as a reification. I think that for Marx, bourgeois society owed its equilibrium to the reproduction of the relations of production, meaning ownership relations, work relations and economic relations between producing enterprises, enforced and regulated by state power. These relations are expressed as value relations, which exist quite independently of price relations since in subtstance they refer to a generally accepted economy of labour-time.

According to this interpretation, markets do not constitute equilibrium by themselves - that is a Smithian fiction - all that they can achieve is that monetarily effective supply and demand are adjusted to each other, through incessant price fluctuations and negotiations. The mystery is how a myriad of transactions by individual economic actors could result in a workable modus vivendi of aggregate supply and demand, but the mystery disappears once we consider the physical necessity for people to produce and reproduce their existence, which involves entering into societal relations which exist independently of their volition, and to which they must necessarily adjust their behaviour.

Jurriaan

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Received on Thu Sep 25 13:59:43 2008