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Rationality and Distribution in the Socialist Economy Dapprich, Jan Philipp (2020) Rationality and distribution in the socialist economy. PhD thesis. http://theses.gla.ac.uk/81793/ Copyright and moral rights for this work are retained by the author A copy can be downloaded for personal non-commercial research or study, without prior permission or charge This work cannot be reproduced or quoted extensively from without first obtaining permission in writing from the author The content must not be changed in any way or sold commercially in any format or medium without the formal permission of the author When referring to this work, full bibliographic details including the author, title, awarding institution and date of the thesis must be given Enlighten: Theses https://theses.gla.ac.uk/ [email protected] Rationality and Distribution in the Socialist Economy Jan Philipp Dapprich Submitted in fulfilment of the requirements for the Degree of Doctor of Philosophy School of Humanities College of Arts University of Glasgow October 2020 © Jan Philipp Dapprich 2020 Abstract The thesis provides a philosophically grounded account of a socialist planned economy. While I do not primarily consider a positive case for socialism, I address two major objections to it and thus argue that the possibility of socialism as an alternative form of economic organ- isation has been dismissed too quickly. Furthermore, I provide an account of the precise form a socialist economy should take, outlining general principles of planning and distribution. Based on a welfarist interpretation of Marx, I show that distribution of consumer goods should be facilitated by an equal distribution of tokens. These tokens can be redeemed for consumer products or substituted for additional leisure time. The rates at which tokens can be redeemed for consumer products should correspond to market clearing prices. Welfare-oriented social- ism is also defended against a deontological objection to socialism by Robert Nozick, who claims that socialism leads to injustice because it violates private property rights. The thesis also considers Ludwig von Mises’s calculation argument against socialism, which claims that socialism leads to the abolition of economic rationality. I show how this objection can be overcome by using optimal planning techniques which are responsive to consumer demand as signalled by the market clearing rates of consumer products. The resulting model of socialism is tested using a computer simulation. The simulation also demonstrates that a novel system of valuation based on opportunity cost leads to a better adaptation of production in response to environmental constraints when compared to the labour values of classical political economy. ii Contents Abstract ii List of Accompanying Materials vii Preface viii Acknowledgement ix Author’s declaration x 1 Introduction 1 2 Scientific Utopianism 10 2.1 The Utopian Novel .............................. 11 2.2 Marxism and Utopian Socialism ....................... 12 2.3 Scientific Utopianism ............................. 16 2.4 Piecemeal vs Utopian Social Engineering . 18 2.5 Scientific Utopianism and the Socialist Calculation Debate . 23 2.6 Conclusion .................................. 24 3 Exploitation, Justice and Welfare 25 3.1 Exploitation and Injustice ........................... 27 3.2 A Welfarist Reading of Marx ......................... 32 3.3 Socialism as Injustice: the Deontological Objection . 38 3.4 Conclusion .................................. 48 4 Distribution of Income and Labour 50 4.1 Equality of Income .............................. 52 4.2 Leisure and Labour .............................. 56 4.3 Common Funds ................................ 61 4.4 Higher Stage of Communism ......................... 67 4.5 Conclusion .................................. 70 5 Converting Tokens into Goods 72 5.1 Dworkin’s Auction .............................. 73 5.2 Subjective vs Objective Valuation ...................... 78 5.3 Tokens as non-circulating IOUs ........................ 85 iii iv CONTENTS 5.4 Conclusion .................................. 90 6 Economic Rationality: The Socialist Calculation Debate 92 6.1 Marx on Socialist Planning and the Austrian Response . 94 6.2 O’Neill’s Interpretation of the Calculation Argument . 96 6.3 The Calculation Problem as a Problem of Complexity . 100 6.4 Linear Programming as an Alternative to the Market . 102 6.5 Combining Instrumental- and Value Rationality . 105 6.6 Measuring Cost in a Socialist Economy . 109 6.7 Leaving Resources Idle ............................ 112 6.8 Conclusion .................................. 114 7 Computational Results from a Simplified Model 116 7.1 Why use a Computer Simulation? ...................... 117 7.2 Simplified Model ............................... 120 7.2.1 Overall Model ............................. 120 7.2.2 Distribution .............................. 121 7.2.3 Economic Expansion . 122 7.2.4 Green Energy Transition . 123 7.3 The Simulation ................................ 125 7.3.1 Inputs ................................. 125 7.3.2 Linear Optimisation and Valuation . 