Part 1

Interview with Paul Cockshott – 21 June 2016 Glasgow

You wrote the first version of your book in 1989, just before the fall of the Soviet Union. Why?

We didn’t know the Soviet Union was going to fall. It may seem that with the benefit of hindsight, it was well timed. What was clear there was a big debate going on in the Soviet Union over the question of market socialism. And we thought this was a mistake. And in order to establish that it was a mistake we had to explain how an improved planning system could be more viable. A similar debate was taking place in the labour movement in Britain due to the publication of Alec Nove’s book Towards A Feasible Socialism. Therefore it was critical important in Britain, but our primarily objective was to get a translation into Russian and get published in Russia because one of us was actually staying in Russia, Alan (Cottrell) was in Russia. Once we finished the book we were unable to find anyone to translate it to Russian before the Soviet Union crashed. So it was published first in English. I also attended to get it translated in Hungarian before the collapse and went to Hungry because I knew some social scientists in Hungry and thought maybe I could convince them to get it done. But I discovered that they had become liberals by then.

At that time planning was considered as disabled forever. You had the fall of the Soviet Union, you had Alec Nove who said ‘it is impossible’, you had China switching to a market economy, but you were convinced that planning was still actual and necessary?

Well, it wasn’t a new view, it had been a traditional and huge banner of Marxism, an essential part of the socialist economy. It struck me that the arguments that where put against planning and the about the impossibility of planning by people like Nove, were ones that it was easy to see through if you knew enough about computing and algorithms. To see that , their claims about the difficulty in computational terms of planning were entirely wrong, if compared to problems that computers were already beginning to undertake, like the weather forecasting. Computers that have been used for weather forecasting would have been good enough for planning and valuation in the Soviet Union.

You consider that the Soviet Union lacked technology but that they also could have done better than they have done.

At the time I didn’t have a very good grasp of exactly what the level of the technology in the Eastern bloc was. I visited Bulgaria and Czechoslovakia and Poland and went to computing centres there to see what kind of resources they had. But until the last ten years I didn’t really get a sound assessment about what the capacity of the Soviet own-design machines were. What struck me was, talking to engineers in Prague, the old nineteen sixties’ and seventies’ BESM machines were technically superior to the copies of IBM computers they were then using. One of the things that was brought out by Spufford’s book, Red Plenty, is how the decision to copy IBM technology actually set them back seriously, it was a serious strategic error not going to develop their own technology.

But you say that there was also some ideological resistance and that there were some obstacles against introduction of more elaborated and mathematical planning methods in the Soviet Union.

It is complicated. In part, the mathematical economists set themselves overambitious goals, they were too perfectionist in what they wanted to achieve, rather than aiming for techniques which where just good enough to solve the problems. I’m relying on Allin’s knowledge he says that the Russian mathematical economists tried to pursue excessively optimal solutions which are much harder to do than solutions which are just good enough. This idea of settling on techniques which are just good enough for the computational resources you have available was ironically used more successfully by western economists who used linear programming in the nineteen-forties and -fifties who realised you didn’t need to get a perfect solution, you needed not optimalisation but sufficisation. There is a good American historian of economic ideas, Judy Klein, who has done an account how in the nineteen-forties American economists applied Soviet ideas of planning successfully to logistics problems that the US Airforce and US military had and the key point is to go for just what was just good enough for what you could do with the computer resources available at that time. So one thing was overambitious aims.

A second thing is that any improved planning system would have meant more influence for Gosplan and less influence for the Industrial Ministries and possibly less influence for particular plant managers. Gosplan was actually quit a weak organisation compared to the Ministries, after Khrushchev reforms Ministries became much more important. Gosplan only had maybe 3000 staff, so the agency which would have to push it through was not the strongest part of the government apparatus in the Soviet Union. That’s likely to have been another obstacle. It is not that these ideas have not been promoted, the Ukrainian cybernetician Glushkov was promoting this kind of ideas in the late fifties early sixties, at the point when Khrushchev was ambitiously predicting the Soviet Union would reach communism by the mid nineteen-eighties, he said this is the way you have to do it: you have to create a network of computers across the whole country, you have to create data terminals in all libraries where everyone can access economic data. In a sense he was calling on the Soviet Union to build what later became the internet. And he tried to persuade Kosygin of this. They had discussion about it and they had estimates of the costings. He said it is not going to be cheap, it will cost as much as the moon project and the hydrogen bomb project put together at least and it will take maybe fifteen or twenty years before the system is operational. And Kosygin said that is for to much of a risk, we won’t do that.

