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Paul Cockshott Interview, Part 4: Towards a New Socialism – Worker Control in Democratic Central Planning

Editor’s note: discussion topics include what worker self-management is, the division of labour, how to overcome rule by the professional-managerial class, whether the Towards a New Socialism model (TNS) can fulfil aspirations for worker self-management, innovation and product development, the managerial structure of a project in TNS, hiring and firing in TNS, employment, and strategic planning.

[After The OligarchyHello fellow democrats, futurists, and problem-solvers, this is After The Oligarchy. Today I’m speaking with Dr. Paul Cockshott again.

Paul Cockshott is a computer engineer, Marxist economist, and author of several books, but today I’m interviewing him as co-originator with Allin Cottrell of the post-capitalist model first presented in the book Towards a New Socialism published in 1993.

Today’s conversation is in association with mέta: the Centre for Postcapitalist Civilisation.

This is the fourth in a series of interviews with Dr. Cockshott about Towards a New Socialism, make sure to watch the other interviews. Today we’ll be discussing some more advanced questions about Towards a New Socialism, so I recommend you read the book to understand what we’re talking about. It’s still in print and there’s free PDF available online which I’ll put in the description.

So, Paul Cockshott thank you very much for joining me again.

[Paul Cockshott] Hi.

[ATO] Today we’re going to talk about worker self-management. We’re going to talk about the relation between the centre and the periphery, or projects, in central planning and in socialism in general.

And how this started was – for viewers, to give context – is that I put a quote to Paul Cockshott from a book that was published by Robin Hahnel, who is co-originator of Participatory Economics and wrote a book called Democratic Economic Planning recently. And I read a quote which was making some criticisms of central planning on the basis that it was incompatible with worker self-management. And then we talked about that briefly, but we didn’t get a chance to go into it fully so that’s what we’re going to do now. So, since then I’ve had an interview with Robin Hahnel about this topic and Dr. Cockshott has seen that as well.

I made the same kind of preamble when talking to Robin Hahnel, just for viewers, that I’m just going to ask you to approach this with an attitude of curiosity and problem solving. That this isn’t about clinging to whatever political identities which we’ve decided that we have and trying to win a debate or score points. It’s about trying to create a better world, and in doing that to honestly look at these problems. I know that that’s how Robin Hahnel approaches this, I know that is how Paul Cockshott approaches this, and I’m just asking you, the audience, to approach it like that as well.

So, before I ask you specific questions are there any initial remarks you’d like to make in response to that interview that I did with Robin Hahnel?

[PC] I think it’ll all come up in the questions you ask.

[ATO] Okay I’d like to begin with a framing question, a general question, which is what in your view is worker self-management? Why is it important? And how is it achieved, how can it be achieved in a society?

[PC] Well it’s fundamentally a question of overcoming the division between mental and manual labour, between those who tell people what to do and those who actually do it. And that is an old basis of class hierarchy going back to the early stages of class society. And in a modern society it takes the form of less educated people being told what to do by more educated people generally. Or in some cases there may be no difference in educational level but people have a managerial authority which enables them to say what’s going to be done.

And this has the disadvantage that the ideas and initiative of people who don’t have the mark of authority and which could improve the operation of systems, whether it’s healthcare systems or industrial production systems, and their knowledge is disregarded or down-valued compared to the knowledge of those who are put in authority.

Overcoming this requires the sorts of struggles that were partially worked out during the cultural revolution in China. They didn’t end up with forms of organization that were stable to deal with that. But the issues that were being raised were relevant, and these will certainly still be a big issue in any society where you’re having radical socialist change. The issue of how do you get people who are initially educated members of the upper middle class, the professional managerial class, who have certain skills which are necessary for society but they have their own class interest. They have their interest in maintaining a higher social status, and a higher income and authority over other people. So, it’s the issue of how do you get people who are both read an expert and how do you ensure that those who may not initially ideologically support socialism will still work for the common good.

Now to the extent over time where there’s a radical improvement in educational levels and equalization of educational opportunity, that kind of issue may become less important to some extent. But given that in a market economy those with qualifications tend systematically to have a higher income and towards the upper end of that there are people who aren’t actually exploited, they’re either receiving something roughly equivalent to the labour they put in, or actually receiving part of the labour that others put in. This means that what is in the West the professional managerial class, there’s an interest in becoming a professional managerial class in a socialist economy. And they will push for the increase in their power and their authority. So, it’s basically a question of class interest. Class interest mediated through educational privilege.