126 7.3.2.1 Objective Function . 127 7.3.2.2 Constraints . 127 7.3.2.3 Valuation . 128 7.3.3 Consumer Model and Target Adjustment . 129 7.3.3.1 Consumer Model . 129 7.3.3.2 Clearing Prices . 130 7.3.3.3 Target Adjustment . 131 7.4 Results ..................................... 131 7.5 Discussion ................................... 136 7.5.1 Demonstration ............................ 136 7.5.2 Problem identification . 137 7.5.2.1 Controllers . 138 7.5.2.2 Computational Complexity . 139 7.5.3 Testing ................................ 143 7.6 Philosophical Relevance . 144 7.7 Conclusion .................................. 147 8 Conclusion 149 Bibliography 152 List of Tables 7.1 Input table based on a small sample economy provided to me in personal correspondence with William Paul Cockshott . 125 7.2 Output table complementing Table 7.1 . 126 7.3 Target vector complementing Tables 7.1 and 7.2 . 126 7.4 Input table for first test economy. Outputs for each method are assumed to be one unit of A, B and energy respectively . 131 7.5 Initial target, initial prices and weights for all test economies . 131 7.6 Adjusted labour values and adjusted OCVs of A and B for the three test economies in the 20th plan period using the LV and OCV models respectively. Since adjusted values are scaled to prices, the unit is one unit of consumer credit. Values in the sample economies change very little over time so that the values in earlier plan periods are close to the values in the 20th plan period depicted here. ............................. 133 7.7 Input table for second test economy. Outputs for each method are assumed to be one unit of A for methods A1 and A2, one unit of B for methods B1 and B2 and one unit of energy for coal power. The third test economy is identical, except that method A2 is left out. 134 v List of Figures 2.1 Fitness landscape. Contour lines indicate level of fitness. Pluses and minuses indicate hilltops and valleys respectively. The image was provided to me by Nils Wassilijew and is based on a similar image by Wright (1932, 357). 21 7.1 Amount of products A and B produced in the 20th plan period of the first test economy. Black represents the product without an emission constraint. It is the same for the OCV and labour value models. With emission constraint the products are represented by red (labour value model) and green (OCV model). 132 7.2 Amount of products A and B produced in the 20th plan period of the second test economy. As before, black represents the product without an emission constraint. With emission constraint the products are represented by green (OCV model). The results of the LV model correspond almost exactly to those of the OCV model and are thus not shown separately. 134 7.3 Amount of products A and B produced in the 20th plan period of the third test economy. As before, black represents the product without an emission constraint. With emission constraint the products are represented by red (labour value model) and green (OCV model). 135 7.4 Graph showing the run time of a linear optimisation for randomly generated economies with n products. X-axis shows the value of log(n), Y-axis shows the value of log(t), where t is the time measured for the optimisation. The data points closely follow a straight line, which suggests a polynomial relationship between n and t. A linear best fit with a gradient of 3:3 is shown, suggesting the relationship between n and t is of order n3:3. 141 vi List of accompanying material Python code for OCV simulation (see Section 7.3) ”Simulation2.py” Python code for consumer model definitions (see Section 7.3) ”Def.py” Python code for labour value simulation (see Section 7.3) ”labourValueSim.py” Python code for complexity test (see Section 7.5.2.2) ”complexity.py” vii Preface Some of the content of this thesis has been published. An article in Mythos Magazin (Dap- prich, J.P. and Körner, P. 2017, Utopien: Ideologie oder Wissenschaft?, Mythos Magazin) is in part based on a German translation of an early draft of Chapter 2. A book chapter (Dapprich, J.P. 2018, Cybersozialismus als konkrete Utopie, in Neupert-Doppler, A. [ed.] Konkrete Utopien, Schmetterling Verlag) is not based on any particular chapter but includes some of the research findings presented here. Variousblogposts for www.designing-history.world describe the computer simulation presented in Chapter 7. Some quotations from online sources, such as the Marxist Internet Archive, or e-books do not include a reference to the page number, since page numbers do not exist for these. Instead, I have provided the corresponding part, chapter or section number or title. Quotations from German sources have been translated by me. viii Acknowledgement I want to thank my partner Marina, my mother Gisela and my late father Frank, for supporting me throughout my life, education and research. Without their rigorous support this thesis would not exist. I also want to thank Ben Colburn and Paul Cockshott for their excellent supervision and guidance. Thanks also goes to Nils Wassilijew for providing an image and to Luke Neal and Daniel Abrahams for their comments.
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