Oldrich Kyn
 

Marx and
the Mechanism of
Functioning
of a Socialist Economy
 

 OECONOMICA, VOL. III No. 1, Prague 1968,

From the Belgrade conference for one hundred years anniversary of 'Das Kapital'.

 

At present [1968] Czechoslovakia is taking the first serious steps in the implementation of the new system of control of the national economy. We are thus joining the growing number of those socialist countries, which have been attempting to reform their economies. All of these reforms to a greater or lesser degree stress the decentralization of economic control and to some degree also resumption of the role of market. But unlike the other countries we are aiming at a much more consistent resurrection of the market mechanism that would include competition, entrepreneurship, free pricing according to market supply and demand etc. In this context the critical problem of compatibility of central planning with the function of market emerges. With the exception of Yugoslavia this problem has been sidestepped until recently. Many economists in the socialist countries denied even a possibility of "coexistence" of plan and market.

For this reason extensive economic discussions were a necessary precondition for practical implementation of economic reforms. In some extent these discussions continue to this day. In these discussions some of the concepts and propositions of our economic theory were revised, a number of dogmatic principles were rejected end certain new ideas concerning the functioning of the socialist economy are being developed. In this process the following important question is quite naturally posed: To what extent are our new ideas about the functioning of a socialist economy in accord with Marx's theory? Marx did not think that the market would exist under socialism or communism and he considered rational conscious control of the economy and planning to be the antithesis of the spontaneous activity of the market.

 

 

1.

If we at present refute certain concepts and propositions that have been considered as absolutely and unequivocally true by Marxist economists this does not necessarily mean that we are in contradiction to Marx's own ideas. Marx himself said very little about the concrete organization of a socialist economy. His economic theory was above all a critical analysis of the capitalist system. Only a few passages of a more or less general character pertain to problems of socialism. The majority of the concepts and propositions of the political economy of socialism were developed by one of the following ways:

Marx's general remarks about socialism were 'elaborated' and 'made specific' by his followers.
By inference from Marx's criticism of capitalism.
By inclusion of principles that did not originate with Marx but with other socialist thinkers who were Marx's forerunners, contemporaries or followers.
It is not surprising that such a process could have led to components of the
"Marxian" economic theory of socialism that are in direct contradiction with Marx's own theory and can be considered a distortion of his views.

2.
By what has been said above the author does not wish to imply that the whole process of reevaluation of the economic theory of socialism is in effect only a correction of dogmatic misinterpretations of Marx. At some point we have to admit that
reevaluation of Marx's own theories is also necessary.
At present there is more or less a general understanding that Marxism cannot be taken only for a sum of quotations from the classics, that are allowed only to be illustrated, embellished and further diluted by their interpreters. Instead
Marxism should be a viable and constantly evolving open system. Only that would be consistent with the general progress of human thought and knowledge, with improvements in methods of economic analysis, and with the actual changes in economic life that form the subject matter of economic theory. Any scientific theory is necessarily the product of its time because it is influenced by those theories that came directly before it and by the general level of scientific methods available. 

Although Marx was without a doubt an economist of genius who made a great step forward in the development of economic theory, he could not disengage himself completely from his own historical determination. It is quite obvious from reading "Das Kapital", "The Theories of Surplus Value" and other Marx's economic works to what extent was he influenced by the topics and analytical tools of his theoretical forerunners and contemporaries. This is especially true about the influence of the classical economists Smith and Ricardo, as well as of socialist thinkers such as Owen, Gray, Hodgskin and others. The evolution of economic theory continued after Marx. New problems appeared and questions, that during his time may have not been very important, came to the forefront. Also new methods were developed, especially mathematical methods, which Marx could not have used in his time.

