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the Socialist Community of Citizens an institutional design for republican

Author: Tim Platenkamp (ID:12499021) Supervisor: Dr. A. Freyberg-Inan Second reader: Dr. G.R. Arlen Master’s thesis in Political Science (Political Theory) University of Amsterdam (UvA) Nieuwegein (June 5, 2020) The Socialist Community of Citizens

Abstract

This thesis attempts to expand the normative dimension of the research programme of socialist , by investigating whether civic republicanism and socialism can be married to form a coherent, attractive, and feasible model of society that promises a qualitative break with . In this way, republicanism could aid in the revival of socialism as a political movement which challenges capitalism at a fundamental level. I attempt to accomplish this by designing a socialist institutional framework which can accommodate the core values of the republican tradition. The thesis finds that multilevel iterative planning—involving self-governing production associations, intermediate negotiation bodies, and a Central Planning Board—is the means to realise republicanism in the economy. To ensure its durability, a constitutional-republican order—in which citizen assemblies act as public forums and instruments for direct legislation, within a constitutional context, complemented by a bicameral legislature—is required.

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Table of Contents Chapter I: Introduction...... 4 1.1 The Need for a Vision...... 4 1.2 The Core Values of Civic Republicanism...... 6 1.3 The Socialist in Theory and Practice...... 10 Chapter II: Public Administration in the Socialist ...... 17 2.1 The Social Contract and Socialist ...... 17 2.2 The Political Institutions and Practices of Self-...... 22 Chapter III: Production and Consumption in the Socialist Republic...... 30 3.1 Relations...... 30 3.2 Self-Government in Production...... 32 3.3 Distribution as a Public Service...... 39 3.4 The Role of Material Incentives...... 43 Chapter IV: Planning and Allocation in the Socialist Republic...... 48 4.1 and Incentive Problems in ...... 48 4.2 Markets and Planning in Socialism...... 52 4.3 Addressing anti-Innovation Bias...... 60 Chapter V: Towards a Republican Socialism...... 65 5.1 Conclusions...... 65 5.2 Limitations...... 66 5.3. Research proposals...... 67 Bibliography...... 69

3 An Institutional Design for Republican Socialism The Socialist Community of Citizens

Chapter I: Introduction

1.1 The Need for a Vision “We aim in the domain of at Republicanism, in the domain of at Socialism […].” —

In the 1990s we witnessed a general rout of socialism. The dissolution of the Union and other Marxist-Leninist regimes across the globe caused socialists of all varieties to lose confidence, even in more moderate forms of socialism (Heywood, 2017, p. 22). The far-left in , for instance, retreated from offensively advancing an alternative to capitalism to instead committing itself to defending expansive policies which were abandoned by the centre-left social-democratic parties (March, 2008, p. 9-10). When elected to office, European far-left parties hardly challenge the neo-liberal order—let alone capitalism (March, 2008, p. 14). Many socialist parties lack a coherent political vision or and are consequently forced to fall back on populist or pragmatic reinventions of postbellum social- (March, 2011). In order to restore the ability of socialism to offer fundamental opposition to the present state of affairs, a positive vision must be available that socialist theorists and strategists can draw on. The major extant socialist schools of thought that are available for adoption are , Marxist , and (Busky, 2000, p. 2). The latter barely qualifies as a vision per se since it lacks a coherent body of thought (March, 2011; Heywood, 2017, p. 114). Instead, democratic socialism may be regarded as a “ of ameliorative values and policies” that do not aim at a fundamental break with capitalism (Laibman, 2020a, p. 1-2). A revival of socialism hinges on restoring political confidence, which in turn requires the availability of a positive political vision. This vision will need to be ambitious (promise a substantive break with the existing state of affairs), attractive (guarantee a reasonable quality of life), coherent (be logically congruent), and feasible (have workable social and political institutions that can sustain a reasonable material standard of living). Republicanism may aid in the development of theoretical equipment for socialism that can be employed offensively.

In recent years there has been a growing body of literature devoted to exploring a converging relationship between republicanism and socialism. Mostly, this literature is devoted to exegeses which seek to discover hidden or forgotten republican themes in the writings of historical figures or in social movements (Gourevitch, 2015; Leipold, 2017; Roberts, 2017; Lewis [ed.], 2019; Muldoon, 2019; Thompson, 2019; Leipold, Nabulsi, & White, 2020). This can be seen as a project of ‘socialist republicanism’, a less voluminous branch of what has been termed the “neorepublican research program” (Lovett & Pettit, 2009, p. 13). The normative aspect of this project is severely underdeveloped (which is understandable given that it is only now escaping its embryonic phase), although some basic normative theory is being introduced (Muldoon, 2019; O’Shea, 2019). In order to move this project forward, normative arguments and proposals need to be developed and fleshed out.

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Toward this purpose, I will draw from the conceptual repository of republicanism in order to define the parameters by which I will subsequently review diverse socialist proposals and attempt to piece together a normative institutional framework of ‘socialist republicanism’ or, if one prefers, ‘republican socialism’.1 This should give socialist political actors the sense of direction and confidence that is needed to restore offensive initiative.

The republican conceptual repository lends itself to various interpretations, and has thus been employed in service of widely diverging political positions, from radical labourism to liberal republicanism (Gourevitch, 2015; Irving, 2017). Republicanism is not intrinsically wedded to any particular ideology and due to the limitations of this thesis I will not attempt to see if a form of socialism must logically and necessarily follow from republican premises—although I suspect it does not. The justification for investigating the possibility of a union between republicanism and socialism lies in the attempt to rehabilitate socialism. I proceed from the assumption that republicanism can potentially positively influence the attractiveness and viability of socialism, which I will seek to test by designing an institutional arrangement that reflects republican and socialist values. Herein I will not discriminate between neo-Roman and neo-Athenian concerns, but focus broadly on republican values, particularly a mixed constitution, civic virtue, republican , and self-government.

The aim of this thesis is not to add to the already abundant pile of critiques of capitalism but instead to discuss positive alternatives to capitalism. This may be regarded as putting the cart before the horse but we have good reasons to investigate the functional feasibility of a republican socialism before we flesh out normative arguments in favour of it. We cannot afford delegating the task of designing socialism to spontaneous historical processes alone. This would presuppose that a workable—and in relation to capitalism, comparatively superior—socialism must necessarily follow from the concerted efforts of, the traditionally so regarded, as subject (i.e. the subjective bearer of the objective world-historical development toward communism).2 To do so is to put faith in untested assumptions, which runs afoul of claims to ‘’. After all, it makes little sense to devote considerable energy to the realisation of socialism only to in the end having to find out that some of the difficulties in implementing socialism will cause it to collapse back into capitalism. Especially in light of the failure of actually existing socialisms—which suffered from debilitating inefficiencies and bureaucratic political control—we should first of all ask the question what a feasible socialism could look like. Rather than an afterthought this should be a priority for those interested in socialist revival.

1 ‘Socialist republicanism’ and ‘republican socialism’ may be taken to indicate a differentiation of emphasis, or they could be used interchangeably. I prefer ‘republican socialism’ since it fits neatly when we discuss ‘’, ‘democratic socialism’, or ‘’. 2 The dialectical process of ‘Aufhebung’ (sublation), in which qualitative improvement cumulates progressively by cycling through a series of ‘contradictions’, underpins this assumption (see e.g.: Wheat, 2012). We should carefully test the assumption that socialism will be a higher form of human social organisation in theory before we might consider doing so in practice.

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Therefore, the central research question which will guide this thesis is as follows: ‘What could an attractive, coherent, ambitious, and operationally or functionally feasible socialist institutional framework look like that is consistent with republican values?’3 In order to answer this question we will need to define the central values of republicanism and review existing theoretical models of socialism. In the following sections of chapter I, I have elected to concisely summarise the historical and theoretical background of both republican and socialist theory for the purpose of context, clarity, and direction. It is with this background that I will engage to develop a normative republican socialism. Evidently, whenever possible empirical data will be used to ground theory, but this thesis is fundamentally theoretical in nature.

1.2 The Core Values of Civic Republicanism The intention here is not to critically interrogate the axioms of the republican tradition, but rather to provide an outline of its basic . At its most basic core, republicanism is a political tradition stemming from the ancient Graeco-Roman world which argued that government is not the private affair of an but a public concern. This classical republicanism was revived in the renaissance, and again rediscovered in the late twentieth century in academia and re-conceptualised as neo-republicanism (Honohan, 2002, p. 13-111; Laborde & Maynor, 2008, p. 2-3). A central feature of the Roman Republic was the . Political power was dispersed between diverse public organs and its procedures were constitutionally defined and limited in order to curtail the uncontrolled exercise of power (Mouritsen, p. 3, 6-8). Republican thinkers of the ancient Graeco- Roman world saw it thus:

Monarchy, aristocracy, and democracy, according to these writers, are prone to degenerate into tyranny, , and , respectively; but a government that disperses power among the three elements could prevent either the one, the few, or the many from pursuing its own interest at the expense of the . With each clement holding enough power to check the others, the result should be a free, stable, and long-lasting government. (Dagger, 2004, p. 169)

This idea of the separation of powers was recovered in the renaissance and lives on in the conception of ‘trias politica’ (Honohan, 2002, p. 83, 106). The republican conception of derives from its concern for the common good, which sets this tradition apart from liberal , which prioritises individual self-interest above the community. In liberal ideology, the political community should create the preconditions that allow individuals to pursue their own conceptions of good life and permit bargaining between rival private interests in the political arena (Dagger, 2006, p. 155). In republicanism, citizenship is the status that mediates the relationship of the natural person to their political community. Citizens, in the republican conception, should surrender, at least partially, their particular interests to the common good out of civic obligation. It is necessary, then, that citizens experience a sense of to one another as well as loyalty to core political values of the republic.

3 This thesis will thus not focus on political viability.

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This should bind all citizens to a shared future and common liberty. Common social bonds and a shared basis in public life, or civil society, should facilitate the public-spiritedness of the citizenry. This civic virtue safeguards the republic:

If the balanced constitution is the characteristic form of the republic, civic virtue is its lifeblood. Without citizens who are willing to defend the republic against foreign threats and to take an active part in government, even the mixed constitution will fail. must thus engage in what Michael Sandel calls “a formative politics […] that cultivates in citizens the qualities of character that self-government requires” (1996: 6). Constitutional safeguards may be necessary to resist avarice, ambition, luxury, idleness, and other forms of corruption, but they will not be enough to sustain freedom under the rule of law. Replenishing the supply of civic virtue through education and other means will thus be one of the principal concerns of a prudent republic. (Dagger, 2004, p. 170)

To Schnapper (1998), the republic can best be qualified as a “community of citizens” or, as Lovett and Pettit put it, “a community of equal citizens governed by law” (Lovett & Pettit, 2009, p. 22). This community is a political community and rests upon active political participation by the citizenry. Again, this hinges on the willingness to surrender private interests to an extent. However, “[t]his is not to say that republicans believe that citizens would easily or quickly come to agreement about what the common good requires if only government could be freed from the stranglehold of interest groups” (Dagger, 2004, p. 175). Political dialogue is necessary for citizens to develop a conception of the common good, but it is not required that a consensus be formed (Honohan, 2002, p. 222-223). Deliberation is therefore integral to civic republicanism (Peterson, 2011, p. 3-4). The capacity for political dialogue must be nurtured. First, the personal characters of citizens have to be capable of dialogical exchange in order for a culture of political deliberation to emerge; second, the institutional infrastructure of public life has to be capable of acting as an arena for dialogical exchange. This is the basis of self-government in the republican sense (Dagger, 2006, p. 155). In the ‘neo-Roman’ conception self-government is instrumental to ensuring that republican liberty is sustained through political participation; but the ‘neo-Athenian’ republicans also emphasise the importance of political participation in its own right, for the development of virtue in citizens, under the assumption that the social nature of humans can be expressed through political participation (Brest, 1988, p. 1623; Laborde & Maynor, 2008, p. 2-3; Laborde, 2012, p. 6). Freedom, in this tradition, is understood as self-mastery (Laborde & Maynor, 2008, p. 3).

According to neo-Roman thinkers Pettit and Lovett, the republican conception of freedom is the paramount of republicanism (Lovett & Pettit, 2009, p. 18). All other values, such as mixed constitution, civic virtue, and self-government, flow from the republican conception of freedom: they are necessary instruments to secure liberty by acting as checks on arbitrary power. Republican freedom, or sometimes neo-Roman freedom, is defined as ‘freedom from domination’. This means that one is considered free when one is not subject to the arbitrary will of another, or dominated. There are some variant definitions of the same core concept, but in all cases republican freedom emphasises

7 An Institutional Design for Republican Socialism The Socialist Community of Citizens independence from arbitrary power, both historically and theoretically (Dagger, 2006, p. 155). This means that citizens should have a clearly defined range of choices that cannot be violated on the basis of the capricious whims of a principal actor; that is to say, social power should be ‘constitutionally’ limited so that citizens can act in full knowledge of what to expect when they elect to pursue a certain course of action (Lovett & Pettit, 2009, p. 17). Where the actions of free citizens are predictably, transparently, uniformly, and legally limited, it is important that these restrictions prevent social conditions of dependency and track the interests of the affected citizens (Pettit, 2002, p. 56). The government can therefore legitimately intervene in interpersonal affairs—even when they are formally voluntary—to alleviate the dependency of one person upon another (Lovett & Pettit, 2009, p. 21).

Republicanism is, as Pettit (2002, p. 142) puts it, “congenial” to socialism. Neo-republicanism and socialism share the values of active citizenship, a concern for the concentration of wealth, opposition to social relations based in domination, critiques of liberal individualism (Brest, 1988, p. 1623-1627), as well as the universalism of republicanism and the internationalism of socialism. However, republicanism, unlike socialism, has an ambivalent relationship with property. Property is a source of power according to republicanism, and its concentration in the hands of a small segment may allow its members to convert it to political influence at the expense of the common good. Furthermore, commerce promotes particular interests by rewarding the pursuit of private gains in the marketplace materially. Thus the “materialistic ‘virtues’ of commerce” arguably displaced notions of active citizenship and civic pride (Honohan & Jennings, 2006, p. 11). Republicanism, in this sense, “constitutes a movement back to a status society of a strikingly pre-modern form” (Honohan & Jennings, 2006, p. 11). At the same time, republicans saw property as a means to ascertain independence (Gourevitch, 2015, “Greece and Rome in Virginia: as Republican Necessity”; Dagger, 2006, p. 159-160). This was mostly argued in the historical context of small proprietorship and pre-capitalist manufacturing, when all citizens having potential access to was fairly realistic. With the advent of large-scale industrial production and the concentration of capital, radical republicans repurposed the republican conception of liberty. Instead of seeking a redistribution of property into individual hands and households (which was historically untenable due to industrial manufacturing), the labour republicans re-imagined self-control over the means of production in an industrial context (Gourevitch, 2015). These radical republicans emphasised that large segments of the population did not own means of production nor did they have a realistic chance of ever acquiring them; they were therefore dependent upon the owners of means of production. The capitalists were thus able to subject the workers to their private and arbitrary will—a violation of republican liberty. In order to rectify this, production was required (Gourevitch, 2015), or, to borrow a phrase by G.D.H. Cole from another context, “self-government in industry” (Cole, 1920a). Marx similarly employed republican vocabulary of dependency, subjection, and domination in his critique of wage- labour (Leipold, 2020a). He, too, re-imagined individual self-controlled production of pre-capitalist

8 An Institutional Design for Republican Socialism The Socialist Community of Citizens manufacturing—thesis—on the basis of large-scale social labour—antithesis—in the form of communism—synthesis (Chattopadhyay, 1991, p. 13; Wheat, 2012, p. 263; Leipold, 2020a, p. 8-9).4

For there to be a socialist republicanism it must firstly be shown that economic affairs are a public good and therefore that public control over economic resources can be legitimately exercised. Secondly, it must be demonstrated that socialism is capable of sustaining republican values in its social institutions, which will be the primary focus of this thesis. Toward the first point I will put forward the following basic argument: Society and its members—the general public—are dependent upon productive resources for access to means of life, and therefore the manner in which the productive resources are employed should be subject to stipulations by the public through its political institutions. That is, the economy is a public good which should be subject to some form of public control. This argument differs from the labour republican argument that workers become dependent upon a capitalist, since there the focus lies with the interpersonal dimension of the employer-employee relationship. Rather, my argument posits that the private wills of economic actors, particularly capitalists, can shape the entire course of a society, including, crucially, its government, through nothing but their capacity to direct productive resources on the basis of their private wills (Scott, 2006, p. 87-89). This, then, is also a distinct argument compared to those that emphasise how the ‘structural domination’ of property subjugates workers impersonally (Muldoon, 2019, p. 7-8), since it accentuates instead how the sum of private wills drives the allocation of resources as well as public policy at the expense of the common good and therefore potentially at the expense of public welfare—i.e. it centres the common good and public welfare and frames the latter as a republican concern.5 A society regulated by the sum of private wills may be more unstable, which mirrors republican concerns that saw the capturing of the state by private interests as a threat to stable long-lasting government. If we conceive of ‘the economy’ as a public good, then the unfettered reign of private wills in the is illegitimate. This is especially true when the weight of respective private wills depends on vastly unequal access to assets and resources, since this produces an imbalance of power.

4 In Marx’s own words: “The capitalist mode of appropriation, the result of the capitalist mode of production, produces capitalist . This is the first negation of individual private property, as founded on the labour of the proprietor. But capitalist production begets, with the inexorability of a law of Nature, its own negation. It is the negation of negation. This does not re-establish private property for the producer, but gives him individual property based on the acquisition of the capitalist era: i.e., on cooperation and the possession in common of the land and of the means of production” (Marx, 1867).

5 Neo-republicans have sought to disassociate from the ‘’ that the emphasis on the common good in classical republicanism implies (Lovett, 2018, “4.3 Civic virtue and corruption”). The degree to which the common good can be regarded as an instrument for securing common liberty or as a value in itself stretches beyond the scope of this thesis. Yet it is rather fundamental to the question of public welfare as a republican concern. For now it should be taken as a postulation that warrants both elaboration and close and critical examination in the future.

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It is with the core republican values—of self-government, mixed constitution, the common good, civic virtue, and republican liberty—in mind that I will attempt to craft an institutional framework for a socialist society. Thus, for there to be a republican socialism one would need to demonstrate that a socialist society can accommodate public bodies whose respective discretionary authority can be codified, limited, and balanced, to check against one becoming a source of domination. Furthermore, such a socialist model would need to encourage public-spiritedness, active participation, and sensitivity to the common good. The curtailment of commercial imperatives—which reward and reinforce narrow private interests—is a sound objective, then. Above all, a socialist republic will need to safeguard republican liberty, encouraging both self-mastery and independence from arbitrary power.

1.3 The Socialist Mode of Production in Theory and Practice The lineage of ‘modern socialism’ can be traced back to both utopian ‘proto-socialism’ and radical republicanism (Moss, 1976, p. 2; Moss, 1993, p. 391-392). It is in particular indebted to the ‘Babouvists’, advocates of the political thought of their contemporary, Gracchus Babeuf, a radical republican during the French and widely considered the ‘first revolutionary communist’ in history (Higonnet, 1979). The radical republicanism and the socialism which sprang from the ‘Babouvists’ took shape in response to the concrete conditions of their time (Muldoon, 2019, p. 4). Marx provided a theoretical foundation to this political movement (Chattopadhyay, 2005, p. 5,629) and combined French socialism with British political economy and German , as Lenin (1913) simplified. Marx’s political theory and strategy borrowed from the republican tradition in a number of ways as well, particularly its critique of wage-labour expressed in a vocabulary familiar to republicanism and advocacy of self-government (Roberts, 2017; Leipold, 2020b). Marx’s ideas, summarised under the term ‘’, gradually eclipsed rival radical political movements, such as the Owenites, Proudhonists, Bakuninists, Babouvists, and Lasallians. It seemingly remains the most popular coherent socialist body of thought in the world today. Logically then, Marxism will take centre stage in this thesis, by taking its theoretical and political principles as the point of departure for most of my discussions which contrast republican socialism with existing schools of socialist thought.

Marx theorised that communism would emerge from the concrete material ‘contradictions’6 of capitalist society—rather than socialism being a moral theory, abstracted from socio-historical conditions. According to Marx, history moved through an intelligible pattern (Sheehan, 1993) which could be made accessible through the lens of a dialectical and materialist method (Wood, 1995). Large- scale industrial manufacturing in nineteenth century Europe dispossessed the immediate producers who had hitherto employed their individually owned and controlled means of production at their leisure. Individual labour was replaced by expansive socialised mass production. Despite the labour process attaining a social and collaborative character, the pattern of ownership did not fundamentally alter, it remained ‘individualised’ or ‘private’ (Engels, [1880], p. 310). The workers were thus subjugated to the 6 That is: the “opposition of structural principles” (Giddens, 1990, p. 145).

10 An Institutional Design for Republican Socialism The Socialist Community of Citizens will of capitalists (Leipold, 2020a, p. 3). This structural feature of socialised labour and private or capitalist appropriation is, per Marxist theory, the primary contradiction of capitalist society, and the source of social antagonisms between the proletarian class and the capitalist class (Engels, [1880], p. 310-311).

