THE SOCIALIST CALCULATION DEBATE AND NEW SOCIALIST MODELS IN LIGHT OF A CONTEXTUAL HISTORICAL MATERIALIST INTERPRETATION by Adam Balsam BSc [email protected] Supervised by Justin Podur BSc MScF PhD A Major Paper submitted to the Faculty of Environmental and Urban Change in partial fulfillment of the requirements for the degree of Master in Environmental Studies York University, Toronto, Ontario, Canada December 11, 2020 Table of Contents The Statement of Requirements for the Major Paper ................................................................................. iii Abstract ........................................................................................................................................................ iv Foreword ...................................................................................................................................................... vi Section I: Introduction, Context, Framework and Methodology .................................................................. 1 Preamble ............................................................................................................................................... 1 Introduction .......................................................................................................................................... 4 Context of this Investigation ................................................................................................................. 5 The Possibilities of Socialist Models ................................................................................................... 11 The Problem with Models ................................................................................................................... 18 System of Classification....................................................................................................................... 21 Methodology of Evaluation................................................................................................................. 23 Section II: Primary Proposals in the late 19th to early 20th Century: The Historical Socialist Calculation Debate ......................................................................................................................................................... 25 Utopian Socialism, Proudhon and Marx ............................................................................................. 25 Introduction to the Socialist Calculation Debate: Barone’s and Neurath’s models ........................... 28 Section III: The Socialist Calculation Debate: .............................................................................................. 34 Part 1: The Austrian Critique ................................................................................................................... 34 Introduction to the Austrian Critique ................................................................................................. 34 The Arguments of Ludwig von Mises .................................................................................................. 36 The Arguments of Fredrick von Hayek ................................................................................................ 50 Part 2: Socialist Defense and Counterproposals ..................................................................................... 76 A Neoclassical Socialist Rebuttal: The Arguments of Oskar Lange and Fred Taylor ........................... 76 A Marxist Rebuttal: The Arguments of Maurice Dobb ....................................................................... 90 The Arguments of Paul Sweezy ......................................................................................................... 100 Section Conclusion ................................................................................................................................ 101 Section IV: Late 20th Century critiques..................................................................................................... 103 Introduction ...................................................................................................................................... 103 A Critique of Historical Record of Socialist Economies: The Arguments of Michael Ellman ............ 104 The Proposal for a Minimalist Socialism: The Arguments of Alec Nove ........................................... 119 The Arguments of Diane Elson .......................................................................................................... 135 The Arguments of Robin Blackburn .................................................................................................. 142 The Arguments of János Kornai ........................................................................................................ 152 i Section Conclusion ............................................................................................................................ 156 Section V: New Socialist Models ............................................................................................................... 161 Introduction ...................................................................................................................................... 161 Worker Self-Management: Ernest Mandel’s Model ......................................................................... 164 Participatory Planning: Pat Devine’s Model ..................................................................................... 176 Parecon: Michael Albert’s and Robin Hahnel’s Model ..................................................................... 235 Market Socialism: Limited Horizons or a Debate over Dialectical Progression ................................ 242 A Simplified Computational Model: Cockshott & Cottrell ................................................................ 263 Section VI: Synthesis ................................................................................................................................. 289 Bibliography .............................................................................................................................................. 303 ii The Statement of Requirements for the Major Paper This paper titled “The Socialist Calculation Debate and New Socialist Models in Light of a Contextual Historical Materialist Interpretation” culminates the direction of my Masters in Environmental Studies degree towards the examination of the dynamics of Socialist economic calculation in context of the inclusion of factors normally deemed externalities in the capitalist market framework. This paper explores the arguments and models of Socialist economic management, focusing centrally on non-market-centric economic direction and the issues of economic efficiency. In this paper, I assert that socialist models need to be understood as being applicable to particular historical developmental contexts which assume a particular level of capital accumulation, centralization of data and class composition and relative power, acquired on the basis of social leverage rather than fiat. I explore the early 20th century propositions, their most salient critiques, the critiques of the experience of the 20th century command economies as well as New Socialist models proposed later in the century. This paper is to be valued at 24 course credits devoted to Major Paper Independent Work (ENVS 7899) carried out between Fall 2019 and Fall 2020. iii Abstract This paper examines the historical Socialist Calculation Debate, some critiques of the command economies in the late 20th century as well as some New Socialist economic models. These models were assessed with regards to their feasibility for practice as well as their relation to a theorized historical trajectory in style of immanent critique. This trajectory can be broadly sketched in terms of the implicit dynamics of capital accumulation, the size of the state sector and relative class power. This paper finds that although critics of both socialist models and socialist historical economies present some significant obstacles to the prospects of central calculation and planning, their feasibility is likely to increase with greater data processing capacity and through the increasing feasibility of greater firm growth. It is contended that critics and some advocates misrepresent the obstacles confronting socialist states by assuming that various limited unidimensional criteria are the basis for decision making and economic organization in these states. For instance, one of the major assumptions they make is that short- term institutional economic efficiency is the key target of decision making. These assumptions overlook key contingencies and neglect the dynamics of real decision-making, instead assuming habit or mere formalism can just be imposed without sufficient leverage. Despite their flaws, some of these critiques might reveal an unfolding rationalization mechanism that begins with less computational capacity, relying on more crude political direction to those that would rely on a more detailed form, which could progressively shrink the domain of the market. I argue that although many models might be presented as competitors, they might be better understood as highlighting different aspects that might be emphasized at different stages in a developmental progression towards greater economic centralization and greater class power in a progressively more socialist regime. Like Marx’s immanent