The above inference does not follow solely from the autonomous evolution of knowledge, it is deeply rooted in the transformation of socio-economic reality itself. In the economy of the XXth century entirely new elements, that either did not exist at all or were insignificant during Marx's time, have achieved paramount importance. If Marxism is not to remain just a collection of quotations, that would increasingly lose relevance due to changes in socio-economic reality, then it must be continuously enriched with new knowledge. We cannot stop short of reexamination of theories that had until now been considered absolutely correct. During this process integration of new knowledge and new methodological approaches, even if they were developed by non-Marxist economists must take place.

 

3.
Why did Marx believe that market must be replaced by a rational planned control of the economy?
Marx, as well as a number of his forerunners, saw the market mechanism as functioning purely on ex post basis. This should be obvious from his formulation of 'the contradiction between the private and social character of labor under commodity production'. In a market economy a commodity is being produced for public, but its producer never knows ahead of time whether he is actually producing something that the public would want. Only the market itself, will determine ex post whether the value-in-use of that commodity had a truly 'social character'. Most of the other contradictions inherent in the market economy are according to Marx explainable from this basic contradiction. The lack of ex ante coordination of production decisions leads necessarily to the spontaneous imbalances and cyclical fluctuations in market economies.

At other places, e.g. in the chapter of 'Das Kapital' dealing with the 'commodity fetishism', Marx predicted that in a socialist economy, no spontaneous market would obscure 'relations of production', and that people working with common means of production would be able to use their individual labor powers in a planned fashion as a single social labor power. Social relations among people in the process of production and distribution of goods would be unobscured and transparent. Under socialism the rational allocation of labor power would be guaranteed ex ante and it would not be necessary to test it ex post in the market place. Thus the labor would become a 'directly social labor'.

We have the following contrasting concepts: On the one hand the ex post functioning of the market obscures the true relations and leads to disturbances in the economy. On the other hand an ex ante guaranteed smooth coordination of all socio-economic processes. This crudely stated opposites became the basis for belief that market and plan are incompatible, and that under socialism central planning must replace the market. Let us now analyze the new factors that have emerged both in theory and in reality since Marx's days.

 

4.
Today
market does not function solely in an ex post manner. It did not even in the first half of the nineteenth century and all the more so now. Almost no producer works completely "in the dark". He always has some information, albeit incomplete, that allows him to anticipate demand and thus determine what is to be produced. This anticipation, of course, does not have to be entirely correct and in fact very often is not. To what extent it was correct is tested by the market. The market thus functions ex post, but not entirely or uniquely. Even in a pure market economy the producer makes decisions about production ax ante according to the anticipated future. In this sense perhaps the term planning can be used. But in a pure market economy this ex ante decision-making is entirely decentralized. That is to say the individual producers, in an atomized economy, are those who plan, though the economy as a whole is not planned. The ex post actions of the market can thus be understood as ex post corrections in those situations where demand has not been correctly anticipated.

The term market mechanism cannot be reduced to mean only those processes that take place in the marketplace itself. By market mechanism we mean three types of processes mutually interrelated by channels of information.
Production decisions within firms (described by the theory of the firm).
Decisions about consumption (described by the theory or consumer behavior).
Pricing according to supply and demand on the market (described by the theory of market equilibrium).
If we have this understanding of the market mechanism, then it follows from what has been said above that market always contains certain combination of ex ante decision making and ex post corrections: Planned decision-making about production on the basis of anticipated demand is later corrected by the market

All this leads to an important conclusion: The quality of the coordination done by the market does not depend solely on the fact that the market form exists, it depends also on how good is the anticipation of future demand. If in fact actual demand comes close to what had bean expected, the ex post corrections are very small in size and the economy functions smoothly, without larger fluctuation and disturbances. If however the difference between expected and real demand is larger, then economic equilibrium is disturbed and this disturbance is multiplied by the feed-back loop and transferred from industry to industry until the whole economy is subjugated to cyclical fluctuations.

 

 

On what factors does the quality of anticipating future demand depend?