You pretend that the crisis of world socialism was primarily due to economic failure. Most in the left mostly see it primarily as political.

The political failure could only come about because there was an economic failing, both in practical policy and a failing in economic theory. The failing in practical policy lead to the perception that the socialist system and economy was underperforming compared to what would be possible in capitalism and this discredited it ideologically. Critical I think was the fact that a section of the intelligentsia in the Soviet Union changed side during the nineteen-eighties as a result of what they saw as a stagnation taking place. This was a combination of a real slowdown, a quite significant slowdown, of the Soviet economy, with a particular class viewpoint of this section of the intelligentsia who knew that they could have had higher salaries in a capitalist economy. People in their position were better paid in capitalist society. That was bearable, if as during the nineteen-fifties and early sixties, the Soviet Union was growing rapidly and their own standard of living although it was not better than that of an industrial worker, it was still getting better fast…. If the rate of growth slowed down, and they could see and believed that the American technical middle classes were better of than they were, it no longer seemed plausible that catchup was going to be achievable by steady growth of the Soviet economy and therefore it only could be achieved by income differentiation. In fact, the paradox was, that in terms of improving people’s living standards from the nineteen-seventies to the start of nineteen-ninety, the Soviet economy outperformed the United States but that was not the comparison the people where making, they were making the comparison with the nineteen-sixties and the nineteen-fifties in the Soviet Union, when it was growing much more rapidly.

In 1993 you published the paper ‘Socialist Planning after the Collapse of the Soviet Union’, when everyone spoke about the final bankruptcy of the planned economy. Your ambition was to prove that another planning would be more performant and possible. But you began by going back to the historical controversy between the Austrian liberal school with Von Mises / Hayek on one side and the Polish socialist Oskar Lange at the other side. Why is this important?

Because that still provides the starting point for the justification that bourgeois economists commonly use for saying that socialism is unfeasible. They still refer back to these proofs that have supposedly been carried out by Hayek and Mises. They say Hayek and Mises said this in the nineteen-twenties and -thirties and look the Soviet Union collapsed and they have proven why. The questions then are ‘were these arguments valid’ and ‘did the events really prove they were right or not’? We set out to show that ‘no’ the basic arguments weren’t valid and events haven’t proven they were right.

Can you explain briefly what the technological means of today could do better than in the Soviet times and what problems of Soviet planning could easily be solved today?

Using basically administrative techniques, with almost techniques like military command and control, it was certainly possible to carry out rapid industrialisation. And the Soviet industrialisation happened faster and was more successful than any other one. From that point of view the Soviet system was very successful. However that kind of directive command and control by manual administrative means, meant it was difficult to regulate more than maybe one or two thousand products and set plan targets for these products. Within this plan broad categories of products, each one of them would be made up of many individual products within that category were used, but the plan targets were not expressed in quantities of particular models of good from that factory to be delivered each year.

They were in terms of so many roubles of this product category to be delivered this year and the control system therefore had a mismatch with the number of different products to be produced. If you just were planning large commodity like categoreis, concrete, pig iron, aluminium ingots it works fine, but for finely detailed industrial products you could hit plan targets in rouble terms but have an inappropriate mix in the fine details of the products. And that is the point Nove made. So you needed to be able to plan down to the individual product code.

Nowadays capitalist economies have the information processing techniques to do that. Every time we buy something in the supermarket the bar code, the individual product code of that thing is scanned and is recorded on the supermarket computers and orders are issued at the end the week for the exact goods that have been sold. And that requires an information processing capacity that can only be achieved through informatisation. That detailed bar code level planning developed themself. You have to plan from the consumer side in a sense of human consumers but also , much more critically, from the standpoint of industrial consumers. The right parts or equipment have not always been available and delivered.