In capitalism, different units of social production—enterprises, for simplicity’s sake—exist that execute their tasks in mutual independence. The production of commodities often requires the productive contributions of several autonomous units of production through which commodities pass before being available for end use. ‘Autonomous’, here, is the operative word (Chattopadhyay, 1994, p. 46). The coordination of social production between different units is achieved through bargaining, bidding, and exchange of commodities on the market, rather than directly through social links and a comprehensive social plan. As Chattopadhyay explains: “[I]n a society of generalised production, where products result from private labours executed in reciprocal independence, the social character of these labours—hence the reciprocal relations of the creators of these products—are not established directly.” And therefore “[t]heir social character is mediated by exchange of products taking commodity form” (Chattopadhyay, 2005, p. 5,630). It is only where social labour is indirect that products need to assume the form of a commodity in market exchange. According to Marxist theory, this gives rise to the so- called ‘’, arising from the of capitals, which thus acts as impersonal disciplinary mechanism, driving down the quantity of abstract labour-time used in production to the social average (Tsushima, 1956). Consequently, “[w]ith the inauguration of the [socialist mode of production] there begins the process of appropriation of the conditions of production by society”, which means that “with the end of private appropriation of the conditions of production there also ends the need for the products of individual labour to go through exchange taking the commodity form. In the new society individual labour is directly social from the beginning” (Chattopadhyay, 2005, p. 5,630). If coordination of social production happened directly through social relations, then products would not need to be subjected to exchange to realise their social character and would therefore never be transformed into commodities at all.

The antagonistic opposition of the social classes in capitalism would produce , which, according to Marxism, will assume a political struggle for supremacy, and ultimately permit the to seize state power. Since the source of conflict rests on the objective separation of the producers from the means of production—a condition that would be universalised through the expansionary tendency of —the struggle for political power would, in theory, also assume a universal scope. All means of production, therefore, would be transformed into public property, and through this social production would be brought into harmony with the property relations (Engels, [1880], p. 323). This ‘harmonisation’ entails that the social character of production would no longer be limited to within units of production but encompass society as a whole. In other words, the social character of production is given the “freedom to work itself out” (Engels, [1880], p. 325).

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Thereby, the ‘’ of market forces—a secondary contradiction of capitalism—would be replaced by the collaborative and planned organisation that is already present within the units of production (Engels, [1880], p. 323, 325)—albeit presently orchestrated at the behest of the capitalist and not by the producers themselves.

In communism, as Peter Hudis (2005) explains, “[p]roduction is now geared for use, not for augmenting value. Indirect social labor, based on the value-form of mediation, is replaced by direct social labor, based on ‘transparent’ interpersonal relations between the producers.” This is so because in communism the coordination of production would be managed by a cooperative association of producers that will encompass all units of production in society (Bukharin & Preobrazhensky, 1920) and therefore, in , “there will be no -capital at all in the first place, nor the disguises [prices] cloaking the transactions arising on account of it” (Marx, [1885], p. 314). Indeed: “According to nineteenth-century socialist views, socialism would function without capitalist economic categories—such as money, prices, interest, profits and rent—and thus would function according to laws other than those described by current economic science” (Bockman, 2011, p. 20).

Engels likewise described the course of the revolution as follows: “[W]hen all capital, all production, and all exchange are concentrated in the hands of the nation, private ownership will automatically have ceased to exist, money will have become superfluous” (Engels, 1847, p. 351), or:

From the moment when society enters into possession of the means of production and uses them in direct association for production, the labour of each individual, however varied its specifically useful character may be, becomes at the start and directly social labour. The quantity of social labour contained in a product need not then be established in a roundabout way; daily experience shows in a direct way how much of it is required on the average. Society can simply calculate how many hours of labour are contained in a steam-engine, a bushel of wheat of the last harvest, or a hundred square yards of cloth of a certain quality. It could therefore never occur to it still to express the quantities of labour put into the products, quantities which it will then know directly and in their absolute amounts, in a third product, in a measure which, besides, is only relative, fluctuating, inadequate, though formerly unavoidable for lack of a better one, rather than express them in their natural, adequate and absolute measure, time. (Engels, [1878], p. 294)7

Communist society, then, is first of all the product of the objective-material contradictions between the level of development of the productive forces and the production and property relations, as opposed to abstract subjective-moral philosophy. In the words of Bordiga (1920):

7 Or in Marx’s words: “Within the collective society based on of the means of production, the producers do not exchange their products; just as little does the labour employed on the products appear here as the value of these products, as a material quality possessed by them, since now, in contrast to capitalist society, individual labour no longer exists in an indirect fashion but directly as a component part of the total [social] labour” (Marx, [1875], p. 85).

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communism presents itself as the transcendence of the systems of which seek to eliminate the faults of social organisation by instituting complete plans for a new organisation of society whose possibility of realisation was not put in relationship to the real development of history.

Beyond a few informative sketches neither Marx nor Engels ever published a detailed blueprint of how communist society would work, however (Gluckstein, 2011, p. 32; Leipold, 2020b, p. 175-176). British socialists, such as G.D.H. Cole and S.G. Hobson, did, on the contrary, sketch the institutional outlines of their socialism (Hobson, 1914; Cole, 1920a; Cole, 1920b). Their system involved sectoral ‘’: industrial associations democratically managed by their members, tasked with self- government of their industries, under co-management with the state (Cole 1920a). It was based on cooperation, but without relying on comprehensive social planning in the communist sense. Therefore, it retained money, although competitive markets were abolished, or at least restricted, through guild control over commodity exchange. These works had little concern for the details of allocation and planning, as they were, by and large, contextually bound to the pre-Soviet era (save for, say, Cole’s 1935 work ‘Principles of Economic Planning’).

After the Russian Revolution of 1917 interest in the articulation of schemes was aroused, in the context of the difficulties of ‘’ and the attacks, in 1920, by right-wing liberal Von Mises who had turned Marx’s and Engels’ argument on its head. Where they had believed that prices mystified what could be understood simply and transparently if only labour were executed under direct social association instead of indirectly through market transactions, Von Mises argued that market prices were crucial to economic decision-making. Economic calculation, under socialism, would be impossible, he concluded (Von Mises, 2012). Von Mises’ compelling argumentation encouraged socialists to counter, spawning the so-called ‘economic calculation debate’. The first socialist who sought to tackle Von Mises’ arguments was Neurath, who believed that calculation in-natura, through material input-output tables, was capable of functioning as a rational and objective economic indicator to guide decision- making (Cockshott, 2008). Others, like Lange, Lerner, as well as Taylor, in the 1930s, believed that socialism could operate rationally by means of an ‘artificial’ market controlled by a Central Planning Board (henceforth CPB),8 within a wider context of public ownership (Lange, 1936; Lange, 1937; Kowalik, 1990, p. 147-148).

From 1928 onwards, the enacted central planning, using ‘Five Year Plans’ (Nove, 1992, p. 143). Initially, the centrally mandated mobilisation of resources allowed the Soviet Union to increase industrial output rapidly (Nove, 1992, p. 195) impressively turning it “from being the most backward country in Europe to the ranks of a global ” (Schweickart, 2002, p. 58-59). From within the Soviet Union, using the real-world experience of economic planning, Kantorovich developed linear programming, an algorithmic technique to maximise output given a set of constraints. It was used to

8 ‘CPB’ will be used for all planning authorities, whatever the varied form they may assume in different models.

13 An Institutional Design for Republican Socialism The Socialist Community of Citizens calculate in physical terms the optimal means to achieve a given plan target (Cockshott, 2008, p. 17- 19). However, it could not be used on an economy-wide scale, since resolving the many equations was too complex and, additionally, it would require an estimation of consumer demand beforehand, i.e. the mix of goods that would need to be produced over a given plan period. Nevertheless, initially, the mobilisation of resources was relatively successful, and the complexity of economic planning was mitigated because it dealt particularly with large strategic priorities (raw materials, capital goods, heavy industry).

When the transition to a consumer good and innovation driven economy had to be made, the shortcomings of Soviet-style central planning came to a fore (Nove, 1992, p. 366, 390). Gradually, in the second half of the twentieth century, growth rates declined and stagnated when the benefits of the resource mobilisation strategy wore off (Chattopadhyay, 1994, p. 88; Nove, 1992, p. 389). Even from within the Soviet Union confidence in central planning was waning. Soviet policy makers saw themselves forced to introduce minor ‘market reforms’, in particular in 1965, 1979, and 1987, which attempted (rather unsuccessfully) to increase enterprise or managerial autonomy, among other measures (IMF, 1991, p. 26-27; Nove, 1992, p. 382-383, 394; Whitefield, 1993, p. 44-45, 50; Laibman, 2020b). The dissolution of the Soviet Union and other Marxist-Leninist regimes in the 1990s signified the end of trust in economic planning, including more moderate forms thereof (Heywood, 2017, p. 22). By word of its then chairman Fuwa Tetsuzo, the Japanese expressed support for (Tetsuzo, 2002). Similarly, the Communist Party of Bohemia and Moravia (KSČM) states that “In our view, the socialist economy will be a with strategic planning” (Kscm.cz, 2016).9 The Communist Party of Greece (KKE), in contrast, still maintains its in central planning in conjunction with “workers’ control” (Inter.kke.gr, 2016). While no complete data set is available, the KKE appears increasingly isolated on this question among the remaining ‘official Communist Parties’.

In the 1980s and 1990s we see somewhat of a proliferation on academic literature dedicated to questions of how socialism should be organised economically.10 The failure of Soviet-style central planning forced theorists to re-think their commitment to comprehensive social planning. Some socialist theorists leaned into the criticisms of central planning and integrated market competition into their models, among them Schweickart (2002) and Nove (1991); other theorists were somewhat more reluctant.

9 Translated using Google Translate, January 14, 2020. 10 ‘Proliferation’, here, is relative. Despite the enormous importance of this question to the socialist movement—especially since the collapse of actually existing socialism—discussions of alternatives to capitalism remain very much a niche within a niche: only a handful of socialist theorists have attempted to formulate alternatives (see e.g.: Campbell, 2012). In addition to theoretical difficulties, few people outside of academia pay attention to these discussions. They are ignored by more or less everyone else, including leaders, theorists and strategists, policy makers, and the general public.

14 An Institutional Design for Republican Socialism The Socialist Community of Citizens

According to Devine, a conceptual distinction should be made between market exchange and market forces, permitting the former but exuding the latter from his model of ‘democratic planning’ (Devine, 2002, p. 76). His model is probably most similar to that of Albert and Hahnel (1991), which they style ‘’ or ‘parecon’, and Laibman’s model of ‘democratic coordination’ (Laibman, 2002a), since their primary allocative mechanism is the iterative negotiation of inputs and outputs. To Albert and Hahnel, production plans should be designed by producers and consumers putting forward proposals on how much they intend to produce and consume each year on the basis of indicative prices, with an ‘Iterative Facilitation Board’ matching supply and demand. After the plan is approved, however, price adjustments based on excess supply or demand will still have to be made, artificially mimicking the mechanisms of the market (Hahnel & Wright, 2016, “How Marketish Are “Adjustments”?”).

Cockshott and Cottrell, both of whom have backgrounds in computer science, articulated a central planning which uses new means of computing technology for strategic and macro-economic planning, with democratic input, in combination with a ‘micro-economic’ artificial market for consumer goods (Cockshott & Cottrell, 1993). The phrase ‘artificial market’—not used by Cockshott or Cottrell—is borrowed from Fotopoulos, who describes his anarchist model of a socialist society as an ‘’ (Fotopoulos, 1997). In his view, society should be stateless and marketless, but retain non- circulating vouchers whose value is determined by an automatic price mechanism based on supply and demand. An influence on Fotopoulos, ([1957], p. 90-155) had, already in the 1950s, formulated a theoretical model of workers’ control over the economy based on economic planning, but he rejected the notion that this would be a complicated challenge and believed that it merely required a simple technical coefficient or two. He too permitted a role for ‘tokens’ and a market for consumer goods in his system.

All these models, and the questions that they seek to answer, can ultimately be reduced to the so-called fundamental economic problem: the manner in which finite resources can be apportioned to optimally satisfy human wants and needs. This problem branches off into a multitude of secondary problems. These secondary problems arise from the manner in which the primary economic problem is dealt with. When evaluating institutional models based on their compatibility with republican values we will evidently also discuss their functional feasibility. The views of Nove that emphasise the need to use realistic and reasonable standards of feasibility are helpful on that front. To quote him at length:

It is my contention that Marx had little to say about the economics of socialism, and that the little he did say was either irrelevant or directly misleading. The word ‘feasible’ is in the title of this book as a kind of flank guard against utopian definitions. One can, if one chooses (and, as I shall show, many have so chosen), define socialism in such a way that economic problems as we know them would not, indeed could not, exist. If one assumes ‘abundance’, this excludes opportunity-cost, since there would be no mutually exclusive choices to make. If one assumes that the ‘new man’, unacquisitive, ‘brilliant, highly rational, socialised, humane’, will require no incentives, problems of discipline and

15 An Institutional Design for Republican Socialism The Socialist Community of Citizens

motivation vanish. If it is assumed that all will identify with the clearly visible general good, then the conflict between general and partial interest, and the complex issues of centralisation/decentralisation, can be assumed out of existence. If human beings in society can see ex ante what needs to be produced and the correct way of producing and utilising all products, then there is no need for ex post verification; the indirect and imperfect link between use-value and exchange-value, via exchange relations and the market, can be replaced by direct conscious human decisions on . Division of labour will have been overcome, by ‘brilliant’ multipurpose human beings. ‘While not everyone may be able to paint as well as Raphael, everyone will be able to paint exceedingly well.’ Everyone will govern, there will not be any governed. Since all competing interests will have disappeared, there will be no need to claim rights of any sort, no need for restrictive rules, laws, judges, or a legislature. Of course, there will be no state, no nation-states (and so no foreign trade, or any trade). The wages system will have gone, as well as money. (Nove, 1991a, p. 11)

To Nove, a feasible socialism means that “it should be conceivable within the lifespan of one generation”, “without making extreme, utopian, or far-fetched assumptions” (1991a, p. 12). We will use this broad standard of feasibility as we move forward.

16 An Institutional Design for Republican Socialism The Socialist Community of Citizens

Chapter II: Public Administration in the Socialist Republic

2.1 The Social Contract and Socialist Constitutionalism Socialism is based on of the means of production, which means that the conditions for their use are stipulated by society—or more accurately, the political institutions that are placeholders for society as a whole. The role of political institutions in relation to discussions of the feasibility of a socialist mode of production should therefore not be sidestepped. It is essential that the political institutions in a socialist society remain instruments of self-governance by the citizenry, so that corruption in the republican sense—the capturing of public bodies by particular interests—does not occur. Individual ownership of property cannot provide a degree of security against government encroachment of independence in socialism, since all (productive) property belongs to the political community.11 According to liberal critics belonging to the Austrian school, this means that socialism will inevitably lead down a path toward , or as Hayek put it ‘the road to serfdom’ (Makovi, 2016). Democracy is supposed to be a means to limit state power, while socialism would supposedly require absolute state power in order to subordinate all economic activity to a single authority, making the notion of a ‘democratic socialism’ logically incoherent. One would have to give way to the other: either democracy or socialism would in the end survive.

If political power is usurped by a particular group they would have immediate access to society’s productive resources. The means of production would effectively be monopolised by said group. If the risk associated with socialism is power becoming concentrated in the centre of political authority then republicanism, with its emphasis on freedom secured by self-government and the separation of powers (among other measures), could prove useful in addressing this critique. Socialism would need to integrate republican institutional checks in its public institutions. The objective of a socialist theory of self-government is therefore to find institutional devices that should ensure that political power cannot become concentrated in a particular section of the population and thereby erode socialism. This chapter will discuss the political institutions and complementary practices and procedures that are appropriate to a socialist commonwealth. I will argue that a republican system of government and ‘socialist constitutionalism’ are necessary preconditions to ensure that socialism is sustained. This section will focus on the latter.

Constitutionalism is associated with , particularly with the founders of the republic of the United States of America (Waluchow, 2018), and not so much with socialism. To moderate republicans influenced by liberalism, such as Hamilton, democracy needed to be limited in order to secure certain natural rights by placing them beyond the scope of democratic decision-making. Constitutional limits on legislation are crucial to this aim, but representation also plays a role. The republican tradition places emphasis on virtue and character, and Hamilton believed that representatives would “most

11 A brief discussion of the property relations will follow in section 3.1.

17 An Institutional Design for Republican Socialism The Socialist Community of Citizens likely” be endowed with “enlightened views and virtuous sentiments” which makes them “superior to local prejudices” (Hamilton, 2007, p. 46). This is more or less the mechanism in contemporary , where professional politicians are supposed to translate popular sentiments into balanced policy proposals, weighing popular demands against financial and constitutional viability. To Hamilton, the structure of the republic was intended as “remedy” against “diseases”, i.e. potential popular demands “for an abolition of debts, for an equal division of property, or for any other improper or wicked project”. Should such demands surface, various built-in checks and balances would limit and isolate its spread, immunising the republic from self-defeating popular demands (Hamilton, 2007, p. 46). This conception of representation, constitutionalism, and republicanism as an aristocratic check on the radical temperaments of the working classes is the root of anti-republican bias in socialism (e.g.: Cockshott & Zachariah, [1989], p. 54-57; Chomsky, 1999, p. 47-48). Modified versions of this argument persist today and caution against ‘mob rule’ or ‘ochlocracy’: Unfiltered public sentiment, such as popular prejudice, will cause the majority to disregard and vote away the rights of minorities or pursue economically short-sighted and self-destructive ends (Lewis, 2011, p. 1; Bolton, 2013, p. 1). Democracy is supposed to act as a limit on state power, and conversely, democracy is supposed to be limited by constitutional constraints.

It should be stressed that the republican tradition also emphasises dialogue and deliberation. This does more than merely provide an additional institutional platform to express intolerance or prejudice. By confronting parties with opposing views, it allows room for nuance and . Popular participation, far from amplifying prejudice, will likely help to break it down and facilitate the finding of common ground and enhance public civility (Walsh, 2007, p. 45, 56-57; Weatherford & McDonnell, 2007, p. 196). However, this requires certain preconditions, such as the use of public talk in which conflicting opinions can be mediated and reformulated, or the dissemination of information by experts in a non-authoritarian way (Walsh, 2007, p. 46-47; Weatherford & McDonnell, 2007, p. 210). With sound institutional mechanisms that facilitate deliberation, direct self-government by citizens may well be feasible. The liberal scepticism toward citizens governing themselves directly may be overstated, then. Even so, the rights of minorities and individuals are not guaranteed through deliberative decision- making alone. For this reason, it would nevertheless be necessary to place certain fundamental rights beyond the scope of immediate democratic control through constitutional constraints on legislation. While we may entrust the citizenry with considerably more political authority than they are endowed with in liberal democracy, we should not advocate unchecked either.

Let us turn to the role and scope of political institutions in society in general, and in relation to socialism in particular, which will clarify the proposition above more clearly. A republican socialism will stress the need for centring citizenship. It is important that individuals do not relate to one another merely as consumers and producers, regarding others as means to their own immediate economic interests, but instead consider themselves part of a greater community. The particularism of narrow

18 An Institutional Design for Republican Socialism The Socialist Community of Citizens material self-interest would otherwise shape their outlook at the expense of the common good. The political community will therefore have to play a pivotal role in a republican socialist society and economy.

Fotopoulos correctly criticises the Albert-Hahnel model (introduced briefly in chapter I) for relying exclusively on producers and consumers for decision-making. In their model, the principal (in fact, the only) decision-making bodies are producer and consumer councils. However, Fotopoulos argues, since “people as workers may have conflicting ideas, views and possibly even interests with people as consumers”. Thus, a public body is required to express the general interest, which, in inclusive democracy, is a general community assembly within the context of a , while “the particular interests [are expressed] by workplace assemblies, education establishments’ assemblies, etc”. This supposedly transcends “the division between the general versus the particular interest”, which implies that social conflict of this nature cannot arise (Fotopoulos, 2003, p. 439). In a stateless commonwealth, the legislative powers of political institutions would be limited to decision-making regarding collective infrastructure and public goods—the ‘administration of things’, rather than rule over people, ‘the administration of people’. This conception is shared by Marxism and anarchism. For example, according to Bordiga, a Marxist theorist, there is no need for a state “when society as a whole becomes the master of its conditions of existence”, i.e. communistic, since it is no longer “torn by internal antagonism” (In Crump, 1987, p. 134). Regulation of the social activities of citizens would be tantamount to state power. Instead, social activities in a stateless society would be self-regulated, although not ‘anarchically’, but instead on the basis of mutual social trust, free agreement, reciprocity, and association (Holterman, 1980; Holterman, 2012, p. 10-13)—more or less what Proudhon saw as a voluntary ‘social contract’ (Proudhon, [1851], p. 562-564).