  1. First of all on the stability of conditions. If long-term changes in demand are small, then it is possible to estimate future demand from experience with a fair amount of accuracy. Under such conditions the market mechanism is able to ensure good coordination.
    On the
    length of time for which predictions have to be made. Where the production cycle is very short, it is sufficient to anticipate demand for only a few days or weeks in advance. In such cases again the market mechanism alone is able to match supply and demand very well. In branches where the production cycle is very long, or where investments take a long time to complete, it is necessary to estimate demand several years in advance, which makes the risk of incorrect decisions much greeter.
    How correct estimates of future demand are depends on the
    quantity and quality of the available information. Therefore any measures which improve the information firms receive about the development of future demand, reduce the necessity of ex post corrections.
    How correct anticipations are also depends on
    how good are the methods for estimation of future demand . Thus the improvement of these methods also lessens the size of the necessary corrections made ex post by the market.

It follows from conditions a) and b) that the quality of economic coordination provided by the market mechanism is not always the same, but depends on specific circumstances. In periods of slow change the market mechanism functions fairly well, while during periods of rapid and large changes (such as natural disasters or great waves of innovations) it functions rather poorly. From another point of view it may be said, that the coordination provided by the market mechanism can be very good in some branches of the economy and insufficient in others.

It follows from conditions c) and d) that the function of the market mechanism can be improved by better information systems and more reliable methods of prediction. Especially in this area there have bean important developments during the past century. The channels of information connecting various segments of the economy have been greatly improved. A much greater volume of information of a much higher quality is gathered and passed on to firms. The speed with which this information is passed has also increased. A very important role in this connection is played by the improvements in central statistical services and by analytical work of diverse market research organizations.

 

 

The development of modern industry has been accompanied by formation of huge, concentrated units, whose production is not dependent on the momentary signals of the market, but is planned far in advance, on the basis of contracts and agreements made for long periods of time. A number of institutions, which "organize" the market and prepare systems of "future markets" emerged. All this has lead to the fact that firms, especially in those branches where this is necessary, have qualified information about future demand, so that they can make ax ante decisions with relatively small risk.

In the XXth century forecasting methods have undergone fast development. This is related to the development of mathematical methods and computers. Methods of demand analysis using estimated elasticity coefficients, make it possible to predict changes in demand for individual types of commodities. Another improvement is due to input-output analysis, that make it possible to project expected changes in final demand and changes in technology into the demand for various types of intermediate products. Finally it is the system of central "indicative" planning that is a central prognosis of the growth of national income and other essential macroeconomic indicators (as in France and the Netherlands). Indicative planning is an advanced phase of improvements in quality of information about probable future demand that firms have at their disposal. Through the central plan firms are able to obtain information to which they would otherwise never had access.

The above mentioned processes can all lead to a great improvements in ex ante decision-making of firms and thus limit necessary corrections which the market must make ex post. We thus see that without eliminating market mechanism the planned coordination and development of the individual parts of the national economy can be strengthened. So the concept according to which the market mechanism acts only blindly, on an ex post basis and leads to spontaneous and unintended development of the national economy, is becoming less and less true.

5.

Let us now examine the system of centralized economic control, from which the function of the market mechanism had been eliminated. According to earlier believes such a system should completely remove the spontaneity that was considered a negative outcome of the market mechanism. It was assumed that all economic relations and processes would become transparent and easy to observe and that the social character of production would be ensured by a conscious and planned allocation of labor, means of production and finished commodities among the individual spheres of production and consumption. This assumption was based on the concept of the directly social character of labor under socialism. The term "directly social character of labor" presumably meant that the social character of individually performed labor does not have to be assessed at a later stage, when the result of labor are confronted with the real needs of society, but are assured beforehand, that is before the labor itself has been done. On the basis of conscious decision-making only such goods would be produced, which society really needs, so that a subsequent proof by the market would not be needed. In other words decision ax ante would be so perfect, that no ex post correction would be necessary.