[ATO] Okay let’s go into this further by moving into the next question. This is about specifically now Towards a New Socialism. In Towards a New Socialism, there’s a comprehensive plan for the production of the entire economy. And this plan is set by a planning bureau, which is overseen politically by a randomly selected body from the general population. And production is accomplished by projects, which we might think of as enterprises but they’re not exactly the same. And the projects implement the plan.
So, what decisions do workers in a project have control over? And what decisions do workers in a project not have control over?

[PC] Well, let’s take an example where these social relations to an extent already exist, in terms of the production not being enterprise-based in like in the British National Health Service. In that case a hospital is equivalent to a project. Now, over time from the 1980s onwards running of hospitals was increasingly professionalized and handed over to a professional managerial elite, who are distinct from the medical staff and ancillary workers who actually provide the care.

And there was a scandal recently. You’re in Ireland, you may not have seen it. There was a scandal associated with Shrewsbury Maternity Hospital, where there was a very large number of excess neonatal deaths – or babies delivered with brain damage and other injuries. Now, in pursuing what caused that, the inquiry found that it was a managerial policy to set a target to reduce the number of caesarean sections. This was not something that was arrived at by the obstetricians or the midwives, it was a target set by professional managers. By having it set by professional managers they were overriding the clinical judgment of the medical professionals and the result was clearly proven to be deleterious for the mothers and the babies.

If the management of hospitals was made up, or policy was set, by a committee drawn from the different sections of the medical and ancillary staff that worked there, that kind of policy would not have been arrived at. Now, exactly how the supervisory board would be formed, there’s room for discussion on that. Whether it be elected, chosen by a lot, by quotas, or what. Had it been based on the people who actually were delivering the care, the policies would have been different. And these are policies related to how to treat the patients. What practices should be pursued.

Now, in terms of the resources available to it, a National Health Service hospital is entirely dependent on public resources. It’s entirely dependent on public funds to meet the the salaries of the workers there, and it’s entirely dependent on public funds to build, maintain, etc, the hospitals. So any internal democratic control in a National Health Service hospital is going to be within the constraints set by the local health board which provides the funding to it. And more generally, within the national budget that allocates a certain amount to health care as a proportion of national income.

So there is certainly room for democratic control and there’s room for replacing the professional managerial class with decisions taken by people who actually do the productive work. But it shouldn’t be seen as a matter of autonomy of the unit relative to society. It’s a question of internal class relations.

[ATO] Okay so me let me ask a more pointed question. If I had to summarize, I think Hahnel’s chief concern was that in central planning – and he said multiple times that Towards a New Socialism is the most democratic version possible – that ultimately an enterprise or project produces is determined by the planning bureau, by a central authority. Even if even if it’s very democratically constituted and regulated. The point that he’s making is that there would be room for some amount of control by the workers in a workplace, but that the production outputs and the production inputs would be set externally. So, is that the case in Towards a New Socialism?

[PC] Well, you have to have to look at what different kinds of organizations you’re talking about.

If we take a hospital again, it is not necessarily appropriate for one hospital to decide whether they’re going to have a specialist oncology unit in that hospital; or whether it would be better at the level of a city for it to be decided which hospital would have the specialist oncology unit, which hospital would might specialize in stroke rehabilitation, etc. So, to an extent, yes. The output they’re producing is likely to be decided at a higher level insofar as to do that they’re requiring public funds or public resources which have to be used in the most efficient way. Now there’s certainly a room for debate at the district level. For people to debate do you want to have specialist hospitals or do you want general hospitals.

Let’s take another economic activity like electricity generation. Whether electricity generation is going to be achieved using coal, natural gas, nuclear power, or wind, let’s say, those are not decisions which can be taken by the workers at an individual power station. These are questions of national strategy and they’re questions which require huge public investment to carry them out. The transformation of the economy that’s going to be necessary to shift from fossil capitalism to a non-fossil fuelled socialist economy is huge, and it’s not a matter of the individual workers in in one unit of production having a say on that.