Yet, of course, the polity, in the name of the general interests of society, should at times overrule the particular interests of the workplace or local community. Even in socialist society people will express competing perceptions of the common good or put forward mutually exclusive particular interests, which will have to be mediated, but also ultimately enforced if need be. In this respect a republic is better suited than a stateless community, which will more likely rely on ad hoc methods of enforcement or customary law, and is therefore more susceptible to arbitrary uses of power.12 A republic, by contrast, has its codes of civil conduct established clearly, uniformly, transparently, and enforced by an accountable public body.

It is conceivable that the polity will place demands on a sectional organisation which the members of said organisation consider unreasonable and excessive, which is a source of social conflict. When the

12 We have no experience with large-scale, urbanised, or multicultural communities that are primarily governed by customary law. It would be more difficult in such a community to distil coherent and widely practised customs that could function as the basis for law. This could lead to a patchwork of jurisdictions—since disparate customs are situated in close proximity—and therefore arbitrary power.

19 An Institutional Design for Republican Socialism The Socialist Community of Citizens conflict cannot be mediated it could cause strike action by workers, as happened in socialist Yugoslavia: Logically,

In a purely competitive and ‘free’ self-management system, workers would have no reason to strike against themselves. In practice, nonetheless, the high degree of government intervention in enterprise affairs provoked adverse reaction in workers. Workers were striking not against enterprise, but against government policy. (Liotta, 2001, p. 6)

Evidently, the Yugoslav state was not an arena in which the common good could be established through deliberative dialogue by citizens since they had “no real influence—despite the claims of the (one- party Marxist) state—on decision making, production process, or social policy” (Liotta, 2001, p. 8). Nevertheless, even in a political community ruled through deliberative and participatory decision- making by the citizenry we might realistically expect that workers in a given production unit will occasionally object to stipulations of the community without a possibility for reconciliation. Without means to enforce a final decision, taken by a legitimate public body which takes into account both particular and general interests, such a polity may quickly become dysfunctional.

To emphasise this further, let us turn to another example. In libertarian socialism local bodies would operate autonomously and their decisions would be coordinated and enforced by voluntary association alone, i.e. the ability to opt out. Interdependency and reciprocity between so-called ‘free associations’ of communities and workplaces would be the glue that holds the system together (Van der Walt & Schmidt, 2009, p. 67-70). Decentralisation, however, cements inequality between communities. If one community possesses access to particular resources, natural or otherwise, which benefit an entire society, then they might potentially have the ability to hold the rest of society : such resources could effectively be monopolised by one community. This is far from a hypothetical scenario. For instance, in the Russian Revolution:

Railways which ran on wood-fired steam engines had acquired plantations of trees to supply fuel. Local peasants seized the plantations as part of ‘their’ village’s land; and by doing so stopped the railways. Some decisions can be and should be taken locally. In relation to others, attempting to take local decisions is, in fact, for the locals to decide for everyone else that there shall not be a railway, or electricity supply, or an internet, or whatever the large-scale infrastructure item involved is. (Macnair, 2005)

A degree of centralisation is required to ensure that resources needed by all are controlled by the political community, as representative of the common interests of society as whole. Central control by a public body would be an effective safeguard against particular interests threatening the coherence of the system. At the same time, it is not necessary that all decision-making should pass through the centre, of course, since this would be inefficient. Socialists have tended to advocate the principle instead (e.g.: Devine, 2002, p. 75). Subsidiarity is the principle that decisions should be made at the most immediate scale at which they affect matters—i.e. local matters locally, regional matters regionally, central matters centrally. Some central decisions should be binding on all regional and local

20 An Institutional Design for Republican Socialism The Socialist Community of Citizens public bodies in order to achieve the aims of the decision. In such circumstances a republican regime has at its disposal (constitutionally defined and limited) tools to enforce a final decision after independent arbitration. Thus, in terms of the scope and role of political institutions, there should be both a public body which exercises over the general interest and the means to enforce final decisions.

The enforcement of law, in republicanism, is legitimate insofar as it tracks the interests of the affected citizenry, as we noted in chapter I. If legal regulations reflect the preferences of voters then libertarians (of both the left and right-wing variety) might object that enforcement would be redundant. If law truly reflects the preferences of individuals then they should not have to assume legal force: Individuals would voluntarily act in accordance with their own preferences—or else they would not be their preferences. Republicanism could be charged with paternalism and elitism, therefore, by implying that the true preferences of the citizens are known by legislators and not by citizens themselves.

However, we have to take into account that human psychology is somewhat more complex. To illustrate this I will draw on the concept of the ‘higher-order volition’. Also known as second-order preferences, they entail one’s preferences about one’s preferences. For example, an addict’s first-order preference or lower-order volition may be for continued use of their substance; but a higher-order volition or second-order preference may be to not have this preference in the first place (Frankfurt, 1971). Similarly, predictably irrational choices are widely observed (Hama, 2010). One example includes a pension scheme with an opt-in and opt-out variant. When employees in a firm were given the option to opt into the pension plan, few did. This may be taken as an indication that they made the measured choice for another option elsewhere. When the same employees were all signed up to the plan by the default and asked to opt out if they disagreed, few again did so. While these employees would benefit from a pension plan (a second-order preference), this experiment indicates that they are scarcely willing to expend the mental energy to follow through on their higher-order volition (Thaler & Benartzi, 2007). ‘Paternalistic’ provisions of universal social security—which can be effectively achieved within the context of a state—would fulfil the second-order preferences of citizens but universal coverage would not follow from individual free choice alone. The uncontrolled exercise of lower volition preferences would likely result in a society with lower public welfare; and, crucially, not as a matter of preference, since the citizens of such a society would prefer a different outcome (a society with more stability, security, longevity, and so on, through the universal provision of certain social services).

In relation to socialism, we might argue the following. In a model of socialism which retains market competition, the members of a workers’ cooperative may pursue the relative maximisation of income by behaving competitively in an aggressive market, since this is the means by which they can assure their livelihood. They prefer, therefore, to take part in competition—and thereby reproduce the system of free competition—over the immediate other alternative also available to them: operating at a loss,

21 An Institutional Design for Republican Socialism The Socialist Community of Citizens and in due time, bankruptcy. One might superficially conclude that this is a matter of free choice (and, moreover, that it is the economically sensible thing to do), and should hence not be interfered with. Yet, a higher-order volition of all workers may be the preference for a system in which their livelihood does not depend on competition but on cooperation instead. In a competitive market, workers would be structurally or institutionally compelled to behave competitively to guarantee their livelihood but that is not to say that they prefer these institutional rules that shape their choices in the first place. 13 Even if cooperation is preferred over competition by all, or at least the majority of society, it may not be the outcome of the aggregate of individual decisions, therefore.14

In a socialist model based on voluntary cooperation, capitalism may re-emerge in a similar manner. Members of a wealthy cooperative may at one point sub-contract unemployed workers and attempt to undercut other to expand their wealth further. In this way they could, at least momentarily, benefit from both competition (by undercutting their competitors) and cooperation (insofar their competitors are, for the moment, still committed to cooperation). The fragile cooperative equilibrium would collapse and stimulate a race to the bottom. Even if it is not consciously willed by the majority in society, many would feel forced to take part in it to assure their livelihood.

It would be necessary to enforce cooperation—a second-order preference—at the central level through a pact that is binding on all associations and communities. The conditions of this pact, which ought to be included in the constitutional order, will need to be formulated by the members of society themselves through direct legislation and subject to periodic re-deliberation. This pact is only effective insofar as the citizens themselves formulate the conditions, to guarantee that it tracks their interests, and to prevent particular interests (e.g. those of bureaucrats) from capturing public bodies.15 This is the nature of the ‘social contract’ under a socialist constitutional-republican order: It does not exist as an aristocratic check on democracy, nor as a means to gain security in exchange for surrendering absolute freedom, but rather as a means to secure socialism. This is necessary since the outcome of the sum of individual choices cannot guarantee the durable reproduction of socialism. Socialist constitutionalism can hence be regarded as a non-elitist answer to liberal constitutionalism. The next section will address how citizens may feasibly formulate the laws of their society through direct legislation.

2.2 The Political Institutions and Practices of Self-Government Socialists and republicans have generally shared a commitment to self-government. Marx and Engels saw in the First French Republic as well as the , and more generally the democratic

13 This is of course a theoretical argument, not an empirical one. 14 Engels similarly stated: “For what each individual wants is obstructed by every other individual and the outcome is something that no one wanted” (Engels, [1890], p. 35). 15 To reiterate, in republicanism: “The promotion of freedom as non-domination requires, therefore, that something be done to ensure that public decision-making tracks the interests and the ideas of those citizens whom it affects; after all, non-arbitrariness is guaranteed by nothing more or less than the existence of such a tracking relationship (Pettit, 2002, p. 184).

22 An Institutional Design for Republican Socialism The Socialist Community of Citizens republic, with its institutions of democratic participation and direct legislation, a prefiguration of the transitional regime—which may be called the “ of the proletariat” or “social republic” (Leipold, 2020b, p. 175). According to Engels, communists were right to celebrate the French Republic under Jacobin rule (Engels, [1845], p. 2); to Marx, the proletarian regime begins with “the self- government of the commune” and would encompass the entire population of a given nation (Marx, 1874).16 They characterised the democratic republic as “the specific form of the dictatorship of the proletariat” (Engels, [1891b], p. 227) and identified Jacobin-rule during the and the short-lived as such revolutionary (Engels, [1845], p. 2; Marx, [1847], p. 320; Marx, [1871b]; Engels, 1891a). In their view, however, the ‘social republic’ is a tool for proletarian class supremacy, and once the social transformation has been consolidated, the institutions of self-government lose their coercive functions and become free and voluntary associations that administer things rather than people (Engels, [1880], p. 321).17 Communism, at least according to Marxist theory, is a stateless society. However, even in the absence of class antagonisms, as I have argued, society will require political authority. This political authority will—in addition to being defined and limited by a constitutional framework—need to reflect the general interest as understood by the citizenry themselves. Thus, political institutions will require that they facilitate direct legislation.

It remains necessary in any case to design public policy and carry out public administration. Marx and Engels believed that in bourgeois society elected public officials were captured by private commercial interests, which meant that government turned from the servant of society into its master (Marx, [1871a], p. 486-487; Engels, [1891a]). To remedy this, they adopted the proposals of radical republicans and socialists. All public functions would need to be elected by universal ; all elected public officials would need to receive an average worker’s income; elected officials would need to be bound by fixed mandates; and recall procedures would need to be available to constituencies (Engels, 1891a). These are some of the mechanisms proposed by democratic and radical republicans to ensure the accountability of government to its people as well (Mouritsen, 2006, p. 30; Leipold, 2020b, p. 177-178). Socialists have generally advocated “radical democracy based on popular participation” (Heywood, 2017, p. 41). Thus, we find that socialist theorists, like Marx and Engels before them, tended to take up the republican proposals of direct legislation. Citizen assemblies, such as those in the French Revolution, are usually taken as the standard model (e.g.: Bookchin, 2015, p. 50, 53). After the Russian Revolution ‘soviets’, or ‘workers’ councils’, came to be widely regarded as the revolutionary form of working class political authority (e.g.: Shipway, 1988; Ness & Azzellini [eds.], 2011). Kautsky, on the contrary, believed that parliamentary forms were an outgrowth of the absence of servile labour.

16 The commune being an at the municipal level of the French Republic. 17 Indeed, “dictatorship” was borrowed from Roman law, where it referred to a constitutional proviso which allowed for the temporary concentration of power to quell civil unrest—essentially, a state of emergency (Draper, 1987, p. 11-13). A ‘dictatorship’ is by that definition a temporal rather than a ‘timeless’ regime, and so, then, is the revolutionary dictatorship of the proletariat (Marx, [1875], p. 95).

23 An Institutional Design for Republican Socialism The Socialist Community of Citizens

In Ancient Greece, he opined, direct democracy was viable only because a limited number of free citizens had sufficient time to take part in political life since they were unburdened by the need to toil physically (In Lewis, 2019, p. 68). The absence of slavery meant the absence of direct democracy. Given that we have the capacity to reduce the working day, this objection seems invalidated, at least in the present era. A reduction of the workday is in my view a precondition for any kind of viable radical republicanism. Ergo, this political demand should be included in republican socialist reform proposals to enable active citizenship. Additionally, policies that encourage the implementation of labour-saving technologies should be put in place. In this way, citizens can reserve the appropriate amount of time and energy for political participation.

Political deliberation should be encouraged through face-to-face citizen assemblies, acting as public forums and instruments of direct legislation. This is preferable to or electronic , as proposed by Cockshott and Cottrell (1993, p. 165), in which no deliberation, no real engagement with opposing viewpoints is required, and where, in addition, no compromise or alternatives are possible in light of the closed questions that are put to a vote. Yet, it is obviously impossible to gather millions of citizens in a single plenary session to deliberate on political matters. To Gey, this impossibility is an indictment of participatory forms of democracy. He points out that “small, cloistered, homogeneous communities have become largely irrelevant to discussions” about governance of the modern state, and the inability of civic republicanism to identify these small homogeneous communities in modern society—which, Gey argues, are the only viable conditions for to exist— would cause it to reproduce only the worst qualities of this type of decision-making, namely its conformism and intolerance. Whereas, on the other hand, its advantages, “its homey, personal, face-to- face means of identifying and achieving common goals”, could not be realised on a large scale (Grey, 1993, p. 815). Scattering the population into small autonomous communities, as has been proposed by Bookchin for instance (1983, p. 63), would be an unrealistic and costly solution to this problem (for example: “Small communities cannot afford their own MRI equipment”; Shalom, 2008, p. 28; see also: Nove, 1991a, p. 44). Peripheral communities need to rely on centres which can pool greater resources that are too scarce or too large to be owned on a smaller scale. So, while retreating into autonomous communities is suitable as a personal choice, it is not a political solution which can adequately address the challenges of contemporary society. Vertical integration of local decision-making, to the subnational, national, and international level is required. How might this be achieved?

We could draw lessons from the Brazil-based ‘Landless Workers’ Movement’ (MST), which numbers 1.5 million members, and is administered by a governing structure in which base-level participation is crucial. The general assemblies of the movement’s rural settlements—composed of ten to fifteen families—elect two deputies (one male, one female) for managing the settlement’s day-to-day affairs, as well as to represent them in the regional, state, and national decision-making bodies (Vergara- Camus, 2005, p. 11-12). The MST organises a host of services and activities, including agronomical,

24 An Institutional Design for Republican Socialism The Socialist Community of Citizens healthcare, educational,18 recreational, and cultural services, and operates over eighty cooperatives (Vergara-Camus, 2005, p. 12; Carter, 2010, p. 20). The emphasis on local empowerment and shared symbols and rituals create meaningful communities that stimulate high levels of participation and mobilisation (Vergara-Camus, 2005, p. 11; Carter, 2010, p. 20). The need for base-level empowerment grew out of concerns that leaders could be bought off or assassinated, and thus the MST’s ambition is to nurture leadership capacity in every individual member. While, of course, a social movement is distinct from government, we might want to incorporate some elements of their practices. Vertical integration in a socialist republic can be accomplished by the use of delegation for higher administrative levels.19 The general assembly of our theoretical socialist republic could thus elect neighbourhood delegates to represent them at higher administrative levels. This would allow citizens to express their views beyond the scope of the neighbourhood, in which the general citizen assemblies should be nested. Gey’s objection can be addressed in this way.

To Cole, there is a clear distinction between delegates and politicians: “instead of substituting his [the delegate’s] will for [that of the workers or population],” he “aims at carrying out, not their 'real will' as interpreted by him, but their actual will as understood by themselves” (1920b, p. 51). These delegates should be sent to higher levels of administration, to the level of the municipality (commune), province (department), to the national level, and beyond. In this way, it has been proposed, they merely communicate the decisions taken at the general citizen assembly, ensuring that political power rests with the base at all times. Fotopoulos, for instance, maintains that the “regional and confederal assemblies” composed of delegates are “simply administrative councils”, whereas the general assemblies at the base are “policy-making bodies” (Fotopoulos, 2003, p. 404). However, Shalom argues: “We don't want to have delegates mandated by their sending councils, for then the higher level councils will not be deliberative bodies” (Shalom, 2008, p. 29). What is supposed to guarantee the responsiveness of elected representatives to popular will is, first of all, that they are drawn from the general assembly itself, “because [the delegate] has been part of a council and participated in a deliberative process with its members, understands their sentiments and concerns, and is authorized to deliberate on their behalf with other delegates” (Shalom, 2008, p. 29). Thus, there is an organic connection: “The delegates are part of—and constantly returning to—their sending council.” Evidently, any important non-routine decision has to be ratified by the lower council. Furthermore, “delegates will be rotated”, and finally, “delegates will be subject to immediate recall” (Shalom, 2008, p. 29). Direct legislation, then, would be organised through various deliberative bodies, from the neighbourhood

18 Its schools were attended by 160,000 children, and its literacy programme served 30,000 people circa 2010 (Carter, 2010, p. 10). 19 This is, of course, hardly an innovative concept in socialism, but the example of the MST shows that it can work in practice, even when it involves a relatively large number of people. Furthermore, the two representatives also act as day-to-day administrators of their settlements. Yet, they are not elected through passive , but by a deliberative assembly instead, to which they remain accountable. This reduces the number of plenary sessions, circumventing ‘’, whilst at the same time permitting deliberation to play a key role in decision-making.

25 An Institutional Design for Republican Socialism The Socialist Community of Citizens level at the base to the international level at the very top. In this way the ‘small, local communities’, which Gey noted were absent in modern society, can be rediscovered in the form of neighbourhoods.20

If local communities merely articulate their wishes within the scope of their community they may develop an outlook which is reflective of their particular interests as a local community rather than of the public as a whole. Shalom’s proposal, then, is more sensitive to republican concerns for the common good since it would ensure that citizens in communities engage with the viewpoints of other communities in order to develop a broader outlook. This institutional mechanism can also address the so-called ‘NIMBY’-syndrome. This refers to a type of civil opposition which attempts to thwart the siting of infrastructure, the need for which is widely accepted but which no community wants to be adjacent to, or ‘Not-In-My-Backyard’ (Esaiasson, 2014). In an institutional setting in which local communities confront each other to develop, through negotiation and deliberation, a shared outlook at higher levels of administration, we can imagine that the ‘NIMBY’-syndrome is likely to lessen in effect in many instances.21 Nevertheless, we can also imagine that it will not resolve all ‘NIMBY’-cases. When they do emerge, and immobilise the construction of much-needed or desired infrastructure, a republic can enforce the democratically mandated decision, whereas a stateless community could not.

One disadvantage of this ‘pyramid’-like structure, where decision-making power rests at the bottom, is that it places additional tiers between the base and the top, or centre. When there is widespread popular participation, involving both deliberation and monitoring, this may not be much of a problem. When this is not the case, however, as Glaser has pointed out, this can lead to an “undue concentration of power in particular groups of individuals or in higher tiers of political and bureaucratic authority” (in Machover, 2009, p. 16). Machover furthermore points out that that a voter’s power is diluted with each additional tier: he shows mathematically that “the vote of an individual citizen counts for less, has a smaller chance of affecting the final outcome, than in a ” (Machover, 2009, p. 18). Of course, the chance of a voter affecting the outcome in any popular vote of millions is astronomically small, essentially nil. This is hardly the point of democratic participation (energy expended on the act of voting outweighs the personal benefits manifold).22 Democratic participation is first of all an effective check on government power; secondly, it facilitates sensitivity to the common good;23 thirdly, it converts the common good as understood by the public into policy (rather than being the sum of individual self-interested preferences). An added benefit is that mass democratic rituals create a shared

20 There is of course an important cultural dimension to the question of ‘local communities’ as well, which I cannot go into due to space constraints. 21 In present society, local residents are only aware of their allies within their own community and when opposing the siting of particular infrastructure in their locality. Since there is no integrated network of deliberative assemblies, their outlook will be limited to their immediate social environment with which they interact. 22 See the so-called ‘ of voting’ as formulated by Downs (Feddersen, 2004, p. 99). 23 Similar to: altruistic voter theory (Jankowski, 2007), which shows that voting is in part motivated by weak altruistic concerns rather than by a rational analysis of the personal costs and personal benefits that might be gained from possible electoral outcomes.

26 An Institutional Design for Republican Socialism The Socialist Community of Citizens experience which assists in building a common identity and therefore helps enable solidarity. Nevertheless, there is an important point to be made in this respect. Machover writes that:

A free human being, citizen of a free commonwealth, is not merely a member of such a group [a local community] but also, and at the same time, a member of the entire society at large. […] For some such decisions, local or sectorial interests and viewpoints are relevant, and so it is reasonable for citizens to be represented through a structure that reflects their local or functional affiliation. But there are surely some national-level decisions for which these affiliations are either irrelevant, or should be ignored, even overruled, in order to prevent undue special pleading. (Machover, 2009, p. 17)

Local self-government arguably ties citizens to the logic of particular interests—even if this is mitigated by flexible mandates at higher levels of administration, as discussed. The locus of political decision-making is centred in the local community and its needs and interests, and may therefore discourage the formulation of a society-wide common good, since all decision-making passes through geographically segmented decision-making bodies before arriving at the top or centre of the political community. It may encourage a focus on local and sectoral interests, as a result. At the same time, we want to have direct legislation and face-to-face deliberation in the political procedures of the commonwealth. To counteract the potential development of parochialism, we can adopt Machover’s proposal of a bicameral legislature, “in which a directly elected assembly of representatives functions as the ‘lower’ chamber, whereas the council of delegates at the corresponding tier of the pyramid serves as the ‘upper’ chamber” (Machover, 2009, p. 23). In my view, however, this ought to be reversed. The indirectly elected house of delegates ought to be the lower house, with full powers of legislation (within the scope of the constitutional framework), since this is the body through which direct legislation is realised, and thus by which citizens are empowered directly. This should stimulate higher rates of political participation, given the importance that citizen assemblies have. The upper house should be a smaller directly elected representative organ guarding the general interest, merely forcing the lower house to take society-wide interests into account in the legislation it passes, since the upper house will have to approve it.