The experience we have gained from the functioning of such a model has shown us, that the concept of the directly social character of labor was unfounded. Elimination of the market and creation of a system of centralized planning is not a sufficient condition for achieving so perfect ex ante decisions, that ex post corrections would be superfluous. Somebody may object that such a conclusion could be valid only if we assume the use of imperfect planning methods as in the past. Presumably with newly developed optimization methods and with the help of computers much can be improved in this respect. But our conclusion about the impossibility of entirely correct ex ante decisions can be sustained theoretically and does not have to be based only in practical experience. At the same time however we should not see the economy through the eyes of classical economics of the last century. Rather we should use a contemporary approach of the theory of information and decision-making.

 

 

Why did Marx as well as some other socialist thinkers of the 19th century believe in the possibility of substituting centralized planning for the market mechanism? Why they wanted to develop a directly social character of labor? Perhaps a general comparison of scientific approaches in the 19th and 20th centuries will shed some light on this questions. In 19th century the natural as well as social sciences were undergoing very fast development. Physics, which was the most exact among the sciences, had a dominating role in the formation of scientific thinking. The methods employed by physics seemed at that time to be prototypes for the methodology of all branches of science. This fact caused that virtually all the scientific thinking in the 19th century concentrated its attention primarily to problems concerning matter end energy and their relationships in various systems. The question of the role of information had practically not been posed. The state of economic reality contributed to this orientation of science. For any society the main limiting factor for the growth of its wealth was its productive capacity, that is the quantity of material and energy resources. The problem of information and the ability to make decisions did not seem as important. The fact that information is never "free", that to acquire information society has to spend both material and energy was entirely overlooked. Equally overlooked was the fact that there are natural limits as to the amount and speed of information transmission.

 

 

This does not mean that the existing network of information and decision-making was considered ideal. On the contrary, Marx's criticism of the market mechanism is implicitly also a criticism of the poor organization of the information and decision-making network of the society. In Marx we find the approach typical for science of the last century: no distinction between phenomena that were the result of the material and energy limitations and those that were the result of poor organization of society's information network. Because science in the 19th century had not formulated laws concerning information and decision-making, it was possible to imagine that by a radical restructuring of the information and decision-making network of society, it might be possible to achieve perfect economic coordination ex ante.

Keeping in mind the laws of information transmission and decision-making processes we can say

  • absolutely correct ex ante decisions are impossible for principal reasons ;

  • the goal of making prognosis more precise is not always economically rational;

  • removal of the market mechanism make thing's worse, not better.

     

What are the reasons for these conclusions? None of the exogenous factors, that must be taken into account when computing the plan can be anticipated with absolute certainty. Many of these factors can be guessed only with low probability. This is especially true, of such exogenous factors as the weather, natural disasters, innovations, conditions prevailing in international trade and politics, changes in consumer's tastes etc. During preparation of the plan we assume certain specific configuration of these exogenous factors, whereas during the implementation of the plan the situation is almost always different. The plan worked out from the originally presumed configuration either cannot be fulfilled at all, or if it is carried out, it does not represent the optimum solution, in view of the changed conditions. In other words in such a situation scarce resources are not being used in the best way to maximize final benefits of the society.

 

 

Decisions that need to be taken ex ante can only be derived from the probabilistic estimates of future conditions and thus will always involve some risk. If the dynamics of the economy were dependent only upon such decisions, economic disequilibrium, inefficiency and waste of scarce resources would be inevitable. It is therefore necessary for optimum development of the national economy, that besides ex ante decisions also a system of supplementary feeds-backs exists to ensure ex post corrections. This can be done most efficiently by the market. One can imagine methods other then the market, for implementation of ex post corrections, but experience has shown that none of the other methods known are superior to the market. 