Now, it’s certainly the case that workers in, for example, the electrical generator fabricating industry have an interest in having a say in and debating what kind of plants are going to be built, because that has a direct bearing on their future life and future opportunities. And back in the 70s, along with other people from the Conference of Socialist Economists, I worked with the shop stewards at Trafford Park plant on a workers plan for the power industry, advocating in the 70s but it diversified, built next generation nuclear power plants, that tidal power was put into operation, etc. And that was in in response to the specific crisis that was facing the workers in the electrical power generation sector. It could only be achieved, though, to the extent that the workers in the electrical power generation sector were able to influence the then Labour government to actually order new power plants and start new power plants. So it cannot be a matter of decision just by the workers in one sector. They can lobby for it but the critical decisions are going to come from the allocation of public funds which … I say public funds but I mean the public allocation of the labour force of society.

[ATO] So, this is a question that I put to Robin Hahnel, and I raised the case of forms of production, of enterprises, which one might say are particularly important, particularly strategic, essential. Healthcare and energy were actually the two examples that I raised. And asked the question whether it suffices for a worker council governing, for example, a hospital (or the examples that you gave) to have complete control over what’s produced? And really shouldn’t there be a way that society as a whole can determine that?

On the other hand, it’s the case that those are enterprises, or forms of production, which are of a certain class. They are are things which are life or death in the case of health care and climate change, or they’re very strategic and they involve massive investment. But there are other types of production, for example, I was just thinking off the top of my head, I’m always talking about a furniture factory as an example, or say a gym, or a supermarket, or we could list many other forms of activity. And we’d say well these are not as strategic, or not as essential, or not as large scale. And so the question there is, for example, is it appropriate for the production activities of a gym, say, to be determined entirely by a central plan? As in, all of the things that the gym is going to produce, in terms of what classes they offer, or what facilities they have; and what they use to do that, what inputs, labour, and machinery, and so forth.

[PC] There’s no reason why something like that has to be decided centrally. In practice what’s going to be doable is you’ve got a certain number of instructors available, or a certain number of clubs that want to use the facility. These clubs may well have individuals who do a lot of the teaching. But I don’t see why that requires any particular planning beyond the resources that go into it. The actual operation of a gym can be largely left to, you know, the taekwondo club, the basketball club, etc, that are actually using the gym on different days.

[ATO] Can I ask this as a clarifying question then? Just so we can understand the mechanics of Towards a New Socialism better. So, presumably then workers in a project can formulate and submit a production proposal for that project to the planning bureau?

[PC] That’s the only way the planning bureau is going to … well no it’s not the only way … I mean, once a project has been running for a while the only way that they will know of, for instance, a new product is likely to be a suggestion from there. But that’s not necessarily the case, it may be that ideas for new products come from research and development organizations. But the problem with having it done entirely by separate research and development organizations is that the transition process to production doesn’t necessarily go that well, and the step between prototype and mass-produced product may not go so well. So, there’s a lot to be said for the having a close integration between the design process and the production units.

But in some cases the ideas for what’s going to be done definitely have to come from outside. This is most obvious when you’re setting up entirely new industries like nuclear power. But any entirely new industry, either new to the country or new to the world, where it involves innovation is likely to involve an idea of what the product is going to be that’s agreed at a higher level. And then a whole set of lower-level things become necessary.

So, if you decide that you’re going to move to electric buses, that is a higher-level decision and the bus factories all have to shift to doing that. And entirely new industries have to be created, you have to have mega factories turning out lithium-ion batteries. Or it may be decided that lithium is to strategically too expensive and you’re going to put the effort into the sodium batteries. But in either case these are higher-level technological shape decisions which are being taken. And, to that extent, the fact that a lithium battery factory is going to be making lithium batteries or it’s going to be making sodium batteries, that’s a higher-level decision.

And it might be something that the people in the factory can decide, ‘okay, we reckon we could shift to making sodium batteries from lithium batteries.’ But they can only do that on the basis of scientific research which is probably carried out outside, which is part of the general world achievement of scientific advance. And it always requires considerable resources to convert a scientific advance into initially a prototype and then a manufacturable prototype. So that the society has to have some way of allocating resources, preferably close to the production units, for them to change and update their products.

But in this they’re relying on outside sources of resources. It’s relying on funding, in the end out of general taxation, to allow the factory to have, say, 10% extra people who are tasked with developing types of batteries and types of battery production which are not yet in in place. And that is not socially necessary labour in terms of the current product. It’s surplus labour, surplus to what’s socially necessary. And it’s an allocation of surplus labour that’s being made from the point of view of society in planning for the future.

[ATO] It’s basically an investment.