Such a bicameral legislature would be an additional check geared to safeguarding the common good as well as against the surreptitious hoarding of political power within the many layers of public administration. In case of the latter, a constitutional-republican order in which the terms and scope of power are clearly defined and limited, and monitored by an independent judiciary, would also be beneficial, compared to a stateless community, which would not have such tools at its disposal.24

24 In a stateless community, the social structure takes shape in accordance with prevailing custom, or customary law (Holterman, 1980; Holterman, 2012, p. 17-20). When there is relatively low participation the monitoring of delegates suffers. This is compounded by the fact that each tier beyond the commune is indirectly elected. Citizens at the base will have limited knowledge of the intricacies of higher tiers of administration—a ‘black box’ that is staffed by indirect ballot and commissions appointed by said indirectly elected deputies—which could potentially allow delegates to misuse political power for their own benefit. Since by acting in different ways new customs and conventions develop, law will reflect this incremental usurpation of power over time.

27 An Institutional Design for Republican Socialism The Socialist Community of Citizens

For widespread popular participation to be sustained, abundant quantities of civic virtue and duty are required. Furthermore, meaningful political engagement “requires equal access to the resources needed for effective participation” (Devine, 2002, p. 73). As Cockshott and Cottrell note:

those goods and services which are basic prerequisites for full participation in the productive and communal life of the society should be provided as of right, and financed out of general taxation. Prime examples here would be education, health care and child care […] In order to function as an active, productive member of society one must be well-educated, healthy and free of the need to stay at home with dependent children all day. These goods are necessary to give individuals the ‘positive freedom’ to control their own lives. (1993, p. 69)

There are some ways to enhance civic virtue, such as through civic education. 25 Comprehensive mandatory public education could include quasi-democratic forums for schoolchildren in which they could deliberate on school-related matters and arbitrate disputes. In this way they can be socialised into norms of civility, dialogue, conflict-resolution, and public-spiritedness. Even if civic virtue is nurtured, we have some reason to believe that political participation will be limited. For example, attendance to weekly community meetings in kibbutzim—Israeli —hovered between twenty to thirty percent, although in varying composition26 (Blasi, 1986). An institutional framework that presupposes sustained and widespread popular participation would likely face difficulties in . Thus, pessimistic assumptions need to be integrated into the institutional design so that the political structures are able to cope with low levels of participation. For this reason, it may be necessary to hold an annual or bi-annual general citizen assembly at the neighbourhood level in which the budget for the commune and the entire polity is established. Such an assembly should establish the level of national income reserved for personal consumption and collective consumption (the tax rate in effect), as well as the percentage of collective consumption reserved for various

If this de jure corruption does not occur then at the least we might fear a de facto shadow administration which circumvents and undermines democratic processes by sabotaging the dissemination of information on which direct democratic processes depend, for example. This may not be done with ill intentions, but could reflect the creeping conviction that the deputies are better equipped to make decisions, since they are more familiar with the procedures or subject matter. Intricate familiarity with the procedures could allow them to manipulate or massage them to produce outcomes that would benefit them personally, or their constituency. The rotation of delegates—term limits are also an available policy option in a republic—whenever possible, offers some immunisation against this tendency, but depends on the willingness of citizens to volunteer. In a constitutional-republican order the powers over deputies are clearly defined and codified, by contrast, and cannot be changed through an alteration of customs alone. That is not to say that there is no risk of a constitutional-republican regime sliding into corruption, of course. Civil codes and legal norms could fall into disuse, or the independent judiciary could be undermined. Civic engagement is required in any case, but the constitutional codifications of government functions are an additional safeguard that a stateless society would lack. Libertarian practices are more susceptible to erosion since they are not codified and secured by independent arbitration. 25 This thesis will have to forego extensive discussion of civic education in public schools due to space constraints. 26 Which meant that approximately seventy-one percent of kibbutz members attended the meetings regularly or occasionally (Blasi, 1986).

28 An Institutional Design for Republican Socialism The Socialist Community of Citizens categories of public expenditure, such as healthcare, infrastructure, education, and so on. Various proposals can be drafted by a CPB, which also estimates the effects of each draft proposal so that citizens can make informed decisions. The enormous importance of the national budget, affecting all members of society, should stimulate a high attendance.27 The role of budgeting will also be discussed in chapter IV.

In addition to (bi-)annual general assemblies, a bi-weekly neighbourhood plenum should be organised. In it, citizens can deliberate on political matters, such as law or policy, and hold the neighbourhood representatives accountable. Attendance in these sessions can be expected to be lower than at the general assembly, whose legislative authority is more important. Lower attendance may in itself not be a problem save for the varying composition of meetings which could produce inconsistent policy proposals. The elected representatives, chairing the plenum and general assembly, should therefore seek to ensure continuity between sessions.28 Meetings could be complemented with cultural festivities or social activities to draw a higher attendance and reinforce a sense of community.

In this way, direct legislation becomes the main instrument for passing laws and deciding on policies. However, it will need to be supplemented with representation—at the local level as chairpersons heading the plenum and general assembly; at the national level as the upper house of a bicameral legislature—as well as with constitutional limits and judicial oversight. This basic institutional framework should ensure that political power does not become concentrated in the hands of a nascent elite. This is a basic prerequisite for republican socialism. The following chapters will discuss whether a model of a socialist economy can be devised that is consistent with republican values.

27 Ideally, observing the direct impact citizens have in establishing the budget will also stimulate them to participate further in the political process. 28 If moral appeals by the representatives for the preservation of continuity fail consistently, causing dysfunction, ratification of decisions should be made open only to those citizens that participated in the relevant previous session.

29 An Institutional Design for Republican Socialism The Socialist Community of Citizens

Chapter III: Production and Consumption in the Socialist Republic

3.1 Property Relations Socialism, in the broadest sense of the word, is based on some form of social ownership of productive resources. Here we proceed briefly with a discussion of the appropriate property relations for a republican socialism, in acknowledgement that this turns Marx’s method on its head somewhat, who believed that property relations are rooted in the interaction of the relations of production with productive forces (Chattopadhyay, 2005). For our present purposes it is necessary to demonstrate that social ownership can accommodate the core values of republicanism as we have summarised them in chapter I. To do so, I will define briefly property relations, types of property that should and should not be subject to public control, and discuss republican concerns in relation to social ownership. When I discuss ‘property relations’ I mean the conventions—whether established by legislation, precedent, or custom—that govern the actual use of objects, symbols, and information by defining who has the right to exercise or delegate effective control over them. Social ownership can assume a variety of forms, including employee, municipal, collective, public, communal, or common ownership.

We should distinguish, first of all, between personal possessions and property in which the public has a stake, directly or indirectly. To Marx and Engels, communism did not mean that it deprived anyone “of the power to appropriate the products of society; all that it does is to deprive him of the power to subjugate the labour of others by means of such appropriation” (Marx, [1848], p. 500). This means that objects of personal use are treated as individual possessions, but that resources cannot be accumulated and leveraged in order to subject others to one’s will. This is indeed the core of republican arguments for socialism (Muldoon, 2019, p. 3). This means that in communism, as Marx put it, “no one can give anything except his labor”; therefore, “nothing can pass to the ownership of individuals, except individual means of consumption” (Marx, [1875], p. 86). This distinction between objects of personal consumption and productive resources is important since individual possessions are not a public good but a private matter and should therefore in principle not be subject to public control, lest we violate personal freedoms or privacy. Forms of property that should be socialised or nationalised should be those productive resources that society depends on for its reproduction, such as natural resources and raw material as well as physical means of production and assets. Human labour-power may be considered the exception since it is logically inseparable from personhood and social ownership of this resource would in effect amount to slavery.

As we have established in the previous chapter, some decisions should be made in the centre and be made binding on all regional and local bodies. (We will circle back to this question in chapter IV as well). For society to exercise effective control over productive resources it is necessary that they are publicly or commonly owned, rather than by their employees or local community. Employee ownership, for example, will reproduce the atomistically driven commercial imperatives we associate

30 An Institutional Design for Republican Socialism The Socialist Community of Citizens with capitalism.29 According to Fotopoulos and Schweickart the means of production should therefore be owned by the community and state, respectively, and to be ‘leased’ to cooperative enterprises instead of being owned by their employees (Fotoupolos, 1997, p. 256; Schweickart, 2002, p. 50). In this way, the narrow self-interests that arise from free competition can be managed to different degrees, depending on the terms of lease. Social ownership does not mean that all members of society should be consulted on the exact use of productive resources at all times, which is neither possible nor desirable. Society, through its political institutions, would stipulate the conditions for the usage of resources, through directives, co-management, lease terms, or others forms of regulation. In this respect, ‘social ownership’ can accommodate a variety of forms, from market socialisms to centrally planned economies to freely associated producers administering commonly owned means of producing wealth. Much has been written about the ‘tragedy of the ’, and few words are required here other than to say that there appears to be no empirical evidence that widespread over-usage of common resources occurs. This is due to ‘commons’ usually being managed cooperatively by their stakeholders, who exercise careful stewardship over them (Ostrom, 1990). Similarly, the terms of use for publicly owned resources can ensure that socially destructive outcomes are prevented. A socialist republic ought to exercise control over productive resources by defining the terms of use with public goals in mind that track the interests of the citizenry. Public ownership is thus an effective instrument to secure the common good. However, this carries the risk of replacing private domination with public domination, which will need to be addressed.

According to O’Shea, public ownership transfers more power to workers and citizens than, say, co- determination would (2019, p. 12). Therefore, socialist policy, in this respect, is the means that serves republican ends, in his view. He argues that this will free workers from the arbitrary will of the private owners of capital. Instead, the public, as stakeholders, will possess the democratic means to shape investment decisions which would be made to serve public goals (2019, p. 13). does not in itself reduce the dependency of workers. In fact, it could exacerbate it when, under conditions of a state monopoly, the ability of ‘exit’ is compromised, or in the case of authoritarian rule, the ability of ‘voice’ is compromised. If the workers tasked with the administration of publicly owned resources are subject to externally imposed terms that they have no role in shaping or no ability to contest, then public ownership will not enhance freedom. While a constitutional-republican regime would limit arbitrary power by allowing citizens to formulate the terms of use, O’Shea correctly notes that this answer does not sufficiently address the dependence of citizens on the for employment. To O’Shea (2019, p. 16-17), therefore, citizens should be provided with a basic minimum, through unconditional basic income or unconditional access to basic services such as housing, education, and healthcare. This would guarantee a level of independence for citizens, he argues. While mostly

29 While I would concede that any form of ‘social ownership’, including employee ownership, may be qualified as socialism, I would also argue that more or less unrestrained ‘employee ownership’ is not socialist in spirit.

31 An Institutional Design for Republican Socialism The Socialist Community of Citizens agreeable, we ought to include a job guarantee in that list in place of a basic income, in my view. An unconditional basic income would, in some sense, enhance independence and some individuals may be helped to apply themselves creatively or socially. In another sense, if it stimulates inactivity in those with limited access to formal employment opportunities for example, it could create a socially alienated, idle underclass that becomes unaccustomed to both collective and individual self-control over their lives. Cooperative activity, such as social labour, has the ability to encourage virtue (public- spiritedness through active participation in social life). A job guarantee scheme better suits republican aims, therefore.

Engels ([1880], p. 319) argued that state ownership in itself did not alter the fundamental nature of wage-labour, but only replaced the capitalist with the state as employer. Typically, socialists have advocated cooperative control over the means of production, as will be discussed at some length in the next section. This should ensure a degree of independence of the producers from arbitrary government control as well, but only under conditions of political freedom.30 Economic decision-making should thus not be concentrated centrally, at levels far removed from control and accountability by and to the citizenry (as in ‘state-socialism’), but nested in workplaces and communities. Self-government in workplaces would allow workers to assert their independence, which will be discussed in the following section, and citizens should have the capacity to directly shape public investment, which will be discussed at length in chapter IV. In this way, republican values can be accommodated within a socialist institutional framework.

3.2 Self-Government in Production Hobson noted that in liberal democracy “we find that the majority of voters, or citizens, possess political power without any corresponding economic power” (Hobson, 1914, p. 50). A socialist republicanism would rectify this by extending the principle of self-government to the economic sphere. This section will focus on the internal mechanisms of units of production—a single workplace of any convenient size—rather than the process of social coordination and harmonisation of different units of production. There is little disagreement in this respect. ‘’31 is accepted by all socialist models that will be reviewed and discussed. Theoretical differences are minimal, and furthermore, the widespread availability of economically viable examples of agricultural, worker, credit, and housing cooperatives (Karlyle, 2005; Tchami, 2007; Pérotin, 2014;) attest empirically to

30 In ‘actually existing socialism’, the power of self-managed cooperatives was surrendered to unelected and unaccountable public officials, such as in Yugoslavia and (Ness & Azzellini, 2011, p. 12; Liotta, 2001, p. 8). The preconditions for sustainable political freedom have been discussed at length in chapter II. 31 Or other more or less interchangeable terms conveying the same essential arrangement, such as ‘’, ‘associated labour’, ‘workers’ self-management’, or ‘workers’ control’. Similarly, ‘workers’ cooperative’, ‘labour-managed firm’, ‘self-managed enterprise’, or ‘production association’ refer to more or less similar arrangements of democratically managed workplaces.

32 An Institutional Design for Republican Socialism The Socialist Community of Citizens their practicability. Nevertheless, what follows is a basic exposition of the idea of workers’ control, given that it is an important, although not distinctive, part of different post-capitalist models. It allows us to both highlight republican concerns that arise when we set out designing a socialist society and to tweak the proposals to integrate important republican details. Essentially, the workplace should act as the microcosm of the republican polity, its concrete expression within the sphere of production, in which sensitivity to the common good, self-government, dialogue, and active participation rule. The spirit of self-government should ideally be mutually reinforced between economic and political life. What follows is a discussion of the basic democratic features of workers’ control and proposals for additional republican features.

In Marxist theory, productive activity in communism is based on what we may call ‘freely associated labour’, or in the precise words of Marx, “production by freely associated men” (Marx, [1867], p. 90). Instead of selling one’s labour-power to an employer, the producer joins an association as a member, equal in duties and rights to all other members. Socialists, from Devine (2011, p. 190) to Cole (1920a), and from Hahnel (2005, p. 189) to Schweickart (1998, p. 17) are likewise in agreement that democratic control over workplaces by producers should be a fundamental characteristic of a vision of socialism. There is little room for doubt that such arrangements are feasible. Worker participation improves job security, information quality, flow of information, and integrates workers’ interests into decision- making, contributing to improved productivity, engagement, and performance (Pérotin, 2012, p. 201, 208). Numerous studies have indicated a positive relationship between productivity and participation, particularly when it involves sharing the financial benefits of improved productivity (Weitzman & Kruse, 1990; Schweickart, 2002 p. 60; Levin, 2006, p. 114; Pérotin, 2012, p. 195-221;), which is of limited applicability to models that curtail market forces and the motive in production (which will be addressed in section 3.4). Worker participation increases net productivity somewhat, but not as much as the combination of worker participation and capital assets controlled by workers individually (Pérotin, 2012, p. 206-207). Furthermore, profit sharing without worker participation does not yield similar improvements in productivity (Pérotin, 2012, p. 210). Low wage differentials within the context of worker participation also contribute to productivity (Schweickart, 2002, p. 60). There is some evidence that worker participation in the public sector improves job satisfaction and efficiency and reduces turnover and absenteeism (Levin, 2006, p. 118).

The basic features of ‘workplace democracy’, which facilitate workplace participation, are what Castoriadis called the “factory council” and the “general assembly”. In his view (and not just his, although others may use different terms), “the factory council exercises authority and replaces the factory's general assembly only when the latter is not in session” (Castoriadis, [1957], p. 98). Workplace democracy does not mean that every action of every worker should be subject to immediate majoritarian control, of course. Indeed, the concern that too many decision-making sessions will be required has been raised repeatedly (Castoriadis, [1957], p. 144-145; Laibman, 2002b, p. 86;

33 An Institutional Design for Republican Socialism The Socialist Community of Citizens

Schweickart, 2002, p. 60). The general assembly of workers may be a monthly event. It would need to install a board32 tasked with daily decision-making. The number of board members cannot be specified or uniformly established, since it should be informed by the complexity of the day-to-day management. What can be stressed is that the number of board members should tend toward the higher side of the scale since larger board size in cooperatives was found to increase engagement and productivity (Pérotin, 2012, p. 206). Alternatively, cooperatives may decide that general meetings of workers must be convened at more regular intervals, but the law of the republic should stipulate that a general assembly be convened at a minimum, say, six times annually (which would accord a degree of flexibility to accommodate varying types and sizes of production units).33 Sustained participation, and not mere passive employee ownership, is associated with enhanced performance as well (Pérotin, 2012, p. 213). Production associations would therefore benefit from organising (and should be encouraged to organise) workers’ assemblies outside of the mandated number of general meetings. This is only realistic when the workforce of a given association is capable (and, importantly, judges itself to be capable) of governing their own workplace. The adequate training of workers in economic decision- making and the dissemination of simplified essential information is a precondition for effective participation (Castoriadis, [1957], p. 97-98; Musić, 2011, p. 178), and policies should be in place to ensure this.

If necessary, work teams or departments can be established within the workplace with their own democratic organs. The exact arrangement depends entirely on the type of organisation. Some types of production operations are coordinated through standardisation of work processes, for instance (Douma, 2017, p. 212). Routine makes frequent democratic assemblies and feedback less important, whereas other types of social labour may demand more deliberation, or mutual adjustment (Douma, 2017, p. 212). Such workplaces will have to convene frequently owing to the nature of their work. As Levin extracted from empirical observations of existing cooperatives:

Depending upon the size of the cooperative, participation may be highly informal with discussions and meetings, as needed, and personal discretion in specific work roles. In larger firms the participation may be more formal in terms of work teams and specific decision forums as well as selection of managers. (Levin, 2006, p. 115)

Even in organisations where standardisation of work tasks is not applicable, routine decisions will need to be made. An elected manager can operate on the basis of tacit of those that they are elected to represent in relation to routine decisions, in order to not bog down production by innumerable meetings that additionally depress morale and therefore undermine the willingness for democratic

32 Since not all workplaces are ‘factories’ a ‘board’, ‘council’, or ‘committee’ is to be preferred over ‘factory council’. 33 In much the same way law presently governs not-for-profit or nonprofit corporations, organisations, or unincorporated associations and compels such legal entities to convene a general meeting annually in order to qualify for this legal status. Of course, the legal specifics vary between ‘rechtsgemeenschappen’ (communities of law), or jurisdiction.

34 An Institutional Design for Republican Socialism The Socialist Community of Citizens participation. Herein lies a modest risk, namely that new members of the democratic association will be initiated into ready-made routines which they internalise without critically reflecting upon them, and therefore not becoming fully ‘owners’ of the processes which they reproduce. The rotation of workers “between production and office areas” and in managerial positions, as suggested by Castoriadis ([1957], p. 117), can alleviate this risk to a degree, since it would familiarise workers with routines at different levels and allow them to reflect upon existing practices from different perspectives. That is to say, they should be given responsibilities in which they become active participants and not mere passive recipients of ready-made routines.

Having so far discussed the preconditions and features of workplace democracy, let us now turn to a republican perspective. Each worker can, and from the perspective of republican socialism should, actively participate in decision-making as a check against the monopolisation of power and to secure freedom from domination within the sphere of production. A neo-Athenian perspective would additionally highlight that self-government in production enables human creativity to flourish and permits workers to exercise control over their immediate social environment. This is so since workers would have a vested interest in improving the quality of labour, and self-government commits workers to cooperative initiative, thus bringing out their intrinsic social nature. Consequently, it enhances capabilities for self-mastery. This parallels humanist themes in Marxism (Thompson, 2019). Along similar lines, it has been suggested that could serve as “foundation for active citizenship” (Brest, 1988, p. 1623). Workers become accustomed to participatory decision-making, deliberation, the consideration of different viewpoints, and the development of shared interests within the context of a collective endeavour. Empowering agency in social life, including the workplace, may also address the sense of powerlessness which contributes to reduced political participation (Levin, 2006, p. 112). There is some cautious empirical evidence that workplace participation increases political participation (Levin, 2006, p. 113). Therefore, the skills and spirit of self-government may carry over to political participation, thus contributing to improved and active citizenship.