 To understand why the goal of making forecasts more precise is not necessarily economically rational, we must take into consideration that all gathering and processing of information incurs costs in terms of labor and material. The more information we want to collect, the higher costs are incurred. It means that a large share of scarce resources of the society has to be withheld from the production of commodities. The inaccuracy of our anticipation of the future is not only the result of the principal impossibility of gaining certain types of information about the future, but also stems from the fact that we do not make full use of information that would be possible to acquire. To increase the amount of information gathered would have two consequences. First of all our forecasts would be somewhat more accurate, and thus the risks connected with planned decision-making would be reduced. But at the same time the cost of the information process would grow. It is evident that this will be efficient for society when the gain from reduced risks of decision-making would be higher then costs incurred by the gathering and compilation of further information. This leads us to an important conclusion: For optimum development of the national economy it is useful to leave a certain number of processes to ex post correction even in cases where ex ante decisions might be possible..

 It has been shown that the market is a necessary and useful corrective, but actually the role of the market is more important. It can be shown, that for optimum development of the national economy the market is also a necessary prerequisite of planned decision making

 

 

At each moment of time the volume of production is constrained by available scarce resources. These limited resources can be combined in numerous ways to produce many distinct combinations of final products. Consumers have their individual preference scales by which they rank resulting combinations. An optimal plan should find among the multitude of possibilities those particular combinations of products that make best use of scare resources as judged by individual and social preferences.

According to Marx, removal of market mechanism would make "relations of production" so transparent, that it will be simple to set an optimum plan directly in physical units. There would be no need to use calculation in value terms. While it may be true that the market form obscures some productive relations and that it leads to "fetishism", Marx seems to have been mistaken when he thought that removal of market would make all relations within the economy completely transparent. This point was discussed in the well-known "socialist contraversy" (von Mises, Hayek, Lange, Lerner and others) on planning and economic calculation under socialism. The fact that relations in the modern economy are obscured and complicated stems from very complex division of labor and from the great number of interrelated technologies. It has been convincingly shown that under the intricate modern productive and technological relations, mere common sense cannot grasp the whole picture, without converting diverse units of measurement to some sort of "common denominator". Marxist economist Oskar Lange, had to admit that categories of the market such as prices, wages, interest etc., are a necessary prerequisite, which enables people who make economic decisions to find their way in the incomprehensible maze of technological combinations. Abolishing the market does not make it easier, but on the contrary, makes it more difficult to make ex ante decisions. Without the help of calculation in monetary units it is impossible to achieve coordination of decisions, that would ensure the smooth functioning of the economy.

 

 

Since prices emerge as important parameters which is necessary for the measurement of efficiency, it is not irrelevant what prices are being used. If the price system is distorted, then economic decisions are misguided i.e. what seems to be the optimum decision for a given problem, may not be the optimum solution for society as a whole. In order to find optimum solutions for society as a whole it is necessary that prices reflect scarcity of resources relative to individual and social preferences. But such prices cannot be centrally calculated and therefore the optimal development of the national economy cannot be ensured if all prices are rigidly fixed by the center. Prices which reflect the scarcity of resources in relation to the preference systems can be obtained only by the market. Since without such prices optimum decision-making is impossible, we come to the conclusion that the market is indispensable for the functioning of the socialist economy. Market is needed because it provides the parameters for ex ante optimum decision-making.

 

 

 

In the above discussion the necessity for the existence of the market is based on three facts:

  • The scarcity of productive resources,

  • The fact that the social productive process is immensely complex.

  • The need for taking individual and social preferences into consideration.

Insofar as these three facts exist it is impossible to achieve optimum development without the market mechanism. In Marxist literature we however find the idea that the existence of the market is determined only at certain level of development of the productive forces of society. It is taken for granted that further development of productive forces will make it possible to abolish market forms. It follows from what has been said above that this would be possible only if the development of productive forces would lead to the elimination of at least one of the three above facts.