Didn’t you get the critics that you defend a technocratic concept of socialism? Is performant planning only a question of better calculation and informatics?

Some people were saying that any system of centralised planning is inevitably antidemocratic and puts a bureaucracy in control. I think this is a fantasy, it is not actually what happens. If you look at the Soviet Union the planning apparatus was not the apparatus that had political power or political direction. The economy, even in the Stalin period was not a dictatorship of Gosplan. The administrators of Gosplan had relatively little influence on overall economic policy. The overall economic process was settled by the government which was appointed by the communist party and it was the political apparatus that was determinative. If you focus at the political level, you have to talk about changes at the political level to insure that the government of the country represents the interests of the majority and the majority has some control on that. That is a quite separate question from whether you have a planning system or another system.

You exhume an old idea of Marx in the Critique of the Gotha Program, an idea that has never been applied and tested: the payment in labour-tokens, or in a labour-account today. Can you explain what it means and why it is so crucial in your argumentation?

The first point is that you have to take into account this idea was not unique to Marx. It was a widely accepted view by socialists of these times, that some form of labour account payment must exist, at least among the more radical part of the movement. Why it is so important?

It is important because in any society you have to be able to use human labour efficiently. Because it is the fundamental resource that the society has. Nobody of us lives forever, we are all mortal, the amount of time we have is limited. That is the resource that humanity has. That can only be spent in particular ways.

In a capitalist society calculations in terms of money are indirectly calculations of time, behind money is always time. The reason why the capitalist economy is able to operate is that by doing monetary calculations it is eventually calculating the efficient allocation of labour. However by making money a separate thing, a separate object, coins, banknotes, which can move around physically, they acquire a mystified character. People don’t see that what they are actually doing, is calculating human time. It seems that it is tokens which are being valued. Because these tokens can be privately appropriated you inevitably get the accumulation of the money in the hands of a minority of the population who therefore get control over the labour of the rest. But it been done indirectly in the form of money. Money becomes a social power over labour, it is just the representation of labour, but it is the means by which society calculates and oppresses labour.

Coins are means of calculation, but because of their physical properties, they can be picked up and carried away and one person controls it. From the moment of their invention you got the domination of human labour by money, by what Aristotle called chrematistic, the search for money. You get the paradox, that we get in the fable of Midas, the king of Phrygia, who touched everything and turned it to gold. Why do the Greeks tell the story, it’s because the Phrygians invented money, they invented coins. What is the fable telling you?

It is telling you that the search for money negates itself, you cannot eat gold, so he starved to death from eternal greed . That is lost in modern society, we don’t have the close contact with natural economy, to see that contradiction. So people see wealth as being money. As soon as you do the calculation in terms of money you are doing it in terms of social power of one person over another. You inevitably mystify the allocation of labour and end up with basically exploitive relations. But you cannot do away the need to calculate and allocate labour.

Marx said that a natural law cannot be abolished, only the social form can change. One of the most pernicious misrepresentations of Marx, that is prevalent very widely among Western Marxists is the idea that under communism everything is to be given away free to every need irrespectively if they work or not. There is nowhere in Marx where he says everything is going to be given away to each and everyone. He speaks of allocation according to labour time as the first principle. And then he says it is modified later to the extend that society is richer and more prosperous. It is modified so that those who have greater need they receive a disproportionate rate of pay. He is very specific about this, he speaks about people with a larger families or people who are sick, someone with a larger family to support receives a higher rate of pay. This is turned into fantasy land by most Western Marxists who completely ignore what it means when he talks about payment according to need and think it to mean everything will be available for people nothing according to ones whims. And someone’s whims are not needs. Needs are something objective, which society can ascertain. You have more needs than someone else and therefore you get more. It doesn’t mean that you can sit on your ass all day, do no work and get as much as someone who works hard.

Thanks to Jo for asking the questions, and transcribing the recording.