At the same time, workplace democracy may interfere with political democracy, due to ‘voter fatigue’. The number of deliberative sessions in workplaces and may well stretch thin the willingness to participate. In this sense, there may be a trade-off between workplace and political democracy. This can be mitigated in a number of ways, principally through a reduction of the work week. Kautsky, as was mentioned earlier, pointed out that direct democracy in Athens was possible because free citizens were alleviated of labour duties. Citizens should have (in addition, to training) the time and energy to engage in direct democracy. This can be facilitated, first of all, by delegating workplace authority efficiently, as discussed earlier. This limits the number of democratic workplace sessions (although not too much, since active engagement is desired), and simultaneously decreases the overgrown managerial

35 An Institutional Design for Republican Socialism The Socialist Community of Citizens apparatus which is functionally attuned toward control over employees.34 This in turn frees up some labour-power that can be redirected elsewhere in order to reduce the average workload in favour of leisure. Secondly, the removal of commercial interests in production would do away with a number of occupational functions that are of high commercial value but of low social value.35 Thirdly, the planned mobilisation of all labour-power and a job guarantee provision could eliminate unemployment, which allows for a per capita reduction of work hours. It should also be noted that a temporary reduction of the work week to 24 hours in the United Kingdom was found to have a minimal negative effect on overall output, since fewer work hours were compensated by a drop in absenteeism and higher productivity (New Economic Foundation, n.d., p. 11-12). Lastly, the dates of general assemblies should be official non-working days. In this way, voter fatigue should be minimised.

Evidently, republicans cannot be satisfied with merely extending democracy to workplaces, since this implies that there is no raison d’être for a specifically republican vision of economic democracy. Democracy alone insufficiently guarantees freedom in the republican sense. The arbitrary private will of the employer should not simply be replaced by the arbitrary will of the workers, as per neo-Roman liberty. Within social organisation it is necessary to have a level of discipline and integration, which necessarily means that individuals part of a given organisation need to surrender some of their personal autonomy for the sake of organisational reproduction and continuity. Even when social organisation is organised on the basis of consensus, personal autonomy is out of the question insofar as individuals are not able to opt out of the agreed upon terms at any moment. In the sphere of production, the respective individual labours of workers need to be integrated. Enforcement of decisions—by various means—is required. Therefore, coherent social organisation necessarily creates a condition of interdependency. Under certain circumstances interdependency can potentially develop into dependency if a difference in bargaining power develops. Consequently, there is an inherent risk of workers being subjected to the arbitrary will of other workers, even in a production association. Individual workers should enjoy adequate protection against the arbitrary will of other workers, which they may scarcely enjoy if they

34 For instance: “The monitoring of work in LMFs [labour-managed firms] tends to be undertaken with peer group monitoring as a substitute for formal monitoring (Bonin, Jones, and Putterman 1993), a mechanism with cost savings for the firm and without necessarily any loss in monitoring intensity” (Doucouliagos, 1995, p. 67). Conte and Svejnar (1990, p. 155) likewise observed this in cooperatives in Spain. 35 Jobs in the commercial advertisement industry for example; or duplicate functions in wholesale and retail.

36 An Institutional Design for Republican Socialism The Socialist Community of Citizens are at the mercy of an unchecked direct democracy, as in, say, most anarchist visions of society.36 There are, in my view, three means to ensuring republican freedom in the workplace:

First of all, according to Dagger, in “the [neo-Athenian] republican view, freedom is not so much a matter of being left alone as it is of living under the rule of laws that one has a voice in making” (Dagger, 2006, p. 155). All workers should have an equal vote in the matters that affect them. This equal distribution of decision-making power should be anchored in law to prevent the emergence of differential bargaining power that can be leveraged into domination. To Hahnel, decision-making power should be proportional to the extent that it affects people (Hahnel, 2005, p. 184). However, quantifying the extent to which one is affected by the outcome of a decision seems impossible. Moreover, one cannot discern between the intensity of preferences (two people may be equally affected by a decision but one may be more invested in the outcome than the other). The republican alternative is to nurture a sense of solidarity and dialogue within workplaces—and outside—to ensure that those who may be widely recognised as being more affected by a decision or more invested in a particular outcome should have their arguments be given their due consideration, even if they are a minority. Furthermore, elected delegates, in production and politics, should be subject to recall procedures and pursue a (somewhat flexible) mandate. This helps ensure that the elected standing committee does not become a source of domination over the rest of the workers. In this way, formal equality is guaranteed.

Secondly, the neo-republican solution to the threat of majoritarian abuse is to organise the polity as “a community of equal citizens governed by law” (Lovett & Pettit, 2009, p. 22 [italics added]). Where the voluntary associations of anarchism and communism exist by virtue of customary , in a socialist republic the sphere of production would be placed under the jurisdiction of a civil code which protects the legal status of production associations as non-commercial democratic bodies with a public function. This would be similar to how one can presently join an association, union, or club—an incorporated association, a legal entity of a non-commercial nature. The production association should be a community of equal producers governed by law, then. Specifically, associations should be governed through by-laws articulated by the workers and instated by the general assembly of workers. The by-laws define in clear and transparent terms the rights and duties of workers, thereby providing a framework in which operational decisions can be made. In this way, the range of operational activities

36 For example, Chomsky characterises anarchism as “democracy all the way through”, unrestrained by state power. To him anarchism “means democratic control of communities, of workplaces, of federal structures, built on systems of voluntary association, spreading internationally” (Chomsky, 1996). Likewise, the acclaimed ‘Anarchist FAQ’ asserts that “[f]or most anarchists, direct democratic voting on policy decisions within free associations is the political counterpart of free agreement” (The Anarchist FAQ Editorial Collective, 2009). Similarly, Van der Walt summarises Bakunin’s world-view: “Anarchism would be nothing less than the most complete realisation of democracy—democracy in the fields, factories, and neighbourhoods, coordinated through federal structures and councils from below upward, and based on economic and social equality” (Van der Walt & Schmidt, 2009, p. 70). However, there is a minority of anarchists that reject ‘democracy’ as ‘anti-anarchist’, among them Black who does so emphatically (2011).

37 An Institutional Design for Republican Socialism The Socialist Community of Citizens of workers are governed by the codes of conduct that apply equally, rather than by majoritarian or managerial whim. Further, there should be legal regulations in place to ensure that neither by-laws nor operational decisions violate certain fundamental rights of workers.

Lastly, a final suggested check against the potential re-emergence of domination in the sphere of production is the rotation and combination of menial and mental labour tasks. This would limit the development of a differential bargaining power between workers. Albert and Hahnel (1991, p. 13, 19- 21) suggest that we should balance job functions within workplaces as well as between workplaces. In their opinion, the ‘empowering’ tasks should not be concentrated among twenty percent or so of the population, as they believe they currently are. Albert and Hahnel argue that this poses a risk of the monopolisation of influence by the ‘empowered’ workers—a potential ‘coordinator class’—that they can use to usurp power (1991, p. 69). Castoriadis ([1957], p. 111) had similarly remarked that:

The roots of possible conflict between workers and technicians therefore are not at all of a technical nature. If such a conflict emerged it would be a social and political conflict, arising from a possible tendency of the technicians to assume a dominating role, thereby constituting anew a bureaucratic managerial apparatus.

Indeed, in socialist Yugoslavia technical and administrative staff exercised undue influence in decision- making since shop-floor workers judged themselves to be insufficiently competent and informed to make qualified judgements on, for example, investment decisions (Musić, 2011, p. 178). While formal equality was legally provisioned, informal inequality (in addition to the lack of political freedom) eroded self-management. In other words, in addition to formal de jure equality, workers and citizens should have an equal capacity to govern. Indeed, this could otherwise echo the classical republican slavery-liberty paradox,37 wherein a labouring population is condemned to toil so that a privileged few can apply themselves creatively or intellectually. Schweickart (2006) points out, however, that it is impossible to equalise numerical job task desirability within and across workplaces, as suggested by Albert—it is simply a mathematically impossible undertaking. Instead, then, I believe, as Castoriadis argued, that workers should move between departments, workplaces, work floor, and office floor ([1957], p. 117). Training should be readily available to facilitate this. Whenever technically feasible, horizontal organisation should be preferred to vertical delegation.

We may conclude, then, that the necessary mechanisms and checks can be in place to ensure that self- government in production accommodates republican values without sacrificing either feasibility or the

37 This paradox pertains to how classical republicanism reconciled liberty with slavery, in the words of Gourevitch (2015, “The Paradox of Slavery and Freedom”): “The paradox can be stated logically as a contradiction between two propositions. The first proposition is that republican liberty is a socially constituted condition of independence made possible by the servitude of others. The second proposition is that human beings are equal and thus all legitimate political values must be universalizable, or enjoyable by all. The particularism of a commitment to republican liberty— independence for a particular class, dependence for another class—logically conflicts with the universalism of the commitment to human equality. Hence a paradox.”

38 An Institutional Design for Republican Socialism The Socialist Community of Citizens socialist ambition of workplace democracy. Self-government in production, in the manner prescribed, would guarantee freedom from domination and enhance self-mastery. Moreover, the attitude of self- government, institutionally nurtured in the workplace, may carry over to political participation, thus contributing to the structural coherence of the system. This will ultimately also depend on the broader framework in which it is situated, including the political order (which has already been discussed) but also the coordinating mechanism between production units. We will lay the groundwork for that last discussion in the following section and build on it in the next chapter.

3.3 Distribution as a Public Service We have so far discussed how the arbitrary private will of the capitalist can be replaced by the non- arbitrary will of the workers. This leaves untouched the question of whether the workers’ private will should be substituted for the capitalist’s private will or whether production should instead be carried out as a service for the common good and public welfare. That is to say, should production associations dispose of their products on the basis of their jointly developed but nonetheless narrowly defined private will, guided by their interests in maximising profit; or instead, should a public body specify the conditions of distribution on the basis of public welfare concerns? This is, in other words, a question of whether free competition or something else should be the coordination mechanism between production units. Since free competition produces socially corrosive particular interests—which makes the free exercise of commerce structurally biased against republican concerns for the common good—the aim of a radical republican political economy should lie with restraining commercial imperatives in production, within the parameters of what is feasible of course.

As explained in the section on ‘the socialist mode of production’ Marxist theory proposes that social production within firms is to be ‘liberated’ from private property and integrated into a single cooperative association—or ‘directly associated labour’. Products would not be transformed into commodities, subject to exchange, but remain objects of personal use, apportioned by society to its members. This can be done according to the contribution of producers (with non-producers exempted) or according to needs. ‘From each according to their abilities, to each according to their needs’ is the distributive principle associated with what Marx considered “a higher phase of communist society” (Marx, [1875], p. 87). In such a society, people would volunteer a given portion of their day to productive labour, being only intrinsically motivated to do so—or, ‘give according to their (self- determined) abilities’. In return, society permits everyone to withdraw from the stockpiles of consumer goods whatever they consider warranted or appropriate—or, ‘receive according to (self-determined) needs’ (Marx, [1875], p. 87; Bukharin & Preobrazhensky, 1920). Goods and services are thus freely accessible, without payment. In this way, labour is a voluntary service to society, undertaken out of moral obligation or intrinsic motivation, paralleling civic virtue in the political sphere.

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How might such a model work? No satisfactory answer has been provided (Hahnel, 2005, p. 181- 185).38 While it might consequently be dismissed out of hand (based on feasibility criteria), it would nevertheless be useful to briefly consider the faults in light of our later discussion (in chapter IV) on the possibility of socialist economic calculation.

It has been suggested that in communist society a network of mass assemblies and producer and consumer councils could deliberate on how, where, what, and for whom to produce (Nappalos, 2012, p. 301-302):

38 The Socialist Party of Great Britain (SPGB, n.d.) that linear programming could be used, but this is mistaken. This algorithmic technique can calculate the optimal way to use resources between alternative uses in order to maximise a given objective. It would already need to be known in advance what the relative usefulness of different goods are, however. The SPGB (nor anyone else for that matter) has offered any mechanism to estimate this without price mechanism. One might use the technique to maximise costs with a given quantity of various physical inputs (i.e. maximise output with a minimum quantity of resources, as a poor substitute for ‘wealth’), but there is no way to ensure that the costs expended upon products correspond to consumer preferences, thus rendering the technique useless. As a matter of fact, we find much the same mechanism existed in the Soviet Union, as Soviet economist Danilov-Danilyan said: “our economy can be characterised as cost-inducing (zatratnoi), because the economic mechanism for many years orientated enterprises to increase costs rather than economise on them, since it is precisely through expenditure (zatraty) that the command- bureaucratic system measures the results of economic activity: there is no other way in the absence of a market, the only known objective instrument by which to compare costs and results” (Cited in Nove, 1991b, p. 579).

Indeed, as Laibman noted: “I know this is a bitter pill for many ‘western’ Marxists to swallow, but the Soviet experience, for all of its serious and ultimately fatal flaws, is a vast laboratory of socialist construction” (2002a, p. 117). Refusal to learn lessons from the Soviet experience causes socialists to want to reinvent the wheel. Disassociating from the Soviet experience, by denouncing it as state-capitalist, will not ensure that a future socialism will trail a different and better path. In fact, this example shows how it could have the opposite effect. Bookchin went as far as to believe that scarcity is artificially maintained through private property (1986, p. 59-60). He argued, therefore, that “The problems of social reconstruction” are reduced to rather simple “practical tasks that can be solved spontaneously by self-liberatory acts of society” (Bookchin, 1986, p. 62). There is, he believes mistakenly, no need to decide between alternative uses when an ‘abundance’ of goods and services can be procured. The Dutch Group of International Communists, active in the 1920s and 1930s, believed that: “The organisation of the consumers in their consumer cooperatives and in direct communication with the productive organisations is a relationship which permits complete mobility. This mobility would comprise and comprehend directly the changed and changing needs of individuals, who would transmit these needs directly to the productive apparatus […] To each product would be given its own specific reproduction time, and this it then carries with it on its journey through the . In whatever form a product is to be created, the appropriate demand is communicated by the distributive organisations to the productive establishments. This is the entire secret as to how production organised on the basis of the communist mode of production and distribution renders the market mechanism superfluous” (GIC, 1930).

But what if the ‘appropriate demand’ that is communicated conflicts with the ‘appropriate demand’ for other products? Since subjective preferences cannot be compared unless they are aggregated

40 An Institutional Design for Republican Socialism The Socialist Community of Citizens

All people in an area would get together on a regular basis to consider, based on an analysis of the amount of materials and labor available, what to produce and how to allocate the products based on the needs (rather than wages) of individuals and families. Producing then in a communist society would rely on two functions: measuring the desire of people for things, and producing both in a collective and accountable manner. (Nappalos, 2012, p. 301)

A production association that produces an intermediate good may receive a number of requests from different associations that produce for end use. Since the ‘intermediate association’ cannot supply material to all associations (since it will likely have insufficient capacity), it will have to choose how much is allocated to each ‘end use association’. To coordinate this all associations would be represented in a council to deliberate on how and where the flow of intermediate goods should be directed. Consumers would indicate the quantity and quality of goods and services that they wish to use or consume to the ‘end use associations’, thereby inevitably expressing mutually exclusive preferences. According to Engels, in communism, “The useful effects of the various articles of consumption, compared with one another and with the quantities of labour required for their production, will in the end determine the plan” (Engels, [1878], p. 295). However, the useful effects of various goods, their relative , cannot be compared with one another through qualitative deliberation alone.39 As Nove (1991a, p. 76) said: “In no society can an elected assembly decide by 115 votes to 73 where to allocate ten tonnes of leather, or whether to produce another 100 tonnes of sulphuric acid.” In any modern economy—with millions of unique goods40—mass assemblies cannot sit down to assess in qualitative terms their relative utility and decide upon a plan out of an infinite number of options. A majority vote by a distribution council would amount to a blind guess and yield decisions that will be either, by a stroke of luck, suboptimal at best, or absurdly arbitrary, at worse. Furthermore, as Castoriadis argued:

The plan cannot propose, as an ultimate target, a complete list of consumer goods or suggest in what proportions they should be produced. […] [I]t could never be based on […] full knowledge of everybody's preferences. […] it would be tantamount to a pointless tyranny of the majority over the minority. If 40 percent of the population wish to consume a certain article, there is no reason why they should be deprived of it under the pretext that the other 60 percent prefer something else. ([1957], p. 123)

into objective data it cannot guide decisions between alternative or competing uses (at least not on a scale involving many millions of alternative uses). In other words, it presupposes the absence of mutually exclusive options (even though these will logically inevitably arise). 39 Allocation would be achieved through communicating demand ‘orally’, with and lobbying determining distribution priorities. A resultant cacophony would render rational allocation impossible. This is similar to the de facto planning process in , where “Because resources were limited and the transportation system suffered bottlenecks, resources were diverted to politically well-connected enterprises or those whose managers complained the loudest. An enterprise or industry that performed better than others often did so at the expense of others” (Savada, 1994, p. 113). Thus, in addition to inadequately and arbitrarily ‘resolving’ the question of how and where to allocate limited resources, it could also potentially stimulate competition between workplaces, and thus cause the re-emergence of market competition. 40 In the Soviet Union (not known for its variety of goods) there were some twelve million distinct goods in the 1980s (Nove, 1991a, p. 33).

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In order to be able to have rational economic planning it is required that information is accessible that reveals relative consumer preferences. As Laibman (2002b, p. 86) asks quite correctly, “is participation something to be maximized, or optimized?” Consumers’ subjective preferences would need to be converted into quantifiable and processable data to ensure that the optimal mix of goods can be approximated. As Albert (2003, p. 124) explains:

We are churning out pencils, as another example. When do we stop churning? Pencils are useful, but the more pencils we have, the less is the value of each new one added to the pile, at least after a point. Moreover, we certainly do not want to use up so much of our labor and resources churning out pencils that we start having to forego things more desirable to us than our growing pile of pencils—say, milk. Ideally the economy will churn out each output to a point where the benefit of the last item produced was equal to the opportunity cost of producing it. To produce another of the item would occur at the same or at a bit higher opportunity cost and would have the same or a bit less social value […] so that, by not producing that item we can use our productive capability to produce something else that benefits us more.

This cannot be achieved through the tracking of stock depletion rates, since at zero costs it tells us very little about the intensity of different preferences in relation to one another (the scale of consumer preferences), i.e. how much a consumer is willing to sacrifice to attain an article of consumption relative to another (since at zero costs they do not have to forego on either option, save for the need to economise on their time and space). Giving priority to basic needs would not be an option either: people want milk (a basic need), and presumably prefer some milk over a lot of pencils, but they would not want to use up all resources to produce such quantities of milk that no pencils could be produced at all. A ‘price’ would need to be stamped on goods and services, in order to track consumer preferences quantitatively. This is a common feature of the models we will review, although some use non- transferable labour certificates, points, or credits instead of currency.41

Labour certificates or credits of this nature are not ‘labour money’, which Marx criticised. The distinction lies in that ‘labour money’ was a ‘contradiction’, namely by using labour time calculations on the basis of indirect social labour, that is to say, treating commodities (products of indirect social labour) as if they were already products of direct social labour. Conflating the two, Adam and Tsushima have shown, is categorically mistaken ( Tsushima, 1956; Adam, 2013). Marx had repeatedly stressed that labour vouchers are not money since they do not circulate (in Cockshott & Cottrell, 1993, p. 24; Marx, [1885], p. 356). Upon use they would not pass to the producers—being cancelled instead—and are therefore not a medium of exchange. Consequently, they cannot function as a source of accumulation—they are more akin to coupons than currency. Therefore, the use of certificates or

41 At various points in recent history, experiments have been run with labour certificates. In the people’s communes of Maoist China work-points were tracked in accounting books, which were exchangeable for ration coupons or currency (Ahn, 1975, p. 643, 646-647). Similarly, in collectives during the Spanish revolution of 1936-1939, coupons and rationing books regulated the consumption of articles (Dolgoff, 1974, p. 73-74).

42 An Institutional Design for Republican Socialism The Socialist Community of Citizens credits has the advantage of curtailing the spontaneous (i.e. socially non-purposive) re-emergence of capitalist logic in production, and therefore should in my view be preferred over currency.

‘Labour points’—or whatever equivalent term is preferred—can prove useful for three reasons: first, they can cap consumption, compelling individuals to economise and decide carefully between available options thus reducing waste;42 second, this enables planners to make estimations about the intensity of consumer preferences, which can therefore guide decision-making about how to allocate resources between different uses; third, it can induce individuals to contribute to production where moral incentives are insufficient.43

While the promise of communism—in the sense of a society based on allocation without price mechanism and sustained by voluntary labour—cannot be redeemed, we still wish to maintain our commitment to production as a public service, since commercialism reinforces particularistic interests and dissolves social, cooperative bonds that are conducive to public-spiritedness. Whether it is feasible to establish, by public means, the public priorities for production associations depends on the feasibility of economic planning. This problem will be tackled in the next chapter. Before we can proceed with that discussion, however, we will have to turn our attention to the question of material incentives.