 

It cannot be assumed that the development of productive forces will lead to a situation where it will not be necessary to respect individual and social preferences. Therefore we must assume that productive resources will cease to be scarce or that such a simplification of productive processes will take place, that the calculation of an optimum plan could be possible without the help of calculation in terms of money units. Neither one or the other situation can realistically be foreseen. Marxist theory has mostly considered only a single limiting factor - labor. Thus it has been assumed that the development of productive forces would gradually lead to a lesser and lesser dependence of the volume of production on the amount of labor used, until finally the situation would he reached where production would be carried out completely automatically. If this were true then categories of value would indeed loose their relevance and society would have complete abundance of products. The only problem would remain how to produce such goods that are wanted. The problem of optimum use of scarce resources would be eliminated. But if we take into account that labor is not the only limited productive factor, that other resources exist, of which we cannot assume that they will cease to be scarce, then this means that prices as an expression of the scarcity of resources in relation to human preferences will not loose their importance for optimum planning even under conditions of complete automation.

 

 

Marxist theory has also assumed that the development of productive forces will, in a certain sense, lead to a simplification of the social process of production. This idea was based on the fact that the development of productive forces goes hand in hand with the gradual concentration and centralization of production. A number of Marxist authors (for instance  Kautsky, Hilferding, Lenin and Bucharin), assumed that the process of concentration would culminate in the formation of an "ultramonopoly", that is a single firm which will contain the whole sphere of production in the nation. A socialist national economy was thus thought of as such an "ultramonopoly" in which inequitable income distribution based on class would be eliminated. At first glance it may indeed seem that the relations between production and consumption within such an "ultramonopoly" are very simple: all production is done by one unit and the whole problem is then reduced to specifying the wants of society according to which the mixture of products of this "ultramonopoly" is set. However two aspects in this vision are debatable. First of all it does not seem credible that under conditions of contemporary capitalism a tendency toward the formation of a single all-embracing monopoly really exists. Even though it has been proven that the largest firms' share of the national economy has been steadily growing, the predicted disappearance of small and middle-sized firms is not taking place. At the same time experience has shown, that the formation of huge productive units does not eliminate the problem of coordination of economic decision-making. All problems which had earlier developed between legally independent enterprises are reproduced inside the larger unit. Economic decision-making inside this larger unit must, to a certain extent, be decentralized and therefore information channels between various places where decisions are made must again exist. Even inside a "ulttramonopoly" prices would retain their function as parameters which make optimum decision-making possible.

 

6.

Marx's theory is very complex and contains a number of diverse aspects. He himself was certainly convinced that the different aspects of his theory are not in conflict but rather complement each other. However at his time this could have been verified only in those parts of Marx's theory that had a direct bearing on reality of the 19th century. But when he wrote about socialism he could formulate not more than a purely logical model, whose consistency could be tested in real world only long after his death. To argue about what Marx really meant, what he considered to be the basis of socialism surely means to engage in a great deal of speculation. Nevertheless I believe that it will not be to far from the truth to claim the following about Marx's theory.

 

 

1) Marx considered socialism (or communism) to be a society which would overcome the basic shortcomings of capitalism: exploitation and the alienation of labor. The alienation of labor under capitalism according to Marx has its origin in the dual determination of man: as a part of the economic and natural structure and as a part or the socio-economic structure. Man's determination by the economic and natural structure in which he lives means, that man must work to maintain his life. Labor has no sense in itself, it is only a means to acquire the necessities of life. In this sense it is not an expression of the truly human qualities of man, but a necessary evil, which must be suffered to maintain the life. The concept of alienation of labor means that during his working hours man is only an instrument and ceases to be himself. Man's truly human life begins only after working hours. Man's determination by the socio-economic structure means that man does not work of his own free will, but becomes a mere tool, a slave, who must follow the orders of others. Alienation means that he is manipulated, the decision-making process is taken away from him. The mass of producers is thus reduced to a manipulated mass.