[PC] It’s not an investment. Investment is a subcategory of an allocation of surplus labour, but  an investment is an allocation of surplus labour with a view to making a profit.

[ATO] Sure, I suppose. Okay I agree it’s not really investment. I more mean it’s labour that’s being directed towards an activity which is not going to produce something, it’s going to increase production in the future.

[PC] It’s going to open up possibilities in the future, you don’t know whether it actually will increase production in the future.

[ATO] Sure, that’s fair enough. Okay so.

[Sponsorship] This video is sponsored by ISINK the Irish Strategic Institute for National Ka-blamo!

With the Russian invasion of Ukraine these are dangerous times. And everybody who isn’t a naïve, hippie, Marxist, idiot, living in the past, knows that the Republic of Ireland needs to grow up and end its policy of neutrality. All proper countries spend loads of dosh feeding the dogs of war, and Ireland should do that too if it’s going to defend itself from … Russia … all right, who although they have no geopolitical motive or plausible means to attack Ireland remain an imminent threat. Also China who are tunnelling through the Earth’s core as we speak.

For too long Irish politicians have not had the benefit of hiding behind the words ‘support our troops’, and while bribes from the military industrial complex have been forthcoming, our leaders deserve more. For too long middle-class citizens at dinner parties have endured the humiliation of not being able to boast of Irish uniforms routinely massacring foreigners.

Let’s face it, Ireland’s neutrality is a bit like people who ‘only smoke socially’, sending Irish troops to Afghanistan, Mali, and Chad, and even turning Shannon airport into a de facto U.S. military base. So we might as well start smoking 20 John Player Blue.

Now, you might be thinking ‘isn’t of Ireland still occupied by the British state?’. ‘What about the security risk of Ireland’s de facto military alliance with the United States?’. [laughter] No offense but that’s why I work for a think tank.

Anyway, that is why Ireland must join NATO post-haste. By joining the most belligerent military bloc in modern history we will make the world a better place, and make Ireland safer at the same time by making all of NATO’s enemies Ireland’s enemies.

Ireland needs to pull its weight, clean its room, and finish its homework. Housing and hospital beds can wait. We need to buy jet fighters and a handful of light ships from the Americans and Germans. This will strike fear in the heart of our enemies, like Guernsey and the Maldives.

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Okay guys, you heard them, the Ka-blamo! Institute is offering a free handheld tactical nuke to one lucky viewer who can answer this question: does NATO Supreme Allied Commander Europe General Tod D. Walters like pineapple on pizza? Make sure to Like and Subscribe for the chance to win that nuke. Now back to the show.

[ATO] So just before we get into our topic which is worker self-management, balancing autonomy of production units with the social interest, and so forth, just a couple things. So, the first is that you were saying that you’re actually writing a new book about planning. Do you want to say a few words about what that is?

[PC] We were approached by a publisher, Repeater Books actually, and were approached by them a year and a bit ago to write a new book. It’s Allin Cottrell, me, and Philipp Dapprich writing it. And they wanted a book on planning that was at a bit more technical level than the stuff in Towards a New Socialism, but we have situated in the context of … Economic Planning in an Age of Climate Crisis we’re calling it, because we think that the necessity to adapt to the climate crisis is something which will force countries to start carrying out economic planning. Because there’s no other means of doing it. The need to adapt to the climate crisis is not something that is expressed through the market, it’s an existential question that operates beyond the market and requires conscious political direction. And as such it forces the economies whether they want it or not to try and grapple with the issues of economic planning.

[ATO] That sounds very interesting. You’re saying the title, at least provisionally, is Economic Planning in an Age of Climate Crisis. And when could we expect that to come out, roughly? I know that these things aren’t certain.

[PC] It’s been with the publishers in one form or another for some months. They now seem to be pushing ahead with it.

[ATO] Okay so maybe sometime this year?

[PC] I would expect so. Yes, I’d expect so.

[ATO] Great and I will check in with you at some point later yeah and …

[PC] Well, when it comes out you can read it and ask questions.

[ATO] Great, I definitely will. I’ll make sure that I get the first copy.

[PC] While I’m plugging, we’re doing another book on materialism. But in this case the authors are myself, Greg Michelson, and Katerina Kolosova, the Macedonian philosopher.

[ATO] And is that also due to come out sometime this year?

[PC] Well, we’re trying to get a publisher to agree to take that one. We’ll have finished writing it by the summer.