3.4 The Role of Material Incentives To Marx, the distribution of income would, in the first phase of communist development, be guided by the contribution of producers calculated in hours of labour time (Marx, [1875], p. 86). Cockshott and Cottrell suggested that this has the benefit of what may be considered a modern ‘levelling mechanism’:

If accounting is done in terms of labour time, then the fraud of professional differentials becomes a little too transparent. Why should a secretary get paid only 30 minutes for each hour that she works, whilst professionals in the next office get paid 2 hours for each hour they put in? (Cockshott & Cottrell, 1993, p. 38)

42 According to Horvat, free access to goods and services was inconceivable since “needs or wants of human beings are limitless” (Horvat, 1964, p. 132). This may be an oversimplification. At a certain point the energy necessary for finding, collecting, storing, and consuming goods and services, even at zero monetary costs, will exceed the utility derived from them, as also pointed out by Lange (1937, p. 141-142). What is a more persuasive argument against free access is that at zero costs goods and services will likely be used inefficiently. For instance, bread draws more resources from society in its production than low-quality animal fodder, but at zero costs for both goods, a farmer may elect to use bread the same as fodder to feeds its livestock. Attempting to police the use of resources in response would be difficult, intrude on the privacy of citizens, would cost additional resources, and require a bureaucracy with some coercive powers, which contradicts the ‘statelessness’ of ‘free communist’ models (see e.g.: GIC, 1930). In any case, this is rather inconsequential since this type of communism has no mechanism which allows for the rational allocation of resources. 43 Material incentives are only effective when they can be converted into goods and services. In the administratively fixed prices of goods and labour-power, and subsidies for essential commodities, saw a disconnection between the monetary rewards for labour and the shortage of non-essential goods, creating a disincentive resulting in high rates of absenteeism (Mesa-Lago, 2019). It would be necessary for the supply of goods to match the availability of labour points or currency. This is a question of economic planning, of course.

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Albert and Hahnel believe that rewarding people for their productivity is unfair, since it advantages those with superior physical or mental capacities ( Albert & Hahnel, 1992, p. 42; Albert, 2003, p. 36). Marx was well aware that “one man is superior to another physically or mentally and so supplies more labour in the same time, or can work for a longer time” (Marx, [1875], p. 86). Therefore, remuneration will be arbitrary to a degree, but this is ‘justified’ insofar as it is necessary before distribution can be guided by self-defined ‘needs’ in a more developed communist society. Nevertheless, Albert and Hahnel argue instead that workers should be randomly drafted to evaluate various work tasks according to their intensity, desirability, and so on, in order to score individual labour contributions according to ‘effort’ and ‘sacrifice’ (Albert & Hahnel, 1992, p. 42; Hahnel, 2005, p. 190). This has some historical precedent. In the people’s communes of China, work points were usually assigned on the basis of work rate, tasks, dedication, intensity, and other such norms (Ahn, 1975, p. 647). While it took into account varying levels of performances, its drawback was the “difficulty, if not impossibility, of setting rational norms for so many pieces of work and moreover, of assessing the quality of completed work” (Ahn, 1975, p. 647). Indeed, workers drafted to evaluate work tasks, in the Albert-Hahnel model, will also have limited knowledge about many tasks they are expected to assess, and will therefore produce arbitrary evaluations, i.e. this proposal does not fix arbitrariness, compared to equal hourly remuneration, but it may be less technically feasible, as the following example will show.

Twin Oak, an , implemented ‘labour credits’ as proposed by psychologist B.F. Skinner. In this scheme, the less desirable someone found a particular activity the more labour credits were assigned to it, and vice versa. This had the perverse effect of demoralising workers that performed activities they otherwise considered rewarding. Additionally, not enough labour credits could be withdrawn from other activities in order to raise enough to induce people to wash the dishes. Eventually then, the community decided to equalise remuneration and rotate the washing up duties (Kuhlman, 2005, p. 108-109).44

A final problem with the Albert-Hahnel proposal is that material incentives are unconnected to performance, rewarding effort and sacrifice instead. There is therefore no built-in mechanism for producers to adjust their activities to consumer demand. This gives cause to doubt the technical feasibility of the Albert-Hahnel incentive model. A feasible incentive design will have to stimulate individual productivity, as well as marry individual contributions to certain economic performance measures related to consumer demand.

Additionally, we should pay attention to the question of re-allocating labour-power. Fotopoulos believes that supply and demand should guide remuneration arguing that it could attract workers to branches of production which face a shortage of workers (1997, p. 259-261). The specific value of

44 Evidently, these findings cannot simply be extrapolated to a hypothetical, (post-)industrial, urbanised socialist society of millions of citizens, but should merely be taken as an indication of a possible defect in the incentive model of Albert and Hahnel.

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(non-basic) vouchers should, in his view, depend on the supply of workers and the demand for the type of work in question. Cockshott and Cottrell similarly suggest that:

In a socialist economy, too, there may well emerge shortages of specific skills relative to the demands of society, and there has to be a mechanism for enlarging supply. Within a socialised system of education and training and labour allocation it should be easier to project and advertise potential shortages, and to induce recruits into the needed specialisms with the promise of greater choice of work project if they pursue the targeted careers. If this did not ensure adequate numbers of people entering the trade or profession then either direction of labour or the payment of ‘rents’ over and above the regular labour tokens would be required. (Cockshott & Cottrell, 1993, p. 31)

Since information is freely and immediately shared between production units belonging to the same cooperative , the request for additional labour-power can be easily transmitted through horizontal and vertical links. While labour-power, unlike many other resources, cannot be re-allocated at will, moral and material incentives can be in place to seduce workers to (temporarily) come to the aid of other production units that face acute understaffing (and not merely massage certain medium and long term labour supply developments).

Compressed wage inequality was associated with higher productivity within the context of worker participation. However, without income differentials, will workers put in the effort to pursue skilled specialisations that require educational investments, or will it result in a society-wide shortage of much-needed skill, such as medical expertise? Minimal wage differentials in Cuba (approximately between 4:1 and 5:1;45 Mesa-Lago, 2019) did not result in a shortage of professional workers. On the contrary, in combination with free higher education, Cuba faced a chronic shortage of physical low- and unskilled labourers. Notably, manual labour was considered less dignified, and lower remuneration reinforced this attitude to an extent (Linger, 1992, p. 123-124). Thus, in such circumstances it would be necessary to introduce wage differentials between branches of production to attract more workers to a given branch.46

Cockshott and Cottrell speculate that it may also be necessary to introduce three income categories within workplaces to promote productivity (1993, p. 32), as was also practised in some people’s communes of China (Ahn, 1975, p. 647). Indeed, the “main weakness” of this approach “was the difficulty of classifying each peasant into one of three grades since each member's performance varied with the specific conditions and types of jobs he performed” (Ahn, 1975, p. 647). It may be necessary to promote productivity in this way, in spite of the arbitrary boundaries that will have to be drawn. This

45 Income differentials in cooperatives are similarly approximately 4.5:1 in Mondragon cooperatives, for example (Scheickart, 2002, p. 69). 46 In Cuba, it was addressed by organising construction brigades. Thus, “Joining a mini-brigade offered the almost-certain material incentive of getting an apartment, plus the experience of learning new skills and sharing in a socially valued project with others” (Linger, 1992, p. 124). From the perspective of republicanism, national service mobilisation for socially valued projects may also be an attractive policy option.

45 An Institutional Design for Republican Socialism The Socialist Community of Citizens is so since slackers can erode solidarity and group cohesion, which is unconducive to the of republicanism in the workplace. When dismissal of slacking members is not yet desirable or needed they may be placed in the lower category. By the same token, we might want to encourage productivity by reserving bonuses for positive performances. Thus, in my view, Cockshott & Cottrell’s proposal should be taken up.47

As noted earlier, workplace participation yields the highest improvements in productivity when it is combined with profit sharing, particularly through individual control of capital assets. Evidently, this cannot be replicated in a socialist economy. Individual control of capital assets is out of the question, considering that all productive property belongs to the political community, and the profit motive is curtailed alongside commercialism. However, the latter can be mimicked insofar as collective performance can be rewarded, as Laibman suggests (2011, p. 37-39). Thus, those production associations that plan ambitiously and achieve their goals are entitled to higher income. In this way, workers are materially invested in better collective performance, as in profit sharing schemes, with the distinction that the goals reflect the social and political priorities established by the political community, rather than by the private means and ends of the market.

Laibman proposes that the variable income of an association can be further increased by including solidarity, community, or ecology measures in the reward function. Enterprise ratings in these fields would be scored by relevant institutions, which would be no more arbitrary than academic grading (Laibman, 2015b, p. 321). However, since access to bonuses is a zero-sum game we should be careful not to overly encourage non-productive social activities that could detract from the production of wealth. Much like happened in the Tachai/Dazhai brigade in Maoist China that used a third variant of labour norm remuneration, which attempted to de-emphasise work point acquisitive morale. Political attitude and became important measures of individual rewards, to the detriment of labour productivity (Ahn, 1975, p. 647). It is not expedient to prioritise or emphasise non-productive activities, save for those directly related to sustainability (such as the development of skills for self- government as well as ecological sustainability).

From the perspective of republicanism, a potential source of injustice in my remunerative proposal (which combines parts of Laibman’s and Cockshott’s and Cottrell’s proposals) is that workers can be moved from one category to another on a whim. To mitigate this, the lowest and basic remuneration rate should be enough to cover basic amenities so that workers do not become destitute and dependent should they be placed in the lowest category. Workers should be informed of their placement in one of the categories, particularly when it is lowered, well in advance. Workers will further have limited knowledge of individual performances. The candidates for bonuses should for this reason be drawn from work teams that have more intimate knowledge of one another’s contributions. The norms for

47 Which of course cancels out the benefits of the ‘levelling mechanism’—likely a necessary sacrifice.

46 An Institutional Design for Republican Socialism The Socialist Community of Citizens evaluating individual performance should be formulated by the workers themselves and codified. This would only mitigate, but not prevent, arbitrariness, which inevitably arises as a result of subjective judgement. Unavoidably then, due to the subjective nature of peer-based compensation, workers will occasionally find their efforts unacknowledged or misjudged and should have access to ‘voice’ and ‘exit’, as well as recourse to mediation.

Thus, consumable material wealth in a socialist republic should be composed of six elements: first of all, unconditional access to basic infrastructure, such as healthcare (as discussed in the first section of this chapter); secondly, a constant portion, or basic rate, the lowest wage category that one can be placed in. These two elements combined should guarantee a relatively comfortable level of subsistence, which is thus independent of the arbitrary will of others, in order to secure freedom in the republican sense. On top of this basic level of material wealth, there is variable income, which can be divided into three categories: premium payment for those workers employed in a branch which experiences a shortage; two bonus tiers for individual performance; and a bonus for collective performance (which should reflect public priorities, rather than the profit motive). How these so-called public priorities or goals for production associations can be established will be discussed subsequently.

47 An Institutional Design for Republican Socialism The Socialist Community of Citizens

Chapter IV: Planning and Allocation in the Socialist Republic

4.1 Information and Incentive Problems in Economic Planning If economic and political self-government are to be mutually reinforcing then the economy should be treated in much the same way as politics, i.e. as a body made up of public and quasi-public organs whose scope and powers are defined and limited constitutionally, directly controlled by citizens, and where public institutions are geared toward the common good (public welfare) rather than particular interests. One obvious advantage of this approach to economics would be that it ensures symbiosis between the economic and political sphere instead of having them work against one another, as in ‘distributism’ or ‘property-owning democracy’ (e.g.: Cooney, 2001; , 2016), in which the logic of capital accumulation and particular material interests stand in contradiction to the logic that government, through pre- or redistributive policies, seeks to enforce—this calls into question the potential longevity of such an approach to securing republicanism in the economy.48 We have already established that the predominance of the general interest cannot be reconciled with free competition and that the anarchist and Marxist communist aim of allocation of resources without prices is infeasible. To reiterate, the aim of radical republican political economy is to overcome the impersonality of market forces. The macro-economic framework will thus have to induce economic activity that is guided by public welfare objectives rather than the quest for private gain. In order to design such a framework in which self-governing production associations can operate as a public service we need to first of all establish the relevant criteria of feasibility. For this purpose we will turn to the ‘economic calculation debate’ to provide a concise overview of the arguments for and against economic planning. It is clear that Soviet-style central planning suffers from chronic shortcomings in terms of feasibility and cannot be reconciled with republicanism. Nevertheless, using it as a reference point will prove useful.49 48 Conversely, as we have seen, it has been argued that democracy and socialism are structurally incongruous. Makovi argues that “democracy and socialism are fundamentally incompatible, and therefore, that democratic socialism is logically incoherent” (2016, p. 3). This is supposedly so since democracy is a means of limiting power while socialism would require “unlimited power” (Makovi, 2016, p. 24) in the sense that all economic resources are to be legally concentrated in the hands of the state and their use to be subject to central control, subordinating all local initiative to the central plan (even if ‘democratically’ established): “The political and economic systems simply do not match up in any coherent fashion”, Makovi concludes (2016, p. 3). 49 Rejection of the Soviet experience as ‘state-capitalism’ tends to produce intellectual complacency, as was also mentioned in relation to the SPGB. For instance, Nappalos (2012, p. 291) tells us that Marxist-Leninist regimes “resembled capitalism more closely than” a moneyless, marketless communist economy. Since the Soviet Union was a failure of capitalism, socialists stand to learn little from it, presumably. Yet Nappalos reproduces the same information overload problems in his summary of ‘anarchist communist economics’ that the Soviet planners grappled with, but now at the level of the neighbourhood and workplace assembly. This solves nothing, since all that is changed is that now everyone is expected to be a Gosplan planner and deal with the same innumerable ‘equations’, expressed instead qualitatively in the absence of even accounting prices. Thus far from solving the economic calculation problem through decentral , it increases the information overload problem in actual fact.

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Marx and Engels saw prices as products of the anarchy of the market, generating misinformation on which autonomously operating capitalists and investors act. This is part of a parcel of causes that contribute to disturbances to capitalist reproduction, although it is not in itself considered to be the cause of economic crises in Marxist theory (Shaikh, 1978). Prices, to them, were mystifying the underlying source of value: quantities of social labour time. Society, if it took possession of the means of production, could simply assess the various needs in society and the availability of resources in labour-time and apportion labour to various branches of production. Von Mises (of the ‘Austrian school’ of right-libertarian thought) famously turned this argument on its head. Without market prices, there would be no information for producers to decide between alternative uses of goods—like we have seen in the brief discussion of ‘advanced communism’ in the previous chapter. A which tried to calculate opportunity costs with administratively fixed prices would not be any more rational, however. Since these prices are not the result of bidding they would be entirely arbitrary and no more useful than the absence of prices in their entirety. Planners would again need to guess how many resources should be allocated where. As Caplan summarises, “if the state owns all the capital goods […] there will be no market for capital goods. With no market for capital goods, no capital- goods prices. And without prices, there will be no numbers to run so as to determine the cheapest way to do things” (Caplan, 2004, p. 34). Therefore, the economic calculation problem entails that the necessary information for economic decision-making cannot be generated by planning authorities, and even if it could, it could not be compiled, evaluated, and used to plan an economy since it would cause an information overload in the centre due to a lack of human processing ability. Or as Laibman (2020b) summarises:

How can a central authority absorb and process the mounds of information, about the needs of consumers on one side and production possibilities of producers on the other, and put together a consistent plan to create and distribute goods across the social and geographic territory of a modern economy? This is the “millions of equations” critique of central planning. It draws on the interdependence of economic actors and the almost unimaginably large number of possible products, techniques of production, routes of delivery, distributions, patterns of consumption, etc., and concludes that creation of a single central plan by a unified human will must be inherently impossible. Moreover, a Central Planning Board that attempts this even assuming that the planners are not subject to temptations of power and misrule would create errors, inconsistencies and chaos, not to speak of massively suboptimal outcomes, that would truly be the “road to serfdom” (Hayek, 1944). The Central Planner would have to have the “universal mind” of Laplace; would have to not only solve millions of equations, but do that many times every day, to accommodate changes that are constantly taking place.

Thus, Von Mises concluded that civilisation may well collapse as a result of socialism (Caplan, 2004, p. 36). Rothbard claimed that Von Mises had shown that socialist society could not function “above the most primitive level” (Rothbard, 2000, p. 201). Let us revisit the ‘economic calculation debate’ briefly.

From studying war economics, Neurath concluded in the 1920s that calculation in-natura alone would be sufficient in socialism. However, while theoretically feasible, in practice it would be far too time

49 An Institutional Design for Republican Socialism The Socialist Community of Citizens consuming to plan an entire economy in this way (due to millions of equations that would need resolving, without even a common unit of measurement) (Cockshott, 2008). The reduction of economic information to ‘prices’, Neurath believed, destroyed information, but may be necessary to prevent information overload. A common unit of account would therefore be required and socialist theorists have found recourse in labour time (e.g.: GIC, 1930). While labour-time is heterogeneous, it would permit the comparison of social costs. Even so, it is insufficient on its own, since (labour-time) costs do not equal desirability and consumer demand (see footnote 38, page 40-41).

The ‘Lange-Lerner’ model attempted to tackle Von Mises’ arguments next. It proposed that the means of production could be owned publicly and that a CPB would artificially mimic the functions of market forces. Through trial-and-error prices would be set at market clearing levels (enterprise management would be instructed to do so by the CPB) by being lowered when there is a stock surplus and being increased in instances of shortages. In theory this solved some information problems, but at the cost of reintroducing monetary calculations and even something resembling markets into socialism. The ‘Austrian’ critics have responded in different ways. Boettke and Leeson attempt to salvage the claim that socialism was impossible by conceding that public ownership of productive resources could endure but that socialism, due to inefficiencies arising from calculation and information problems, could not achieve its intermediate aims of advancing the material forces of production to prepare for a transition to communism, and is in that sense “impossible” (Boettke & Leeson, 2005, p. 156-157). According to Hayek, the Lange-Lerner model assumed a ‘managerial’ view of economic decision- making. Behind the decisions of buying and selling lies an ‘entrepreneurial’ function, which takes into account qualitative local and tacit information that cannot be quantified or transmitted to the centre— even if aided by artificial market mechanisms (Rothbard, 1991, p. 58; Philips & Rozworski, 2019). Relative autonomy, or decentralisation, by basic units would be required so that they can act on their qualitative knowledge. Yet, of course, if production units operate autonomously through horizontal transactions and contracting, then we can speak of a market economy with, as Nove put it, a “species of commodity production” (1991a, p. 43). The alternative to market transactions of this kind is that the economic plan is made binding on all production units, sacrificing unit autonomy, in which case the aforementioned information problems arise—the crux of the dilemma for socialist theory.

With the dissolution of the Soviet Union, the Austrian critics may appear to be vindicated. How do their arguments compare to the empirical reality of Soviet experience? The strength of their arguments is difficult to maintain, one can immediately infer. Far from being ‘impossible’, ‘primitive’, or collapsing civilisation itself, Soviet-style socialism endured for almost seventy years and improved the material standard of living considerably:

in 1913, Mexico and [what would become the] USSR had almost exactly the same income per capita […] Yet, in 1989, Soviet income per capita was 46 percent larger than Mexican income, compared to about 1 percent larger in 1913 […] Despite suffering through two incredibly damaging world wars, a , the Stalin-induced famines that

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killed millions in the 1930s, his jail and gulag system that killed millions more, and a range of environmental disasters, the Soviet Union’s growth over the period of communism put Mexico’s to shame. (Kenny, 2010)

Furthermore, the ability of the Soviet economy to mobilise its resources for the purposes of was one of its most impressive feats (Schweickart, 2002, p. 58-59). Caplan thus concludes that Von Mises overstates his claim, and while he agrees that rational economic calculation is impossible in socialism, this does not mean that socialism itself is impossible, only inefficient and suboptimal (Caplan, 2004, p. 48-49). For those committed to a socialist revival this is hardly a comforting conclusion.

What then were the main problems of the Soviet economy? After the disintegration of the Soviet Union, in the 1990s, some controversy emerged about the economic causes of its collapse. In terms of technical and allocative efficiency, the Soviet Union performed surprisingly well according to measures using neoclassical models (Whitesell, 1990; Murrell, 1991, p. 65-71). However, slow technological meant that more time was available to optimise the use of existing technology, thus inflating technical efficiency. On the whole, waste as a result of a learning curve for applying new technology is offset manifold by increases in productivity from said new technology. Indeed, slow technological progress itself was a major, if not primary, cause of economic stagnation and decline, in the Soviet Union as well as under other Marxist-Leninist regimes, such as North Korea (Chattopadhyay, 1994; Kim, Kim, & Lee, 2007, p. 579). On the issue of allocative efficiency, Nove showed that some manifest inefficiencies could not show up at the macro-level, thus painting a misleading picture (Nove, 1991b). The consensus of this post-Soviet debate was that the primary problems of the Soviet economy were “stagnant technologies”, “resource hoarding, poor information, and poor incentives” which “resulted in increasing allocative inefficiency” (Escoe, 1996, p. 79).