 

 

According to Marx, socialism and communism represent the abolition of alienation in both of these senses. This can take place only if the period of labor in man's life ceases to be a "non life"; the carrying out of orders given by someone else. Under communism labor is to become an expression and realization of man's own human substance, it is to become a truly human activity, which makes sense in itself and is not only a means for attaining human dimensions during after-work hours. This can however take place only after the dual determination of man mentioned earlier is overcome, only after the manipulation of man by other men, as well as the eternal struggle for livelihood are removed. 

 

 

Therefore communism is, for Marx, synonymous with a society where man finally becomes a truly free- individual, not subjugated to others, not living because of the charity of others. It appears that there is nothing more distant from Marx's concept of communism then bureaucratic centralism in which the very top of the social pyramid makes all the decisions and the individual whose capacity to make decisions is reduced to zero becomes only a small cog-wheel in an exactly ticking social mechanism.

2. The second aspect of Marx's theory of socialism and communism concerns the manner in which the mechanism of functioning of the economy is organized. For Marx alienation of labor was directly related to the existence of commodity production. especially in its capitalist form, as he saw it in the middle of the last century. The circumstances which the author tried to point out earlier in this paper, led Marx to the conclusion that to abolish the alienation of labor and to achieve humanization of society required removal of the market mechanism (he considered anarchy and exploitation to be inherent traits of the market) and creation a system of rational control and central planning.

To put it rather simply, we have to grapple with two aspects of Marx's theory: Communism as the abolition of alienation of labor and humanization of society and communism as the abolition of the production of commodities and its replacement by rational centralized control of the economy. It seems that Marx was convinced that the realization of the second aim is a necessary prerequisite for achievement of the first aim.

 

 

But the experience with an economic system, where the role of the market is limited or eliminated and replaced by bureaucratic centralism, as well as theoretical considerations based in new knowledge and modern tools of analysis, are to a larger and larger extent, convincing us that replacing the market mechanism by a system of centralized decision-making (at least in its command and bureaucratic form) cannot ensure those characteristics, which Marx considered essential for a communist society. Bureaucratic centralism is not helping to eliminate alienation of labor and manipulation of man, and therefore it cannot achieve true humanization and democratization of society.

We are now confronted with the following dilemma: if the two aspects of Marx's theory as we have described them, are not mutually consistent, then we must give up one of them, or at least try to reformulate it in a new way, so as to be able to keep the other. It is evident that two different schools of thought can develop from Marx, two schools of contradictory ideas. To argue which one is "true Marxism" is irrelevant. This would involve looking for proof of which aspect was more important to Marx himself, and which he would have been willing to give up. This would bring us to pure speculation. Let us accept Marx as he was, and let us not ask him to see the world from the point of view of the twentieth century.

There are people who are convinced that "true" Marxism requires them to adhere above all to the second aspect we mentioned, that is removal of the market mechanism and in its replacement by rational centralized decision-making. These people usually cannot envisage socialism without a system of command planning and for this reason they are willing to give up the aims of abolition of the alienation of labor, of humanization of society and of freedom of choice. The present author thinks, that socialists should not see the central control as an end in itself, but only the means for attaining the aims most important to a socialist society. Socialism (and communism) should not be considered a society based above all on centralized planning, but a society, which should above all be based on the principles of humanism and which should lead to the full liberation of man. Thus the contemporary endeavor to design a system for a socialist economy based on a combination of planning and market is in a certain sense a revision of Marxism but it is true to the socialist aims and ideals of Marx's theory.

 

 

At the end one warning. The criticism of the administrative and centralized planning should not lead to idealization of the market mechanism. The market does have and will continue to have even under socialism a number of negative aspects, which have been criticized by Marx and other socialists. The profit motive will continue to have negative influence on morals. Market could again lead to new forms of alienation and dehumanization of social relations. The real consumer sovereignty will always be more or less a fiction in the world where the apparatus by which information is spread can force various wants on people. However these consequences of the market cannot be simply prevented by abolishing the market. That would not improve but worsen the situation. Will we be able to find a way to resolve these contradiction?

 

 

 

 

 

 

 

 

 

 

 

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