[ATO] Okay, very good. That sounds very interesting. I’m just going to say one thing quickly and then we’ll get into the interview questions. You just you mentioned Philipp Dapprich, and I finally got around to talking with him. I’ll be talking with him tomorrow about his work on opportunity costs values and all that, so thank you for putting me in his direction.

[PC] Well he writes about that in our joint book on planning.

[ATO] Excellent. Okay, let’s go forward. So last time we were talking about basically how do we find a balance in a socialist economy between the social interest – the interests of society as a whole – and sub units of the economy – so, projects and workers.

Let’s look at the managerial structure of a project in Towards a New Socialism. Because you were talking about the class struggle of trying to prevent a professional managerial class or coordinator class from taking over. So what would be the managerial structure of a typical project? And I’m sure it would vary.

[PC] Well it’s going to depend on the size and scale of the thing you’re dealing with. If it is a national airline, it’s a somewhat different matter from a school, or a hospital, or even at a lower level the examples you were asking me about were cafes and restaurants and things.

Now, when you were asking about the cafes and restaurants there was a sort of implicit assumption, I think, that these are like the ones that we’re used to. Models of cafes and restaurants where they’re small private businesses. You’re used to cafes and restaurants that are small private businesses but that’s obviously not what all of them are. The most successful ones are things like McDonald’s, which are huge enterprises with coordinated production and planned production, planned delivery of everything, and planned right down to the smallest detail of what goes into each type of burger, and the amount of work that’s required to do them, what means of production are used, etc. So you don’t have to assume that restaurants are going to be small self-sufficient things. They may be restaurant chains still.

Or, I mean, in an experience I had going to Soviet bloc countries some of the restaurants were, for example, people went to eat at a particular collective farm because the canteen at the collective farm was reckoned to be good. And if you were driving through that part of Bulgaria, you’d stop off at the collective farm and eat at their canteen. And in other cases, the restaurants would belong to the municipality. There’d be a whole bunch of restaurants in the town but they’d all belong to the municipality. The contents of the menus were highly specified, so if you were buying a meal it specified how many grams of fish, 150 grams of fish, etc, were in it. So that was a regulation from the point of view of guaranteeing the standards that the consumer was going to get. And the prices were controlled as well.

So you don’t have to assume that things will work the way we’re used to them working. There are lots of other models.

[AO] Sure. That’s interesting.

[PC] Now, I don’t know how the collective farm canteen was run, how they decided what they were going to cook. But let’s take a large thing like Airbus, where it’s a big employer. It’s a big employer across Europe. If Europe becomes socialist that will continue, Airbus will continue designing and developing aircraft, because it may become something that is under the control of the workers in the Airbus industry. But the fact that it is a collective labourer, it is a large group of people working together, each playing a part in it to collectively produce something vast, something bigger than any individual can comprehend, is going to stay the case.

The question then is how do you remove, on the one hand, the exploitative relationship between the owners of Airbus and the people who work in it; and, on the other hand, that the existing exploitative relationship means that you’re in a society where you have a class hierarchy, and within that you have a managerial hierarchy, and the managerial hierarchy ultimately derives its authority from the right to hire and fire. Now, if you’ve got a socialist economy, and you effectively have full employment and everyone is guaranteed a job, then the right to hire and fire is not going to be a significant factor.

[ATO] Can we talk about that then? Because that’s actually a question so that’s a very natural segue into that question. In Towards a New Socialism, workers are guaranteed employment, but not necessarily guaranteed a job at a particular project. But they are guaranteed a job. And this is presumably to balance the goal of full employment, which is extremely important, with the goal of avoiding apathy, cynicism, and inefficiency at the workplace.

[PC] But also to ensure that you have an economy that can adapt to changing requirements. I mean, as technology changes certain industries become less important others become more important and people have to move between them.

[ATO] Yes, that’s a very good point. So, in that case, how are hirings and firings handled? Who in a project decides to hire or fire someone?

[PC] Well, this is not something that we have written about enough. But if you take what I say now as being my personal opinion, not something that I’ve agreed with Allin Cottrell.

[ATO] Sure, okay.

[PC] The overriding issue is the labour budget that a project has. That the society has to allocate social labour power and it does that in two ways. It does it by allocating direct labour and embodied labour. The society has to check on the efficiency of the ways things are being done.