In terms of incentive problems, the major problems in the Soviet Union were as follows. Soviet-style planning required that enterprise management be incentivised to carry out the plan targets assigned to it by the Gosplan (‘CPB’). Therefore, bonuses were reserved for those enterprises that fulfilled or exceeded their quota. This in turn lead to the perverse incentive that caused the doctoring of information regarding stock and input reserves. If few stocks were reported, lower quotas were assigned to enterprises, making it easier it fulfil or exceed them. Information problems, then, were compounded since planners worked with chronically distorted information. In spite of these problems one of the foremost causes of economic decline was the slow technological progress as a result of disincentives. After extensive growth had been exhausted intensive growth failed to pick up, resulting in stagnation (Chattopadhyay, 1994). Enterprise managers had no motivation to invest in new technology since doing so disrupted the production process threatening the fulfilling of quotas, without pay-off through higher profit margins in the future (Devine, 2011, p. 64). Undoubtedly, then, information problems were a contributing factor in the economic failing of the Soviet Union, but as

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Caplan notes, incentive problems were a major factor in economic underperformance as well (Caplan, 2004, p. 41-43, 49).

Thus, we need to achieve two things if we wish to formulate a feasible socialism: 1) solve information problems; 2) solve incentive problems. This means that consumer preferences need to be revealed, that producers will need incentives to supply accurate information to planning authorities, quantitative information will need to be generated and processed, producers will need incentives to carry out the plan targets, producers will need to have the capacity to act on local and tacit knowledge, and finally anti-innovation bias will need to be overcome or minimised. In addition, this will need to be resolved whilst accommodating and encouraging republican values.

4.2 Markets and Planning in Socialism To Nove, horizontal and vertical links should be combined for any economy to operate (near) optimally (Nove, 1991a, p. 43). As we have seen, horizontal links imply that there is market exchange, since allocation of inputs cannot be mediated through qualitative deliberation. Markets, unrestrained by central or vertical stipulations and restrictions, will yield suboptimal outcomes since the sum of private wills, weighed by their economic power, will scarcely correspond to the public good. Here I will discuss the ideal balance between horizontal and vertical links, judged by the criteria of feasibility and republicanism. In order to do so, let me first define the process of economic planning in simple terms, with the assistance of Castoriadis:

A production plan, whether it deals with one factory or the economy as a whole, is a type of reasoning (made up of a great number of secondary arguments). It can be boiled down to two premises and one conclusion. The two premises are the material means initially at one's disposal (equipment, stocks, labor, etc.) and the target one is aiming at (production of so many specified objects and services, within a given period of time). We will refer to these premises as the “initial conditions” and the “ultimate target.” The “conclusion” is the path to be followed from initial conditions to ultimate target. In practice this means a certain number of intermediate products to be made within a given period. We will call these conclusions the “intermediate targets.” ([1957], p. 119)

We may recognise three levels of economic planning: macro-economic planning, strategic planning, and detailed planning, concerned with the broad framework in which economic activities can be shaped, the medium- and long-term development of investment patterns, and the planning of the specificities of goods and services, respectively. In Soviet-style command economies the ultimate targets were fixed administratively using estimations of what would be required to achieve certain politically defined objectives related to economic development (Laibman, 2015a, p. 331). Up until the Kosygin-Liberman reforms of the 1960s, all levels of planning, including detailed planning, were fixed at the central level (Laibman, 2015a, p. 331). How, in brief, may we go about defining these premises?

First of all, a broad macro-economic framework, in the form of a budget, should be in place which can guide economic activity between different spheres. A CPB would develop a number of feasible

52 An Institutional Design for Republican Socialism The Socialist Community of Citizens proposals that divide the budget between personal consumption, fixed investment, and collective consumption (healthcare, education, research and development, infrastructure, housing, etc.). Alternative proposals may be put forward when a minimum threshold of signatories is reached. Necessity dictates that the number of proposals be limited so that effective deliberation and decision- making can follow. The proposals divide the total available quantities of labour-power and estimate the implications for a given division of the budget, for example reallocating x percent of the budget away from, say, public housing and the effects of this given the estimated demographic trends. The proposals are put up for deliberation and ballot in the general assemblies within the polity.50

Of course, a budget does not address macro-economic imbalances (e.g. unemployment, inflation, regional imbalances, over- or under-investment) or priorities, nor does it deal with detailed planning. This can be addressed in different ways. One way is to let the market do some (or most) of the heavy lifting. This was first integrated into the Lange-Lerner model, as we have seen. The Lange-Lerner model cannot, however, calculate the costs of intermediate goods unless it subjects them to the same sort of market mechanism (Nove, 1991a, p. 116-117).

The Lange-Lerner model has an anarchist counterpart in inclusive democracy. This is Fotopoulos’ correction of Bookchin’s “mythical post-scarcity” (Fotopoulos, 1997, p. 256). Inclusive democracy similarly uses an artificial market, taking into account supply and demand to determine the value of consumer goods, services, and vouchers (which are cancelled after use). He does not clue us in on how to price or allocate intermediate goods, other than deciding that production units of final goods could place orders for intermediate goods (Fotopoulos, 1997, p. 267). If vouchers are cancelled after use, as intended, they cannot serve as means to acquire intermediate goods; if instead vouchers can be re-used to purchase intermediate goods they become a medium of exchange and the ‘planning’ would give way to market forces.

The latter would be the sort of socialism advocated by Schweickart (1993) and Nove (1991a). The market would be entrusted to generate detailed planning—there is no need for the CPB to determine the specificities of the output of any and all bakeries, say. Macro-economic planning would consist of massaging out some imbalances through indicative and strategic planning, using industrial policy, taxing negative , subsidising positive externalities, public investment, and so on. In this way, more socially desirable outcomes are generated than would otherwise emerge spontaneously from

50 Since more than two budget proposals are available, we may need two or three rounds of voting, with the last round having the two most popular proposals up for a vote. If the votes can be tallied up and transmitted quickly, a single meeting of the general assembly may accommodate three rounds of voting after one round of deliberation. This is necessary to not cause voter fatigue by asking citizens to show up on three separate occasions in short succession. Since the plan proposals deal with high levels of abstraction and are already balanced to take into account the approximate effects for society as a whole (as opposed to policy proposals that suggest how the budget may be used concretely) it is also not necessary to pass the votes back and forth between administrative levels.

53 An Institutional Design for Republican Socialism The Socialist Community of Citizens free competition alone. Strategic planning would result from credit supply of public banks, government investment, and the investment patterns developed by cooperative and individual cooperatives. A market socialism of this type would allow for a public sector (managing ‘natural monopolies’), a large cooperative sector and a smaller private sector subject to restrictions (Nove, 1991a, p. 192). A capital asset tax—its rate determined in the national budget—would be levied as a sort of rent for the use of publicly owned means of production in order to generate funds for public investment, disseminated through a network of public banks (Schweickart, 2002, p. 53-54, 56). Enterprises would respond to and shape their activities, and seek out horizontal contracts, in relation to market price signals, investment patterns, credit and interest rates, and so on; i.e. through market forces within the context of a degree of social control over investment.

Alternatively, Devine has suggested that social control of investment be taken one or two steps further. At the macro-economic level, the strategic priorities, as interpreted by society, should be identified politically, in addition to establishing the budget of the polity as we discussed. The primary inputs are subsequently priced in accordance with said priorities by a CPB. This provides the framework in which the activities of enterprises can be regulated and shaped. Where in market socialism the allocation of intermediate inputs is subject to autonomous bidding, exchange, and therefore market forces, we may instead delegate this to negotiated coordination bodies (Devine, 2002; Devine, 2011). Market socialism would not suffer from the information and incentive problems previously discussed.51 However, the impersonality of the market and profit motive, including the corresponding boom-bust cycles, which we seek to overcome, would be preserved. It makes sense then to take up Devine’s proposal to establish coordination bodies that regulate the activities of their member associations to bring them into harmony. This appears especially conducive to our aim of republican political economy, insofar that self-government, within a mixed ‘constitution’ of public bodies, would extend beyond the scope of the workplace into strategic investment decision-making.

Such bodies—functional and geographic in scope—would be composed of various stakeholders, including suppliers, consumer representatives, producer representatives, community representatives, and so on. The negotiation bodies, through open-ended deliberation, would decide between strategic investment options, weighing enterprise performance against the shared interests in medium and long- term outcomes. There is thus a considerable emphasis on qualitative decision-making to overcome the impersonality of market forces. Enterprises, in turn, are responsible for detailed planning, deciding what and how to produce given the primary input prices. They exchange their goods on the market. Therefore, while market exchange exists market forces supposedly do not arise, according to Devine (2002, p. 76), due to deliberative bodies exercising cooperative control over investment decisions and input availability (much like in incidentally). The advantage of negotiated coordination

51 Such problems may emerge as diseconomies of scale internal to large-scale companies, but are constantly checked by market forces.

54 An Institutional Design for Republican Socialism The Socialist Community of Citizens of this type is that there is a large degree of emphasis on self-government and the restriction of market forces. Of course, the existence of market exchange will exercise some sort of corrective pressure to economise, independent of conscious control—which, should be noted, is not inherently contrary to republicanism (its relationship with socialism, and especially the Marxist ‘law of value’ is more controversial, see: Tshushima, 1956). From the perspective of feasibility we may in fact not want to do away with corrective pressure through autonomous activity entirely, since soft budget constraints were a contributing factor to economic underperformance in socialist societies of the twentieth century (Kornai, 1986, p. 18-20). We may well wonder, however, if open ended qualitative deliberation, taking into account the wide variety of interests that are to be represented in negotiation bodies, could yield effective and optimal decision-making outcomes. While the basic outline provided by Devine is potentially sound, we should thus look for possibilities of optimising the planning procedure.

The Albert-Hahnel model will prove of little use in this respect. In this model economic planning takes place on the basis of negotiated inputs and outputs. This negotiated coordination does not occur through deliberative bodies but rather through horizontal iteration under the auspices of an Iterative Facilitation Board (IFB, in effect a ‘libertarian’ CPB). Consumers—who are all members of local, regional, and national councils—are expected to draw up a list of all consumption articles they intend to consume for a year as well as how much they intend to contribute productively to society. On the basis of these inputs the libertarian CPB calculates shadow prices for all goods and services which are then projected to all consumers and producers. On the basis of these shadow prices the consumers are expected to revise their proposals. Once submitted, the CPB will re-calculate the shadow prices. Through a number of iterations the prices will approximate optimal and desired outcomes until a final plan is determined. Macro-economic planning (the role of a political community is absent) and strategic planning are resolved through horizontal iteration, whilst detailed planning is left to self- managed enterprises.

Hahnel believes that an annual pre-order is not as complicated as it sounds. One would simply adjust the consumption list of last year here and there—or in fact, not at all—since some adjustment throughout the year is possible. If this were true, then, as Wright asked, why can production units not simply reuse yearly data on consumption rates that are already available to them and adjust them on the basis of demand forecasting techniques (Hahnel & Wright, 2016, “How Useful Is Household Consumption Planning?”)? The Albert-Hahnel model does not have access to means to enforce the final plan or recourse when a council rejects the final plan proposal—since the libertarian CPB naturally does not have the power to command or enforce. Additionally, annual pre-order lists are composed of general categories and producers have no institutionally designed incentive to produce what consumers want (since material rewards are unconnected to consumer satisfaction). ‘Parecon’ has thus been attacked on various grounds, such as its inhibiting of spontaneity on account of annual pre- ordering (Fotopoulos, 2003), needless, demoralising, and obsessive comparison (Schweickart, 2006),

55 An Institutional Design for Republican Socialism The Socialist Community of Citizens requiring too many meetings (Albert & Hahnel, 1991, p. 88), and the CPB acting as a ‘Walrasian auctioneer’ with enterprises having no control (Laibman, 2015a, p. 335).

The commitment to horizontal iteration, with the irrationalities that it produces (such as annual pre- ordering), is an outgrowth of the commitment to and bias against central authority (whatever the particular species), as Laibman also observed (2014, p. 226; 2015a, p. 337). Freed from the limitations of libertarian horizontal collectivism we have a wider range of options to enhance economic planning through vertical integration. If we swing the other way of the spectrum then, we find the Cockshott-Cottrell model of economic planning. Like the Lange-Lerner model, the Cockshott- Cottrell model uses an artificial market mechanism for consumer goods. The social costs of goods and services are computed through the tracking of the labour-power (measured in labour time) expended on products as they pass through the chain of production until their final use. Prices of goods and services are initially set at cost-price, with the output at cost-price acting as the quantitative indicator for changes of intermediate inputs. Thus, if stocks deplete at rates faster than they are currently resupplied, the price of a given good is increased above its social costs; if stocks deplete too slowly, the price is lowered to market-clearing levels. The numerical deviation (from market-clearance level) from the cost-price is used to recalculate inputs by a CPB plugging them into an optimising programme: additional resources are allocated to wherever shortages emerge; resources are re-allocated elsewhere where surpluses exist.52 Where the Lange-Lerner model has no adequate solution to the allocation of intermediate inputs, the Cockshott-Cottrell model demonstrates that a network of computers, connected to a central supercomputer, could use optimisation algorithms to allocate resources directly to enterprises that produce for end use (Cockshott & Cottrell, 1993). While planning authorities, armed with human processing ability alone, could never solve the millions of equations necessary for an integrated economic plan, computer processing power is up to the task (Cottrell, Cockshott, & Michaelson, 2007). In this way the flow of intermediate goods is determined. Associations that produce intermediate goods are instructed to allocate resources, and as such no horizontal (i.e. market) transactions are required. Furthermore, enterprise managers are not expected to increase or decrease production in an effort to maximise enterprise profits, as in the Lange-Lerner model, but do so simply because they are instructed to (Cockshott & Cottrell, 1993, p. 107).

Computerised central planning resolves the problem of millions of equations (Brewster, 2004, p. 69), but it cannot incorporate local or tacit knowledge since prices and allocation of intermediate goods are adjusted exclusively on the basis of quantitative considerations (with some politically defined

52 Incidentally, one of the advantages of this mechanism for pricing is that it precludes premium pricing. Presumably, in a planned economy the sprawling variation and duplication of consumer goods would be limited and the price would communicate the actual quantity of resources that were used up in the product (and, in relation to consumer demand acting as feedback, would say something about the ‘quality’ thereof), rather than brand marketing. It would enhance consumer trust that prices convey effectively the relative quality of goods (does a higher price equal a better shampoo or is it an outcome of marketing strategy and brand recognition?).

56 An Institutional Design for Republican Socialism The Socialist Community of Citizens constraints). One irrational outcome of direct allocation on the basis of deviations from labour values is that, for example, seasonal goods will be depleted quickly in a given period. Quantitatively, this indicates that more intermediate goods should be supplied. Yet, we hardly wish to increase the supply of Christmas articles available for consumption in January. While obvious, such qualitative considerations for a myriad of goods (many less obvious) cannot be aggregated by the centre lest it is overloaded with information. (Some intermediate body—between the CPB and enterprises—that can make qualitative corrections would be needed.) Nor does the Cockshott-Cottrell model have a convincing solution to how enterprises can be compelled to submit reliable data to the centre (Brewster, 2004, p. 68) or, for that matter, how novel technology will be implemented. While it may be narrowly justified from a republican perspective that production activities are subordinated to the plan —if the plan reflects political priorities established through direct legislation—the scope of economic self-government would be limited to within workplaces, deciding between options of how to execute the plan (like in the Albert-Hahnel model). If economic and political self-government are to be mutually reinforcing, a better balance, if at all possible, must be struck.

Multilevel Democratic Iterative Coordination (MDIC) integrates some of the elements of the previous models, and can, in effect, be seen as a synthesis of many such models—even if it did not emerge as deliberate attempt to combine them (Laibman, 2015a, p. 337, 339-341). In this model enterprises formulate a draft plan and are encouraged to plan ambitiously as well as realistically through the reward function of variable income allocation, which is determined at the centre. Associations are entitled to higher rewards if they propose a higher output, but if consumption of output falls short of their target their rewards are considerably lowered. In this way enterprise plans will reflect ambitious yet realistic goals (Laibman, 2011). Associations decide what assortment of goods they want to produce on the basis of estimated consumer demand, for a given plan period (monthly, quarterly, annually). Since the level of detailed planning is closely nested to interaction with consumers and since there is an inbuilt incentive that encourages sensitivity to consumer demand, the plans will reflect local as well as tacit knowledge of consumer demand.

After being drafted (revised, and re-drafted) the plans are subsequently aggregated and brought into harmony with the social and political objectives (qualitative)53 and macro-economic balance (quantitative) at the central level (Laibman, 2012, p. 35-36). It is of course important that the centre does not ‘correct’ the plans entirely according to optimising algorithms (as in the Cockshott-Cottrell

53 For example, on the issue of ecology, Cockshott & Cottrell (1993, p. 66) note: “Any decision procedure based upon prices fails to convey information about the ecological and environmental consequences of a course of action, since these are complex and not reducible to an accounting entry. Any non-qualitative assessment of environmental impact is misleading. The environmental consequences of a course of action have to be determined by scientific investigation and resolved by political struggle […] If a hydroelectric scheme is proposed that will flood a valley which is both a beauty spot and a unique habitat it is pointless to search for some economic formula that will decide if the project should go ahead. The problem is political, not economic.”

57 An Institutional Design for Republican Socialism The Socialist Community of Citizens model), since this would, in effect, mean that tacit knowledge is in large part nullified. Some flexibility and divergence from the quantitative optimal outcome should be allowed. In the simplified model that Laibman (2002a, p. 119) employs for the purpose of theoretical clarification, he uses only a central and decentral dichotomy: the local plans are aggregated by the centre immediately. In closer proximity to would-be reality, the plans would presumably first be submitted to regional and branch federations, where the various associations would interact to inquire why certain investment or disinvestment decisions have been drafted.

Coordination at the higher levels can be enhanced by information technology currently being introduced and developed, which allow for the anticipation of demand to a degree. Consumers’ online behaviour is compiled and subjected to predictive algorithms, which could potentially be more effective than qualitative local knowledge (Morozov, 2019). Thus, “big data, the producer and discoverer of so much new knowledge, could one day facilitate what Hayek thought only markets are capable of” (Philips & Rozworski, 2019, “Structure amid Chaos”). In a socialist society data can be freely shared, pooled, and subjected to algorithms to generate useful information that production units can act on. The detailed plan can subsequently be adjusted on the basis of the relevant quantitative and qualitative information. Enterprises revise and then send the plan up to the centre where it will again be adjusted if so needed. Through the front door of a production unit relevant consumer information is generated that units use to shape their plans, while through its back door the unit is connected to an intricate network of production units that manage their cross-supply chain cooperatively, aided by demand forecasting information technology and optimising programmes, in light of which their plans are reshaped before being finalised.

Once the plans of each association have been drawn up and approved, the plan becomes ‘binding’ on all production associations insofar that their variable income depends on it. The closer a plan approximates measured performance, the higher the enterprise’s collective rewards are (Laibman, 2011). The reserves available for variable income are in principle fixed and therefore access to them is a zero-sum game. In effect this will stimulate competition but not of the market variety. Enterprises will be incentivised to plan ambitiously yet realistically, and their plan is accessible to all other production units. Enterprises therefore compete for a higher ratio of the variable income reserve but have to do so on the basis of cooperative sharing of information in order to increase the accuracy of respective enterprise plans—cooperation, then, becomes the best chance of achieving good results.

Additionally, as I have posited, labour-time computation and labour credits should be incorporated into this basic model of iterative planning.54 Labour credits, to reiterate, are cancelled after use. As a calculating tool they are only used to determine the reproduction rate of a given enterprise, and

54 Non-labour inputs will have to be priced somewhat arbitrarily at first. Renewable natural resources will have to be priced at a level that ensures that depletion does not outpace replenishment, while non-renewable resources will have to be priced at a level at which their depletion is estimated to correspond to the introduction of widely available substitutes.

58 An Institutional Design for Republican Socialism The Socialist Community of Citizens therefore the amount of society’s resources that it can claim for its production process, through shadow pricing. Associations can in principle lay claim on intermediate inputs equal to their output, relative to their social costs computed in labour time (rate of return)—i.e. a quantity of resources that corresponds to its present reproduction rate measured in labour-time. This should serve as a benchmark. Particular industries whose development are considered of strategic priority should have an artificially inflated benchmark to allow a higher rate of inputs that they can request and use than would be justified by their reproduction rate alone. Conversely, some industries may need to be artificially contracted for whatever reason and will have lower rates of inputs made accessible to them. This is in effect equivalent to either an excise tax or subsidisation (evidently, this will need to be subject to legal constraints to prevent arbitrary misuse). Based on the requests that units make on given resources, shadow prices, as an accounting tool, are generated which determine the flow of intermediate inputs to various associations. The values of intermediate goods are matched to the values of consumer goods, i.e. the allocation of inputs is in principle equal to the output. They are directly allocated rather than purchased by associations. No real exchange, therefore, occurs for intermediate goods—there is no transfer of ownership, actual or legal.55

It is not necessary that the centre should determine the entire supply chain. Associations can seek out horizontal links whilst the CPB—or one of its planning liaison offices connected to various levels of planning—makes available the optimal options as well as demand forecasting data. Associations nevertheless should have the capacity to seek out horizontal links themselves to preserve the ability to mobilise local and tacit knowledge. Associations may conditionally lay claim to higher inputs if so needed. Waste of resources is checked first of all by the reward function of variable income geared toward realistic goals. Secondly, the planning offices will track the rate of return for a given period to see if it matches the excess inputs used up in production. This performs the role that credit does in a capitalist economy. The decision of an association to divert from the computed optimal outcome will have a knock-on effect for all other relevant associations and may therefore need to come at a reasonable administrative fee or premium cost of sorts (meaning, relatively fewer resources can be drawn from society’s stock of intermediate goods—in the case of resources requested above its present rate of reproduction, this would be equivalent to interest)—the ideal balance will of course have to be approximated through some trial and error iteration (enough dynamic initiative should be preserved so the cost should not be too high, if there should be a cost at all). After the plan is established, inevitably, miscalculations will come to fore. These discrepancies can be immediately submitted horizontally and vertically, in cybernetic fashion, and will be updated in real time so they can be quickly addressed at the appropriate level.