[ATO] Can I just clarify for viewers? You’re saying embodied labour …

[PC] In raw materials, embodied labour in the form of raw materials, buildings, plant, and equipment.

[ATO] Yeah. That’s labour that in the past has been put into creating or transforming these things. And direct labour is somebody actually turning up to work and labouring to do something.

[PC] Yes. Both of these are social resources which can potentially be used for other things. And the building that is being used to make one product at the moment might be allocated to a different use in the future. And the people who are doing it might end up doing something different in the future. And in a dynamic economy that’ll happen relatively often. The more dynamic the economy the more often people move to do new things, and during the dynamic years of the Soviet economy there were lots of people moving to new jobs in new places.

Now, how would people get jobs? Well I would imagine that’ll come through jobs being advertised online by some national register of what kind of jobs there are, and people can apply for them and it’s up to the collective that you’re going to work with how they choose people. There’d have to be some national standards to prevent systematic bias of any sort, they couldn’t just select men for interview and things like that.

[ATO] Yes, of course.

[PC] So it can’t be an entirely autonomous business of that collective.

Now, the issue becomes more difficult if there’s a labour shortage in the economy, and some line of activity has to be shrunk in order to enable something else to grow. Under those circumstances, at the level of a plan what you’re doing is you draw up a plan and say ‘how many workers can we afford to have still working in the retail sector if we’re going to have to build 10 gigawatts a year of new power stations?’ and ‘if we’re building 10 gigawatts of new power stations a year how many more building workers do we need, how many engineering workers do we need, etc?’. This gives requirements of how many jobs are going to be in that and when you balance it out certain sectors have got to be shrunk.

Suppose it’s the retail sector that’s being shrunk and there is a retail collective has taken over, let’s say, ASDA. And then the collective which, let’s say, is called the Northern Red Banner collective now and that’s on all the ASDA shops, they’re told ‘okay, I’m afraid we can’t run so many stores. We don’t have enough people in this area, we need more people working in engineering, we’re going to reduce the total labour budget that the Red Banner supermarket chain can have.’ It’s then up to the people within the Red Banner supermarket chain how they’re going to do that. Who’s going to leave? Who wants to retrain as a precision engineer? Etc. But it’s up to them to decide how to do it. They just said ‘okay, a year from now, the state plan will only allocate a certain number of people to you. You can decide who those people are going to be, and anyone you don’t decide is going to be reallocated to another activity.’

Now this is not so far different from what happens within a large firm. A big multinational allocates people to development projects. From my experience in a big computer company back in the 1970s, there were projects to which people were allocated for a year or two to develop something and then you’d be allocated to something else. You didn’t have any particular say over that, but there’s no particular reason why this couldn’t be done with people having a say over it.

[ATO] Rather than having a kind of hierarchical, managerial, process determining that you could have a participatory, democratic, process determining that.

[PC] Yeah.

[ATO] Where it’s the collective, rather than being some manager’s prerogative.

[PC] I mean, this is the point where Hahnel was saying ‘oh you could only have central planning if you appoint a manager to do it’. No that’s not the case. You can do it through a labour budget. This collective has a certain budget of a certain number of people, the people can either be direct workers or you can use the labour budget in terms of indirect labour, or products you’re using, and it’s up to you to decide how to do it.

[ATO] What it sounds to me you’re describing is there is effectively a worker council which, say, is running ASDA let’s say – which if people don’t know, that’s a supermarket chain. And what’s happening there in terms of hiring and firing is that they’re operating within a context, in a system, so there are external boundaries and parameters. In this case, say, on labour. And within that context they have autonomy or control over how they want to do that.

[PC] Yes. It’s essentially budgetary control, but demystified budgetary control. Budgetary control with the fetishism taken out, because it’s dealing with what budgets are really about which is ultimately about human time.

[ATO] I’m thinking that in every in every system … If we think about market socialism, so let’s say Varoufakis’ model Another Now, if we think about Participatory Economics, and if we think about Towards a New Socialism, in every system their production units have some kind of external constraint. There has to be by definition. In a market socialist system, it’s basically your ability to buy and sell goods on a market, and acquire capital, and so forth. In a participatory economy it is your engagement with the planning process, and the indicative prices that are generated through this balancing supply and demand of production proposals and consumption proposals. This generates prices for inputs and outputs and then the worker council can do whatever they want within that those constraints effectively. And then in Towards a New Socialism it’s similar enough, in my mind, to participatory economics in the sense that again there’s an external process. So this time rather than that being the planning procedure in participatory economics it’s a different kind of planning procedure, but that will set the external constraints and then a worker council can make their decisions within that.

[PC] I mean, yes. For example, if you’re Airbus if you’re developing a new aircraft, it’s maybe 10 years before the from the start of the project to developing it. So during that period the workers who are working on the new thing are being paid by the public. The public has to have decided that they want to invest so many hundred thousand worker years in developing a new airliner. At the same time, the planned environmental constraints will say this airliner is going to have to operate with liquid hydrogen and it’s got to have a certain range. They will be met with constraints which are partly from national resources, partly due to environment, partly due to the range that the airlines say they need, etc. And they’ve got to meet that that specification. How they do it, and how they design it, is up to them, because the planning authorities don’t have the knowledge for that.

[ATO] So back to this question of hiring firing, we can just talk about this for a few minutes and then we’ll leave it there and we’ll pick up again. Speaking of external constraints, we can stick within your time constraints. Let’s think of a situation where there emerges a kind of political struggle or a labour struggle. I suppose in the case you’re talking about, say, reducing 10 percent of the labour in a certain project because whatever way the planning process has occurred it’s been determined that it would be a better use of society’s productive capacity for that labour to be allocated to another project. Like you were saying, from retail to power generation. And so the obvious thing to think of is okay well what if the workers in that project think ‘well I don’t want to. I’m happy where I am’. And we can think of different versions of this, but I know that there are going to be a lot of socialists who are wary of central planning and it’s precisely this kind of thing they might be thinking of. I’m just interested to see how you would respond to that.

[PC] Well, if society is going to adapt, people have to move. How do you do that? Well if you’ve got a system based on labour budgets, the collective is only allowed to employ a certain number of people. Only a certain number of people are allowed to be working for it. They can nominate who those people are going to be if they want, and once they’ve nominated who those people are going to be if someone who they haven’t nominated wants to go on working there they’re not going to be credited with any labour credits. Because they’re not doing something that’s socially necessary. So, you could stay on but you’re not going to get an income. You don’t have the personal privilege of being supported by society to do something which isn’t necessary.

[ATO] One way to a worker council could resolve that which is something that many cooperatives have done, say, during economic crisis is that you just reduce hours and you spread out the work. Wait, no. Actually, no you can’t do that because this is transferring labour.

[PC] The problem is a shortage of labour.

[ATO] Yeah.

[PC] You’re dealing with the opposite situation which is a capitalist recession. You don’t get that in socialist economies. Socialist economies are tight, they’re resource constrained.

[ATO] Yes exactly. A certain number of people do actually have to move. So it’s a matter of trying to figure out who’s most willing to move. I mean, say if we compare this to – if we just forget participatory economics for a second – a market system. You were talking about fetishism of budgets and it’s interesting to think about. Often a market system is presented as a model of decentralization and autonomy, and to a certain extent it is depending how you look at it. But there is always that process that you’re existing within, which is the system of market prices and exchange. And just because there isn’t a kind of political direction saying your labour budget is reduced doesn’t mean that there isn’t an algorithm which is not under your control, which is deciding how much labour that you can use. And it is important for people to keep in mind there’s always an algorithm or a process.

[PC] Yes.

[ATO] That production users are existing within and it’s a matter of picking the one that we think is the best.

[PC] But the problem is that if you leave it to a market system you can’t guarantee full employment. There’s no reason why a system of independent cooperatives should ensure full employment.

[ATO] That is correct, with the caveat that with state intervention there can be full employment. But the market itself, the private sector, cannot necessarily. There’s no reason economical, historical, or otherwise, that the private sector will generate full employment.

[PC] Yeah and we know historically that in the one country where self-managed market socialism was tried for a prolonged period, which is Yugoslavia, it had many advantages compared to a capitalist economy, and it achieved decent growth rates, but the economy had chronic unemployment which was solved by immigration to work in Germany as Gastarbeiter. It didn’t actually solve the full employment problem, it also didn’t solve problems of regional differentials which became critical in the in the end.

[ATO] Indeed, yes, with very tragic consequences. Okay we will leave that there for now. A fantastic discussion as usual. I know people find this fascinating, I certainly do. Goodbye.

[PC] Bye for now.

[ATO] Thank you for watching.

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