55 The shadow prices are merely a guideline for the distribution of publicly owned resources. The enterprises are tasked with executing a public service. Effective control over public resources is delegated to enterprises but confined by certain stipulations. Therefore, ownership is retained by society, while associations merely exercise guardianship over the resources in line with these stipulations and directives.

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In the multilevel iterative planning model that I have advocated, the CPB and liaison planning offices have considerable influence as we have seen. Abuse of power is first of all prevented by codifying their authority and subjecting it to political and judicial scrutiny. The CPB receives its mandate from the bicameral legislature and is a purely executive public body. Its members are not entitled to any special privileges or higher material rewards. As such its members have no stake in manipulating the distribution of resources. Evidently, journalistic, political, and academic vetting of official budget plan proposals and estimates should be possible at all times. Independent media would be required so that critical reviews of plan proposals are able to reach the public.56 If the ability of producers to formulate a mandate for the CPB via citizen assemblies would prove itself to be too indirect, then we might also consider forming a “workers’ congress”, a central body whose members are drawn from the intermediate negotiation bodies, in which elected representatives can contest and check the CPB more directly.

A multilevel iterative planning framework (or MDIC, if one prefers) offers a compelling means to overcome the impersonality of the market. At the same time, it balances well the self-government of the association and self-government of the public at large—in contradistinction to the Albert-Hahnel or Cockshott-Cottrell model. Production units have somewhat more freedom to decide their own affairs, including by participating in intermediate coordination bodies, yet, of course, they do not have complete freedom to pursue their own interests by employing the means of production, which they do not own, at the expense of the public good. It is certainly true that material incentives are put in place to induce producers to work towards the realisation of the plan. Therefore, their contribution is not morally or virtuously impelled—there is no viable economic equivalent of ‘civic virtue’ imaginable, or at least not in such quantities that volunteer labour could sustain an entire economy. The difference with the profit motive lies in that profit maximisation is guided by narrow private interests with no necessary regard for greater considerations, whereas fulfilling the output targets should ideally be shaped as an integrated, coherent and social plan. Therefore, material rewards, including bonuses, are supplied in accordance with social goals of the overall plan which tracks public welfare and the common good. Material rewards wed workers to public goals rather than to private interests, even if through material self-interest, by force of necessity.

4.3 Addressing anti-Innovation Bias Finally, we need some means to overcome anti-innovation bias. This is not to say that socialism is inherently biased against innovation in all its forms. If workers are given the ability to act on their local and tacit knowledge they may adjust work routines accordingly. An inert centralised hierarchy may stifle initiative and direct workers to act in a certain way without full knowledge of the actual possibilities hidden in work processes. Workers, when governing their own workspaces, may wherever

56 Independent media in the context of public ownership is another important cause for concern for republicans, which cannot, however, be discussed in this thesis due to space constraints.

60 An Institutional Design for Republican Socialism The Socialist Community of Citizens possible simply streamline production. Self-government of labour may be an effective solution to some diseconomies of scale, in fact. As Kevin Carson argues:

The great investors are almost entirely clueless as to what their supposed “employees,” the corporation managers are doing. The CEOs are almost entirely clueless as to what the branch and facility managers are doing. And the management of each facility are almost entirely clueless as to what is going on within the black box of the actual production process. In the light of this reality, Mises’ “entrepreneur”—so carefully and closely involved in the minutiae of choosing between technical possibilities of production, a brooding omnipresence guiding the efforts of every employee—is largely a construction of fantasy. (Carson, 2008, p. 205)

Given that the decision-makers in a centralised enterprise are far removed from engagement with the consumer, a production association is likely to be better tuned to consumer wants. If decision-making is nested at a lower level workers would be quicker to signal and respond to problems in internal processes or the wishes of internal or external customers (Ten Berge & Oteman, 2010, p. 179). Furthermore, when there is no commercial competition, innovative techniques could be shared. There would likewise not be a parallel development of similar technologies between different corporations. Similarly, changing the assortment of products or fine-tuning existing products on the basis of qualitative and quantitative information generated by consumer behaviour could be done quite simply without disruption to the workflow. What we are concerned with, however, is medium and long-term technical innovation.

The scale of anti-innovation bias in a multilevel planned economy will be less pronounced in comparison to Soviet-style planning. Associations could plan their gross output somewhat less ambitiously for one planning cycle to enable more ambitious planning in next cycles, garnering a higher portion of the variable income—or to keep up with the rate of return of other associations that have already implemented innovative technology. It will be difficult to project the output for longer periods, meaning this can scarcely be integrated into the planning procedure. One might introduce an additional cycle which tracks improvements in efficiency over a number of years, but it is difficult to plan for innovation that may not be available at the beginning of the planning period. Furthermore, the difficulty of medium and long-term innovation is compounded by turnover rates of associations. Workers that expect to have a relatively short-term relationship with a given association will not seek to innovate for the longer term but instead to maximise income for the time of their employment; thus, we might expect that a higher turnover rate will correspond to a higher anti-innovation bias.57

Innovation cannot simply be incentivised through bonuses either. Laibman proposes that active engagement with communities, as we discussed previously, could be included in the reward function. Since this concerns an external relation, an enterprise’s performance can be tracked by community organisations. Innovation, on the contrary, is an internal process entangled with tacit knowledge. It

57 Short-sightedness may also be observed in corporations that attempt to placate shareholders that seek a quick return on their investments.

61 An Institutional Design for Republican Socialism The Socialist Community of Citizens would be difficult to encourage exogenously the implementation of innovative technology, therefore. Monitoring the implementation of new technology would be difficult and therefore its progress can hardly be quantified, measured, evaluated, and appropriately rewarded. Cockshott and Cottrell (1993, p. 63-64) maintain that the level of innovation attained by a given society depends chiefly on the level of resources directed toward research and development, and has less to do with the . This is not so, however. They overlook the anti-innovation bias of Soviet enterprise managers: implementing new technologies would disrupt the production process, threatening the fulfilment of production quotas, while such an investment would not be rewarding to the manager in the future (i.e. no medium or long-term pay off) (Devine, 2011, p. 64). So why bother? Similarly, in a model of iterative coordination, planning for the present level of technical capacity may at times be a safe bet.

As Cockshott and Cottrell note “For R&D to be effective there must be a transmission belt that spans the stages of pure research, applied research, product development, and mass production” (1993, p. 64). The development of new technology (both intermediate and final products, process and product innovation) through publicly funded research is not the problem—the first three phases are not our concern, only their actual implementation. To counteract passivity in introducing available technology, publicly funded research programmes should be set up that have the authority to offer new technology to a limited number of associations—at this stage the new technology would have been tested and shown sufficient promise for improving technical capacity or consumer goods—that are offered installation without income reduction as a result of lower output. This can only be achieved for a limited number of associations since monitoring by members of the research programme is required. Self-reported implementation would give incentives to doctor data. If the pilots are indeed successful (i.e. measurable in output),58 other associations are encouraged to adopt the technology as well or face disinvestment over time through the mechanism hitherto described (allocation guided by respective rates of return, which will be higher for associations that use innovative improvements). Socialist competition, or emulation if you will, takes over at this stage without external monitoring. In this way, institutional anti-innovation bias can be minimised.59

Research projects belonging to or linked with universities (which will be expanded significantly, since they will absorb research and development of the commercial sector) will be subject to review procedures, of course. Similarly, spontaneous, endogenously motivated innovative projects that emerge in society could have access to public resources, allotted to them by lottery (after a minimal review of

58 Innovation of intermediate goods and production processes would improve productivity reflected in lower cost-prices, which should attract more customers (making it measurable). Consumer product innovation would likewise, if successful, attract customers on account of improved quality of the goods (making it measurable). 59 Resistance to new technology by workers who fear losing their work should be minimised through full employment. At the same time there must be something at stake for competition to be effective, which, again, is the variable income portion.

62 An Institutional Design for Republican Socialism The Socialist Community of Citizens the viability of such projects).60 A fund for resources would be established at the national level. Projects will evidently be discontinued in the face of insufficient demand. Inevitably, this will involve considerable waste of public resources. The difference compared to capitalism is that in socialism, the costs of failed ventures are shouldered by the public rather than by private individuals, which will cause innovators to take more risks since failure comes at no personal cost. Overall, therefore, it is important that the net contribution of new initiatives will be positive (taking into account the positive externalities of spontaneous initiative, not merely the rate of return on individual projects) so that society becomes on the whole wealthier. The fund for innovative projects will have to be adjusted according to this metric (if it is too large it will drain too much from more productive or useful alternative uses; if it is too small the benefits of spontaneous innovation are lost). Similarly, we could imagine an official crowdfunding platform in which innovators can pitch their ideas, and potential consumers can pledge labour credits. If the project is realised, the labour credits are cancelled and the project can withdraw from society the equivalent value in resources; if the project fails to take off, the credits are unfrozen and thus made available to the pledger for other uses.61

With the problem of innovation tackled, the last hurdle for a feasible socialism is out of the way. A model that uses multilevel iterative planning has the most promise of fulfilling republican and socialist commitments. The two premises, as Castoriadis put it, are defined by allowing associations to do their own draft detailed planning, with their plans only being modified and reshaped by invoking wider interests at intermediate and central levels. The path between the initial conditions and ultimate target is found through cybernetic or deliberative optimising between different levels using labour time computing, optimising programmes, and shadow pricing—technical as it may sound, this relies in large part on qualitative manoeuvring by self-governing associations, connecting with quantitative tools. The activities of self-governing associations, through horizontal and vertical iteration, are balanced with the activities of other self-governing associations within the parameters of the general interests as interpreted and expressed by the active citizenry and enforced politically at the central level of the polity. A feasible socialism must therefore operate within a framework that can be enforced by a public body. This means that checks and balances are to be in place to ensure that no public body—economic or political—or official can usurp decision-making power for its own benefit, as we discussed at some length in chapters II and III. The information problems and incentive problems that we defined as central to the economic calculation problem are resolved in this model. Rather than being inherently structurally incoherent, as Austrian critics maintain, a socialism which incorporates republicanism is able to produce a model of socialism that is both feasible and compatible—in fact, fits quite naturally —with republicanism, on account of the public-spiritedness, cooperation, self-governance, and mixed

60 Financial institutions also, for example, subject business loan applications to criteria of viability in capitalism. This is hardly infeasible then. 61 Innovation of this type would be driven by intrinsic factors, such as the possibility to earn one’s subsistence through working on something one is passionate about.

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‘government’ (checks and balances between various public organs tasked with economic functions) it encourages.

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Chapter V: Towards a Republican Socialism

5.1 Conclusions The aim of this thesis, as formulated in chapter I, was to articulate a political vision that is faithful to socialism and republicanism alike. The method was to design an institutional framework which was ambitious (promises a substantive break with the existing state of affairs), attractive (guarantee a reasonable quality of life), coherent (logically congruent), and feasible (have workable social and political institutions that can sustain a reasonable material standard of living). In order to achieve this, it was necessary to show that a socialist society could embody and sustain republican values—civic virtue, active participation, sensitivity to the common good, self-government, a mixed constitution, as well as curtail privately-driven commercial imperatives—in its social institutions. This was, I said, the theoretical equipment that could be used to restore self-confidence and offensive initiative in and by the socialist movement. This thesis has engaged with crucial discussions about incentives, information problems, the division of labour, centralisation and decentralisation, conflicting interests, self- government, and the rule of law, which Nove (cited in chapter I) saw as preconditions for a feasible socialism.

A republican socialism, as described in this thesis, provides a logically coherent alternative to capitalism, and is feasible as well as distinct from and preferable to existing socialist alternatives. Self- government in the political sphere—through direct legislation, face-to-face deliberation, a bicameral legislature, and constitutionalism—can be complemented well with self-government in the economic sphere—through self-governing associations, intermediate bodies, and a CPB that guards the common good. In this way, power is dispersed between different public bodies to ensure that power cannot concentrate in the hands of a small segment of the population.

A number of post-capitalist economic models are available for adoption by a republican socialism, with higher and lower degrees of compatibility.62 Multilevel iterative planning (or MDIC as Laibman prefers) was found to be particularly sensitive to republican values. The respective discretionary authorities of various public organs are balanced, thereby acting as check on the domination of one over another. The commercial imperatives, driven by private interests, are replaced by a reward function which weds the activities of production associations to publicly defined goals. Information and incentive problems can be addressed through multilevel planning, making the model economically feasible. Freedom is secured through self-government, principally via associated labour and direct

62 There should be much more engagement with post-capitalist models, although this case has been much better stated elsewhere than can be argued here (Gindin, 2019). For example, the claims by Magdoff and Williams (2017) about ecological sustainability in socialism could be tested if they explicitly married it to a given model. Instead, vague generalities about “democratic planning” allows them to claim various desirable outcomes with no viable way of subjecting such claims to meaningful scrutiny. Theorists should therefore ‘adopt’ any of the available models, modify them, or develop novel ones.

65 An Institutional Design for Republican Socialism The Socialist Community of Citizens legislation within a constitutional-republican order, complemented with a provision of basic material wealth independent of the whims of others. In this way arbitrary power is curtailed and self-mastery encouraged. This normative model of socialist republicanism thus fulfils the goals of ambitiousness, attractiveness, feasibility, and coherence.

5.2 Limitations The outline of institutions of self-government provided here is broadly applicable, from agricultural to urban and (post-)industrial settings, and there is no bias in this respect (I have drawn from examples of agricultural as well as urban and industrial forms of self-government). However, a mature socialism also depends on the existence of an educated citizenry that has the capacity for self-government. In Tanzania and Bangladesh, for example, a major cause of the failed experiments with socialist and quasi-socialist policies was the lack of sufficiently trained public servants, which resulted in poor planning and execution (Kjekshus, 1977, p. 274-275; Uddin & Hopper, 2001, p. 645). 63 The republican socialism that has been described in this thesis has presupposed the existence of a certain level of material development. Evidently then, it could be more easily implemented in countries whose material base is more developed. To realise the universalism of republican socialism it should be able to offer a development strategy that encourages self-government and self-emancipation.

This thesis has contrasted republican socialism particularly to Marxism and to a lesser extent to anarchism, since they represent the two main extant socialist currents that offer a (more and less) coherent body of thought that can be engaged with, in lieu of the ambiguities of democratic socialism, which necessarily falls back unto defensive and reactive pragmatic or populist ‘social-democracy’. Evidently, a republican socialism will have to engage with schools of thought outside the family of socialism as well, including, in particular, rival interpretations of republicanism as well as liberalism, which is the mainstream political ideology in much of the world and academia. Socialism and republicanism in this thesis were taken as postulations, or starting premises. A republican socialism should be able to withstand criticisms of both republicanism and socialism (and for that matter, socialist critiques of republicanism and republican critiques of socialism). Now that we can, with reasonable confidence, conclude that a republican socialism offers a realistic, attractive, and substantive break with capitalism, we can embed it in broader normative discussions about the desirability and political viability of taking society in this particular direction.

The project of socialist republicanism has considerable promise but remains in its infant phase. Substantial amounts of additional research will need to be undertaken, which the scope of this thesis did not lend itself to, regrettably. As a preliminary exploration it was necessary to focus on the

63 Since these were top-down socialist policies, the availability of experience and knowledge of public servants is particularly relevant. Evidently, the overly centralised approach and, consequently, the absence of local knowledge, were major contributing factors to the failure of such socialist policies as well.

66 An Institutional Design for Republican Socialism The Socialist Community of Citizens foremost concerns and formulate a broad framework to test the viability of republican socialism. I have elected to focus on those features that were most fundamental and immediately concerned with feasibility and republican values. There are a great number of important details which have not received the full attention they are due. Whether decision-making should employ a simple majority, two-thirds majority, or lottery drafts, for example, is an important discussion, but not the foremost concern for a basic outline of republican socialism. Information, bookkeeping, and agenda-setting have been important pillars of socialist discussions of post-capitalist society (Marx, [1885], p. 138-139; GIC, 1930; Pannekoek, 1936; Devine, 2011, p. 180), since the compilation, simplification, and dissemination of information is not a neutral but a political task (Castoriadis, [1957], p. 101). Similarly, I have proposed a job guarantee scheme and referenced full employment without addressing the mechanisms of the labour ‘market’ that would be able to realise such aims. These and other questions are important, but have not been addressed to the extent that is probably warranted. Subsequent research should address and fill in blanks and details of the basic institutional framework as presented in this thesis. Additionally, other aspects can be accentuated or highlighted from the perspective of a republican socialism, such as ecological or emancipatory concerns.

5.3. Research proposals In addition to the details mentioned in the previous section (e.g. ecological feasibility constraints, the mechanisms of the labour ‘market’, or the issue of agenda-setting and information distribution), some relevant and critical research proposals will be introduced here.

The cultural dimension of the polity as a “socialist community of citizens” is certainly one of the most important concepts that has been scarcely addressed in this thesis. A republic cannot sustain itself by formal (in a sense, lifeless) equality alone. Solidarity and public-spiritedness are intricately connected and depend on cultural conceptions of how individual citizens relate to the community at large. This exploration ought to particularly draw from the republican conception of universal citizenship. Additionally, it should engage with and critically appropriate the Austro-Marxist conception of ‘national personal autonomy’ to redefine the polity as a non-territorial realisation of universal political principles. It would also engage with Viroli’s republican distinction between and (1997) as well as with the Marxist-Leninist conception of “socialist patriotism” and communitarian notions of citizenship. A viable socialism will have to escape tendencies toward narrow ‘economism’ and put forward an ‘identity politics’ distinct from that offered by post-, which rejects universalism (Chibber, 2013). Republicanism therefore carries the promise of a distinctive radical, progressive, emancipatory, universalist identity politics that can challenge and engage with existing variants (liberal multiculturalism, post-colonialism, and nativism) and with the rejection of identity politics altogether (class reductionism, economism).

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There are also a number of aspects that have only been touched upon in this thesis, that should be expanded significantly. As previously mentioned in footnote 5 (page 9), the distinction between the common good as value in itself and instrument for the securing of common liberty is highly relevant to republican socialism. The idea of public welfare as the republican conception of common good within the economic sphere hinges on it. The question is whether ‘republicanism in the economy’ entails securing economic principles which merely guarantee a republican system of government, or whether ‘republicanism in the economy’ should be an aspiration for its own sake. This argument will thus need clarification and deepening. Likewise, the notion of socialist constitutionalism has been introduced; to develop it further we will need to draw on radical republican legal theory, develop novel arguments, and embed it into normative theory concerning both constitutionalism and the social contract.64

The eventual aim is of course to develop socialist republicanism to the point where it can be used in practice, to inform socialist strategy and, ultimately, public policy. Therefore, in addition, evidence- based public policy proposals will need to be formulated that can bridge the gap between the present state of affairs and the future socialist community of citizens. Participatory budgeting and Kerala’s people’s planning could be tapped into for sources of inspiration for transitional policies, for example. Crucially, we will have to devise a way to overcome the tension of advocating socialist constitutionalism within the context of liberal democracy. In other words, how can the liberal constitutional order, as an aristocratic check on democracy, be overturned without sacrificing the commitment to constitutionalism in the process? Moreover, in terms of political viability, republican socialism will have to identify potential agents of social transformation and windows of political opportunity. In the nineteenth century demands for self-government in production emerged more or less spontaneously from inside the , with theorists taking up these demands to provide theoretical underpinnings. A republican socialism in the twenty-first century will have to grapple seriously with the fact that these demands do not seem to appear spontaneously in post-industrial service sectors nor in informal sectors, which are significant sources of employment in developed and underdeveloped countries, respectively (Fox & Gaal, 2008, p. 49, 52-53; ILO, 2016, p. 65, 83-84).

Taken together, socialist republicanism offers a new avenue of socialist theory and inquiry, spanning from research into historical antecedents of socialist republicanism, to normative theory and strategy. It thus contains the potential means to realise a revival of socialism.

64 It will among other tasks need to address the ‘paradox’ of reconciling, on the one hand, placing certain fundamental rights beyond the immediate scope of democracy, and on the other hand, expecting citizens themselves to formulate the laws that will make up the constitutional order.

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